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Lower Moreland warns of multi-year fund balance decline; administrators propose 3.5% millage increase and spending controls
Summary
District finance staff told the board the fund balance fell from a COVID-era peak and recent operating deficits have created a projected near-term shortfall; administrators proposed a 3.5% Act 1 millage increase and outlined mitigation steps including tapping transfer/interim taxes and tightening discretionary spending.
District finance staff presented a detailed budget update showing the Lower Moreland Township School District has drawn down multi-year fund balances and currently faces an operating gap the administration is working to close.
Introduced by the administration, Mrs. Ovington said the district's fund balance peaked at about $7.13 million in 2021-22 but has declined after recent annual deficits. "Basically, our fund balance is absorbing this operational deficit," she told the board during the presentation. She reported budget shortfalls of roughly $1.9 million in 2023-24 and $3.4 million in 2024-25 and said that, as of February, transfer and interim tax receipts were lower than projected from a 55-plus development the budget had assumed.
Ovington gave a current-year projection showing a $1.35 million deficit as of February and said that, after mitigation measures and adjustments, the district's anticipated deficit could be about $955,000, which would lower the fund balance to roughly $821,000. She said the administration is planning a proposed 3.5% millage increase (the Act 1 index cap) for the 2026-27 budget; with that increase, estimated additional revenue would be approximately $1.88 million based on February assessments. "So right now, that 3.5% increase will generate approximately $1,880,000 in additional revenue based on assessments as of February," Ovington said.
Board members and administrators discussed the main drivers behind the shortfall: the carrying cost of keeping a fourth building (about $2.0 million annually in personnel and operations), higher utilities and snow-related expenses this winter, rising special-education costs and a shortfall in anticipated transfer/interim real-estate taxes tied to the 55-plus development. Ovington said only 34 of the development's 176 properties have sold so far and that 27 are in process, slowing the expected near-term revenue from transfer and interim taxes.
Administrators outlined mitigation steps under consideration: pursuing eligible Act 1 exceptions (primarily special-education-related, if available), increasing revenue from school-based access and special-education billing where appropriate, tightening discretionary purchasing and subscriptions, pursuing available grants and participating in county programs (E-rate) that may produce savings, and evaluating transportation and vendor contracts. The administration said it aims to present a balanced budget for board approval after adjustments and continuing monitoring; a proposed budget must be put on display in May and the final vote would be by June 18.
During Q&A, board members asked whether the district could further reduce the projected $955,000 shortfall; administrators said they were still awaiting insurance renewals, contract negotiations and final subsidy information and were targeting a $0 deficit but could not promise specifics until those numbers were finalized. Several members emphasized a desire to avoid depleting the fund balance entirely while restoring a healthier reserve level over time.
Several routine motions followed later in the meeting (personnel approvals, contracts, capital projects and devices) and were carried unanimously; the board did not adopt any new tax or policy action during this meeting beyond the budget presentation and discussion.
