Kingsport board adopts $105 million FY2025–26 budget after financial update and amendments

Kingsport City Schools on May 13 approved its fiscal year 2025–26 operating budget of $105,002,300 and adopted Budget Amendment No. 5 following a quarter‑end financial briefing and debate about school nutrition shortfalls, federal and state grants, and one‑time fund‑balance uses.

The approval followed a presentation by David Fry, a school system staff member who led the financial update and budget discussion. Fry told the board that revenues and expenditures were “pretty much breakeven” overall but that several one‑time and recurring pressures required board action, including using fund balance for targeted needs. "I do think that we'll end up, you know, somewhere in the neighborhood of 10 plus million dollars in our fund balance at the end of the year, which is a good thing," Fry said during the update.

The board’s decision matters because it sets pay increases, program funding, and operating plans for the coming school year. The FY26 budget includes state and local revenue projections, a teacher pay increase tied to a state allocation, a locally funded classified‑staff bonus, and a $300,000 appropriation from fund balance to support special‑education operations.

Most important facts: the budget includes a required teacher salary improvement funded by the state, local appropriations requested from the City of Kingsport, and an appropriation of fund balance for one‑time classified bonuses and for special education. Fry told the board that the teacher bonus money is in the state budget but "we will not get the money until after July 1," and the district planned to pay bonuses after funds are received. The board also approved Budget Amendment No. 5, which adjusts multiple grant accounts, increases school nutrition spending, records new donations, and moves donated playground funds into appropriate project accounts.

Supporting details and fiscal drivers: Fry said TISA (state funding) estimates were slightly higher than earlier forecasts because of an April state estimate, adding roughly $240,000 in state funds. The budget assumes $15,000,000 in local property tax revenue and projects modest sales‑tax growth (2 percent). The package funds certified‑staff increases (a 1 percent cost‑of‑living increase plus required step/teacher improvements) and classified staff steps and a proposed one‑time classified bonus estimated not to exceed $631,000, funded from fund balance.

School nutrition and CEP: Fry gave extended detail on the school nutrition fund after systemwide adoption of the Community Eligibility Provision (CEP). He said CEP increased federal reimbursement revenue but reduced meal sales revenue and that food‑cost inflation has driven a projected operating deficit in the nutrition fund. The board approved a nutrition fund budget increase of $488,217 and a food‑cost line‑item increase of about $473,600; the revised nutrition budget includes a $59,500 fund‑balance appropriation for staff bonuses and roughly $670,000 of fund‑balance use overall in that fund for FY26.

Other adjustments included increases tied to grants and donations: a Niswonger Foundation adjustment to add $44,645 (including $10,450 in additional supplies and reimbursement of benefits), summer learning program funding of $895,140, an additional John Adams PTO donation for playground equipment, and transfers to reflect new state preschool and state special‑education preschool grants.

Board action and votes: the board moved, seconded, and voted to approve Budget Amendment No. 5 and to adopt the FY2025–26 budget; the motions passed unanimously.

What the board discussed but did not decide: several board members pressed for more detail on the school nutrition finances (a la carte revenue, commodity shortfalls and the timing of federal reimbursement) and asked staff to provide historical comparisons of food‑service spending and to continue exploring revenue and menu strategies. Fry said staff would continue to pursue savings through a cooperative buying group (NETCO) and menu adjustments.

Looking ahead: the board asked staff to monitor the school nutrition fund closely and to return with additional detail on a la carte and second‑meal revenues, and trustees indicated they would revisit any need to change CEP participation if reimbursements or food costs make the program unsustainable.

Ending note: the board’s action balances one‑time fund‑balance uses with recurring pay and program commitments; several trustees thanked Fry for the detailed work that shaped the proposal.