Okemos projects multi‑year shortfall; board sets two budget work sessions
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Summary
District officials presented a budget update showing a projected structural deficit next year if no changes are made. Administrators said one-time state retirement relief received this year does not recur and the district is planning reductions and public work sessions in May to shape the 2025–26 budget.
District finance staff told the board that Okemos Public Schools faces a multi-year budget shortfall unless the board and administration make reductions or new revenue is identified.
Executive Director of Finance Elizabeth Lentz reviewed the district’s revenue and spending history and said the net effect of one-time items and recent actuarial changes to retirement costs left the district facing a notable use of fund balance heading into the 2025–26 budget. “We can think of the $1.9 million the state provided this year as one-time revenue,” Lentz said, adding that subsequent actuarial rate increases reduced the expected long‑term benefit of that relief.
Why it matters: The district’s projection shows a beginning 2025–26 shortfall of roughly $1.4 million after accounting for currently identified savings and one-time changes; if no additional actions are taken and known variables persist, that gap could grow in later years and materially reduce the district’s fund balance.
Lentz said the district’s revised 2024–25 budget included one-time uses (for environmental remediation and software/server timing) and that some foundation and grant items that temporarily helped the budget in prior years are not recurring. She explained that the 2024–25 state-funded pension adjustment produced an overall smaller-than-expected permanent savings because other retirement cost components rose.
The administration proposed two board work sessions: an initial budget work session on May 19 (regular board meeting day) and a follow-up session the next week, with the goal of presenting a prioritized list of reductions for board direction before budget adoption on June 30. Lentz said administrators are looking at staffing, program and other operating changes and noted negotiations with bargaining units are ongoing.
Trustees asked for supporting materials and for clarity about items already reviewed with staff. Superintendent John Hood said the district has been meeting with staff and community members to explain the budget context and to seek feedback. Hood and Lentz emphasized the district’s intent to preserve classroom capacity where possible and to avoid surprise notices to employees by holding private conversations with affected staff before items appear at the board table.
Ending: The board set May work sessions to review an administrator-prepared list of reductions and expect to return to the board for direction in time for the formal budget adoption on June 30.
