Washoe trustees approve tentative FY26 budget with $1.55M in new ongoing costs; deficit remains about $6.6 million

Trustees on Tuesday approved the district's tentative fiscal year 2025-26 budget, voting 7-0 to submit the plan to the state while staff continues work to close a remaining projected gap.

Chief Financial Officer Mark Mathers told the board the district faces an initial $9,669,000 estimated general-fund deficit before the actions included in the tentative budget and that state timing requires a tentative filing on or before April 15. "When we're in a year in which the legislature meets, we're always confronted by kind of an awkward situation," Mathers said during the presentation.

The tentative budget approved Tuesday incorporates roughly $4.12 million in what staff described as "financial engineering" and other savings: stopping ongoing general-fund contributions to the Other Post-Employment Benefits (OPEB) trust, a change in Medicaid billing treatment that increases reimbursements, rebasing department budgets that have consistently underspent, and removing a proposed stormwater utility fee. The district reported it no longer needs to contribute to the OPEB trust because the trust is considered sufficiently funded to cover future subsidy payments.

Nut graf: The budget action buys time but does not close the district's structural shortfall. Trustees approved the tentative budget so the district can meet state deadlines while staff continues to analyze additional savings, potential revenue changes from the legislature and other options to balance the final FY26 budget.

Key items included in the tentative budget

- OPEB contributions: Staff recommended pausing general‑fund contributions to the district's OPEB trust after an actuarial review; Mathers said that change reduces general‑fund outflows by about $1.5 million.

- Medicaid billing: The state will no longer retain a 34-cent charge on Medicaid billing for local education agencies, a change staff said increases district Medicaid reimbursements by roughly $1.2 million.

- Department rebasing: A review of historical department spending produced about $1.2 million in rebasing reductions to offset the deficit, according to staff.

- Stormwater utility fee: Budgeted previously at $280,000, staff removed the fee because the city appears to have discontinued the proposed charge.

New or converted positions and program funding included

- Special education: Staff included requests totaling about $765,000 for curriculum, occupational therapy and speech-language support to meet caseload needs.

- Special-education transportation: The tentative budget funds a net increase of 10 bus drivers (13 new drivers minus 3 repurposed positions) and a re-engagement specialist to support specialized routes, at a cost staff estimated at about $785,000.

- Net ongoing additions: Mathers summarized the two major ongoing items above (special education and transportation) as roughly $1.55 million in new ongoing general‑fund costs the district must fund going forward.

- PBS Reno partnership: Staff moved $125,000 in ongoing support for PBS Reno's "Curiosity Classroom" and other elementary programs from ESSER funding into the general fund; the presentation said that cost would be offset within the superintendent's operating budget (no net increase to the general fund as presented).

- Tuition‑reimbursement pilot: The board approved a two-year, one-time reimbursement program to pay tuition costs for teachers seeking specific endorsements (e.g., special education, STRAT, GT); staff estimated an initial budget of up to $400,000 from fund balance.

- Capital program staffing: Non-general-fund funding for four construction-management/project coordinator positions ($453,000) was included to move more project management in-house and reduce outsourcing costs.

Outcome and next steps

Trustee Dr. Diane Nicollet moved adoption of the tentative budget as presented; Vice President Adam Mayberry seconded. The motion carried 7-0. Mathers told trustees the tentative filing leaves a remaining estimated general‑fund deficit of about $6.6 million and staff will return with further options in May and June as legislative action and additional analysis become clearer.

The superintendent asked staff to continue to communicate the district's fiscal posture to state policymakers; Mathers said the district participates in Department of Education calls and will continue advocacy work.

Ending: Trustees approved the tentative FY26 budget so the district can meet state deadlines; staff will continue to refine options to close the remaining gap and return to the board with updates and possible actions before final adoption later in the budget cycle.