Council Rock SD finance committee warns of multimillion-dollar risk if state aid is delayed

At a Nov. 6 meeting, Council Rock SD finance staff told the district finance committee that first-quarter projections for the 2025–26 school year show a material downside risk if state aid tied to the state budget is delayed.

"The state projection is down because of the budget impasse, and we haven't received — we've only received the reimbursement for the real estate tax rate reduction," said Mr. Rapp, the district's finance presenter, describing preliminary results through Sept. 30. He said local and federal revenues are roughly on track but state receipts are lagging.

The presenter said the district used Frontline software to generate year-end projections from actual monthly spending and recent history. "This is what the software is currently projecting: we would finish the year with a $9,400,000 deficit," he said, adding that the run assumes the district receives no additional state money and that this outcome is unlikely but useful to show downside exposure.

Mr. Rapp also noted a year-over-year shortfall in state receipts through the same period: the district collected about 62.4% of revenues by Sept. 2024 versus 61.8% this year, a gap he quantified as roughly $4.2 million so far. Earlier in the briefing he described that figure more generally as "almost $4,000,000 less" than budget — a small difference that reflects two ways of slicing the same early-year comparisons.

Board members pressed on how to interpret the projection. "So we're one quarter in and you can project how you project it just because most of our revenue hasn't come in yet?" asked Mr. Faldo. Mr. Rapp explained the software uses several years of actuals plus current receipts and can be rerun under different assumptions, and he deliberately left the run conservative to show the impact of missing early-state payments.

The presenter flagged budget items that affect near-term results: salary and benefit costs are a little above budgeted levels and some costs tied to the new teachers contract are not yet recorded in the line items. He said the board had placed money in a budgetary reserve to cover anticipated contract increases.

On capital planning, Mr. Rapp said the district will coordinate borrowing timing with project spending to borrow only what is needed and smooth out debt-service costs rather than issuing the entire authorized amount at once. A committee member suggested the board consider a resolution urging the governor to resolve the state budget impasse and release funding.

A committee member identified as Dawn asked about outreach related to SNAP and free breakfasts as the holidays approach. Staff said free breakfast is offered K–12 and that the food service fund has reserves to continue meals even if some reimbursements are delayed.

No formal votes or binding actions were taken at the meeting. The committee concluded after presentation and discussion and adjourned.