Port Angeles School District leaders presented the proposed 2025–26 budget and a four‑year forecast at a special budget work session at the Lincoln Center, outlining how recent state changes to special‑education funding will affect the district's general fund and levy spending. The presentation drew questions about enrollment assumptions and central‑office costs, and a community commenter urged clearer comparisons to last year’s final budget.

The budget matters because state special‑education formula changes and flat overall revenues are shifting what previously was paid from levy dollars into the district’s basic education apportionment, leaving levy funds to cover other costs and putting pressure on the district’s fund balance and levy spending plan.

Finance Director Karen Casey said the district projects a 2025–26 general fund beginning balance of $2,500,000, revenues of $63,109,794 and expenditures of $62,962,852, producing a projected increase of about $146,942 and an ending fund balance of roughly $2,646,942. "Personnel is one of the biggest costs and ours is approximately 85% of our budget," Casey said, describing certificated salaries, classified salaries and benefits as the primary expenditures. The district's levy is planned at about $7.16 million; state general apportionment is projected at about $48.9 million; federal funds about $5.4 million; and planned transfers of other financial sources (including interest) about $1 million.

The district also reported fund‑level projections: an ASB (Associated Student Body) starting balance near $503,000 and a projected ending ASB balance of about $544,112; a new debt‑service fund balance of about $769,318 related to a recent bond sale; capital projects beginning balance near $73 million with planned capital expenditures of about $63 million; and a transportation vehicle fund with a starting balance of about $260,000 and planned expenditures that include a bus ordered this year but to be received next year.

Superintendent Michelle (name not provided in the record) framed the meeting as a state requirement: "This session, is a requirement by state law. So we are required to present the budget to you, and we are also required to open it for community comments," she said, adding the board will accept public comments for one week and will consider adopting the budget and related resolutions at the next board meeting.

A key change highlighted is the new special‑education funding model from the state. Under the prior model the district's SPED allocation was capped (previously described as 16% of enrollment) and used a tiered allocation tied to time in general education versus self‑contained placements; the new model removes that cap and the tiering, and it also restricts which other funding sources may cover any costs that exceed allocations. Karen Casey said that historically the district covered SPED overages from levy dollars; under the new state model, more state and federal revenue has been earmarked for SPED and that revenue is being taken from the district's basic education apportionment instead, which will leave other basic‑education costs to be covered by levy funds.

Board and staff said the budget was built on an assumed full‑time‑equivalent (FTE) enrollment of 3,223 and that the administration used attrition rather than reductions in force to reduce staffing costs for 2025–26. Casey described specific staffing reductions from the prior year’s budget as the result of attrition: six secondary certificated positions, seven elementary certificated positions, an AmeriCorps director position, seven one‑year‑only paraeducator positions and 6.5 hours of other classified staff. "All of this was through attrition. None of it was a reduction in force," Casey said.

The four‑year forecast presented to the board projects that the district will need modest annual expenditure reductions in coming years to keep the fund balance growing: approximately a 1.3% reduction in total expenditures projected for 2026–27 and about 1% for 2027–28, assuming the temporary 4% staffing mix funding from the state does not continue after 2026–27. The district reported that at the end of 2025–26 it expects an ending fund balance of roughly $2.6 million, below the board policy target of 7% of expenditures (approximately $4.4 million). The superintendent and finance director said they are tracking enrollment, state and federal funding (including Title II, Title IV and an Indian education grant received this year), and federal budget decisions that could affect next year’s revenues.

A community commenter urged the district to provide clearer, year‑to‑date comparisons to last year’s budget and to disclose which departments would see reduced certificated positions. The commenter also questioned the conservatism of holding steady enrollment in the four‑year forecast given a multiyear enrollment decline in the district: "Comparing this year's budget to last year's budget is challenging...keeping enrollment steady through that forecast, given the steady decline in enrollment that the district has seen over a number of years, is not conservative," the commenter said.

Board members and staff emphasized that no final action was taken at the work session. The board will accept written community comments for one week and will vote on the budget and required resolution at its next regular meeting; the record notes the state requires the adopted budget be submitted to the Office of Superintendent of Public Instruction by Aug. 31. Staff said they will continue to monitor enrollment daily, report monthly to the board on finances and enrollment, and adjust planning as needed.

For further details the district posted the budget documents used in the presentation in the hall during the meeting and those documents are the official materials that will be submitted to OSPI.