Tumwater School District faces $4.5M operating deficit as financial challenges mount

The Tumwater School District Board Meeting on December 15, 2024, focused on the financial results for the fiscal year 2024, presented by Cara Acker, the director of financial services. The meeting highlighted significant financial challenges facing the district, including a reported operating deficit of $4.5 million, which represents a 40% decrease in the general fund balance from the previous year.

Acker detailed the district's total expenditures of $134 million, with $114 million allocated to the general fund. The district's revenue sources were primarily state-funded, accounting for 75% of total income. The presentation emphasized the importance of understanding enrollment figures, noting that while overall student numbers appear stable, the actual full-time equivalent (FTE) students in traditional schools have declined.

The board discussed the implications of the operating deficit, which has raised concerns about the district's financial health. Acker indicated that the district might face cash flow issues in the coming months, potentially going cash negative as early as March 2025. To address this, the board is considering an interfund loan resolution, which would allow the district to borrow funds to meet its financial obligations during low cash months. The proposed loan amount is $4 million, with a repayment deadline set for August 31, 2025.

The meeting also touched on the broader context of funding inequities within the state, particularly regarding local levies. Board members expressed the need for legislative support to address these disparities, which significantly impact the district's budget. The discussion underscored the urgency for strategic financial planning and potential cost reductions to mitigate the ongoing deficit.

In conclusion, the Tumwater School District is navigating a critical financial situation, with the board poised to take action on the interfund loan in January 2025. The upcoming work session will further explore strategies to address the budget deficit and ensure the district's financial stability moving forward.