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Kennewick previews preliminary 2025–26 budget; bond refinancing cuts future debt payments and frees capacity
Summary
District finance staff presented a preliminary 2025–26 budget focusing on the transportation vehicle fund and debt service. A recent refinancing of the 2015 bond reduces long-term debt service and yields roughly $4.36 million in net savings.
District finance staff delivered a preliminary presentation on the 2025–26 budget with detailed briefings on the transportation vehicle fund and the debt service schedule.
The board heard that the district completed a bond refunding for the 2015 issuance; staff reported a net savings of about $4.36 million over the life of the issue and said the refinancing lowered the interest rate from about 4.99% to roughly 3.26%. Staff said the district retained a strong credit rating, which helped achieve the savings.
On debt service, staff presented the amortization schedule and said that total annual debt payments are projected near $19.1 million for the 2024–25 year and drop to roughly $14 million in 2026 under the new schedule. Staff emphasized maintaining healthy fund balances so debt payments can be met in the months before property-tax receipts are received.
Transportation funding and school-bus replacement were a second focus. Staff reported the district fleet includes about 38 buses, including special-needs vehicles. Buses are depreciated on a 13-year schedule; the district receives state replacement funds tied to depreciation age. Delivery delays in the industry mean buses ordered in 2023 arrived in 2024 and buses ordered last year are expected in August 2025. Cost increases and evolving emissions/clean-vehicle rules led staff to recommend pausing major new orders for a month to evaluate the right fleet mix, technology options and costs.
Staff said the district tentatively budgeted $1.8 million in the transportation fund for bus replacement in the preliminary 2025–26 budget but noted that figure could change before final adoption in June. Board members asked for an age-distribution chart of the fleet and a clearer replacement schedule when staff return with a more detailed proposal.
Finance staff also presented data on assessed value, debt capacity and historical tax rates. The district reported legal bonding capacity remains in excess of current outstanding debt and noted that assessed value growth has reduced the district’s tax rate even as bond capacity remains available for future capital needs.
