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PFM tells Haverford Township SD board baseline projections show a $5M-plus fund-balance drawdown without changes
Summary
PFM's operating-projection baseline shows a -$3.6M operating result for 2026-27 and a roughly $5M drawdown after capital transfers; consultants flagged $3.3M in foregone revenue from not taking prior Act 1 index increases and urged multi-year strategy, additional revenue or cost levers.
PFM (Public Financial Management) presented a multiyear fiscal analysis to the Haverford Township School District board, warning that the district's baseline projections would draw down reserves over the next five years unless revenue growth outpaces expenditures or structural changes are made.
"If nothing else changes... in 2026-27 we show the operating result as a negative amount of $3,600,000 with a $1,400,000 transfer for capital projects that draws down the fund balance by roughly $5,000,000," a PFM presenter told trustees during the finance committee segment.
PFM outlined key drivers: enrollment trends (recent declines concentrated in elementary and middle grades), revenue constraints (the Act 1 index limits real-estate tax increases without a referendum), and expenditure pressures (salaries, benefits, debt service and contracted services). The firm illustrated an example estimating roughly $3.3 million in "foregone" revenue had the district used full Act 1 index increases in certain prior years.
Trustees and administrators asked detailed follow-up questions. Several trustees asked that PFM provide comparisons to peer districts, break down trajectories for teacher/staff cost growth versus revenue, and identify near-term operational levers. PFM said it will return in October with peer comparisons and options for the board to consider.
Board members emphasized enrollment-related pressures and program decisions as linked to the financial outlook. Trustees asked whether particular program or staffing changes could extend the time available to address the gap, and sought clarity about what is legally required vs. what is discretionary in budget choices.
What the board decided: The presentation was informational. Administration and PFM will return with more options and peer comparisons in October; the 2026-27 budget was noted for future action at the next meeting. Trustees also discussed exploring Medicaid reimbursement, transportation optimization and audits of high-cost areas as possible mitigation strategies.
Representative figures and next steps (as presented): - Estimated foregone revenue from not taking prior Act 1 index increases: $3,300,000 (PFM estimate). - Projected 2026-27 operating result (baseline): -$3,600,000 with a $1,400,000 capital transfer (PFM chart). - Administration and PFM to return with peer comparisons and recommended levers in October; 2026-27 budget to proceed through the board's adoption timetable.
