The Franklin Regional budget for 2020-21 confirms the coming school district’s financial implosion, to be precipitated by the Sloan campus debt.
Current operations and growing debt payments are producing massive deficits that will consume all general funds within four years, even with annual Pennsylvania maximum tax increases. This follows the Penn Hills financial model.
The 2020-21 budget summary and finance committee meeting agendas and minutes of January and February 2020 show an operating deficit of $2.99 million plus capital and technology project budget deficits totaling $622,000.
This $3.6 million deficit is likely to be exceeded in 2021-22, consuming more than half of Franklin Regional’s total reserve funds by June 30, 2022.
By this time, postponed capital projects and curriculum improvements, along with full Sloan campus debt repayment, will continue massive deficits, exceed revenue and all general funds by June 30, 2024.
This cash flow crisis could be mitigated by slowing the Sloan construction schedule.
This option would help funding by delaying the additional $20 million Sloan campus bond financing commitment until local tax increases can fund the whole Sloan campus debt and actual school district operating expenses.
The board may need to consider other cash flow management options.
These regrettable conclusions were anticipated when recently elected school board members asked for 10-year cash flow projections to assure the Sloan campus plan was financially sound.
The May 2017 decision to build the Sloan campus was not subject to adequate financial vetting at any time, despite continuous citizen and now school board member requests.
Walter Cebulak
Murrysville