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Finance committee reviews preliminary budget gap, Prudent RX savings and $2M escrow for Ethan project
Summary
Staff reported a roughly $743,000 preliminary general‑fund deficit to be reduced before final adoption, described a new Prudent RX prescription rebates program expected to save $200k–$250k, and presented a development agreement with the township securing a $2 million letter of credit (reduced from $9.5M) for the Ethan Elementary project.
District finance staff presented the preliminary fiscal‑year 2026–27 general fund budget and related capital planning items to the Finance Committee.
Budget overview and fund balance: Staff reported a current estimated general‑fund deficit of about $743,000 and an ending fund balance just over $33 million (with portions committed to capital projects and an 8% unassigned contingency). Staff said they believe the deficit can be reduced through upcoming reviews and will present a proposed final budget to the board on April 7, with final adoption scheduled for May 26.
Revenue and expenditures: The presentation emphasized the district’s revenue mix (roughly 84% local revenue and under 16% state sources before statutory reimbursements). Staff noted modest state proposals that could net about $47,000 and described federal pass‑through treatment that makes federal revenue a small percentage of the overall budget. Expenditure drivers remain wages and benefits; overall expenditures rose about 4.6% year over year with a stated benefits increase of about 6.7% for medical.
Prescription program and savings: Staff briefed the committee on a recently implemented Prudent RX program (transitioning from CVS Caremark) intended to capture specialty‑drug rebates; full utilization was projected to yield approximately $200,000–$250,000 in annual savings without increasing employee co‑pays.
Capital projects and borrowing: Staff reviewed the debt schedule tied to the Ethan Elementary School project and recommended presenting a parameters resolution in April to provide flexibility for timing bond issuance. For development approvals, staff reported that the township reduced an initial $9.5 million estimate for restoration security to a $2 million requirement. The district arranged a $2 million cash‑collateralized letter of credit through Midpen Bank (estimated establishment fee ~$10,000, annual fee ~$5,000) and expected final legal review by the following week.
Quote: “We have about a $750,000 deficit right now. I feel comfortable that we’ll be able to through reviews... be able to bring that number down,” staff said.
What comes next: The committee will review refinements to staffing and other line items in coming weeks, expect a proposed final budget on April 7, and consider the development agreement and bond parameters in advance of construction spending.
