Olympia board hears budget options as enrollment declines reshape staffing and supports

Olympia School District Board of Directors held a budget work session in May 2025 to review next year’s revenue outlook, enrollment projections and staffing allocations as the district prepares a first reading of the budget next week.

Superintendent Murphy opened the session by saying the single biggest driver of district funding is enrollment and that the work session was intended to gather board feedback before a first reading scheduled for Thursday, June 12. Executive Director Davis and cabinet members walked the board through enrollment trends, the district’s projection methodology and the allocation formulas that determine how staff and school resources are distributed.

Board members and staff said the matters are urgent because falling elementary enrollment and uncertain state and federal funding could require reallocations or cuts that would affect schools’ staffing and services.

Enrollment trends and projections

Executive Director Davis presented the district’s method for deriving average annual full‑time‑equivalent (FTE) counts and said the district uses multiple look‑back windows (one‑ to five‑year averages and grade‑to‑grade “survival” rates) and then selects conservative projections for staffing. The presentation showed the district’s annual average FTE high watermark of 9,666 in 2020 and a decline to about 8,967 in 2024. Davis said the district saw a modest uptick of roughly 40 students last year but that elementary grades remain lower, driven by smaller kindergarten cohorts.

Davis and the superintendent cited specific data points the board asked to be clear in the record: the 2024–25 kindergarten annual average was 521.2 FTE, and births in 2019 (the relevant cohort for K in 2024) numbered 585, implying a district capture rate near 89–90 percent. The board discussed how those birth data from the Department of Health inform kindergarten forecasts.

McLean neighborhood developments were highlighted as a local example of how new housing affects schools. Staff said a completed multifamily project called “The Landing” generated “over 30 students” at McLean; an under‑construction Harrison Avenue subdivision of about 70 single‑family homes is estimated to produce roughly 17.12 elementary‑age students using the district’s demographic multipliers. Executive Director Davis cautioned that fractional student estimates are statistical expectations, not exact counts, and that such projects are folded into multi‑year projections.

Staffing ratios, allocation models and equity supports

The presentation reviewed the district’s allocation engine — the set of ratios and thresholds that convert projected enrollment and student needs into staffing (principals, teachers, library staff, counselors, family liaisons, custodians and classified positions). Officials emphasized these allocations are influenced by state funding formulas, collective‑bargaining terms and local policy choices.

Staff explained key ratios in plain terms: K–3 class staffing is set at about 22.25 students per teacher while grades 4–5 use a larger ratio (about 27); principals and assistant principal thresholds are tiered (for example, the district model yields different principal FTEs depending on a school’s size and other factors). Executive Director Davis said the district’s local allocations have historically exceeded the state’s prototypical model in many places (funded locally in large part by the local levy) and that levies are increasingly needed to keep compensation competitive.

The board reviewed a side‑by‑side example comparing two elementary schools (LP Brown and Centennial) to show how student poverty concentration, Title I and special education density change the distribution of certificated and classified staff. Executive Director Davis noted LB Brown receives more Title I funding and thus shows higher certificated staffing for the same enrollment; Centennial has higher special education needs and associated staffing. The board discussed whether office‑professional and family‑liaison support should consider student‑need factors in addition to headcount.

Family liaisons and student support roles drew sustained, cross‑bench comment. Multiple directors said family liaisons are central to connecting families in high‑need communities to services; one director urged that reductions to family‑liaison hours in high‑need schools would merely shift that workload onto principals, counselors or other staff. Executive Director Davis said the district expanded family liaison staffing coming out of COVID and that the staff plan presented for next year does not propose cutting family liaison hours for 2025–26; future decisions will depend on enrollment and budget results.

Contingency, fund balance and cost‑saving measures

The administration told the board it plans to present a budget next week that meets the district’s board policy minimum of a 3% ending fund balance. Superintendent Murphy listed near‑term steps the administration intends to include in the proposed budget: continued reductions in the district office, elimination or reclassification of certain director positions (including a director in student support and a director in teaching and learning), shifting some technology support to schools and exploring capital‑project‑related options. The superintendent estimated those actions could yield roughly $500,000 in savings.

Executive Director Davis also presented an illustrative calculation the administration uses to show how staffing aligned strictly to the district’s “actual staffing generated” model (rather than current local enrichments) would change staffing counts; staff estimated that aligning to that model across elementary principals, librarians and custodians would reduce district staffing obligations by about $1.7 million. Board members requested clearer documentation showing exactly which line items the $1.7 million represents.

Board members repeatedly raised contingency planning. The administration said it intends to keep a fall contingency (previously $2 FTE‑equivalent funding) to respond to unexpected enrollment swings; staff noted past experience when a fall contingency was used to add positions after unexpected enrollment increases at Capital and Olympia high schools. Directors expressed a preference for a larger ending fund balance to cover shocks (one director asked administration to model an ending balance equal to one month of payroll).

Levy, revenue outlook and legislative risk

Board members pressed administration for transparency on levy usage and long‑term trends. Staff said the local levy has been used both to increase compensation (to remain competitive) and to augment staffing and programs above the state allocation; because compensation is rising, a growing share of levy revenue has gone to salary. Directors noted that absent sustained changes in state funding, the levy increasingly funds basic compensation rather than discretionary enhancements.

Superintendent Murphy and cabinet members emphasized uncertainty in the coming state and federal revenue outlooks and the importance of legislative outcomes. They reminded the board that the district’s budget depends in part on whether the state fully funds K–12 and on federal policy decisions that can affect reimbursements.

Board requests, next steps and administration direction

Directors asked for several follow‑ups and clarifications to appear with next week’s first reading or in near‑term staff materials:

- A public, clear explanation of the staffing allocation engine and the local choices that diverge from the state prototypical model, including how equity considerations (poverty concentration, multilingual learners, special education density) alter allocations. Executive Director Davis said the allocation spreadsheets will be posted online and staff will link supporting documents. - A breakdown of how levy revenue is currently spent and a projection showing how levy spending would change under several scenarios (e.g., if more levy revenue is required for compensation). Directors asked staff to show the trend line and to model implications over multiple years. - More granular contingency and scenario modeling, including the cost and service impacts of options such as shared (hub‑and‑spoke) staffing models, principals overseeing multiple small schools, or modest school consolidations. Board members asked for explicit risk/benefit language about how those options could affect equity and service delivery. - Additional outreach or data‑gathering on families who disenrolled during COVID (noting legal limits on contact with families that filed intent to homeschool), to better estimate the “lurking” population that might return at secondary grades.

No formal votes or motions were taken at the work session. Staff will bring a first reading of the proposed budget to the board next week, followed by additional readings and final adoption timelines; staff also noted the formal budget submission deadline referenced in the presentation (ASU submission by July 10 and a later date given as August 31 in the session materials).

Ending

Board members emphasized preserving student supports that serve students furthest from educational opportunity — for example, family liaisons, social workers and programs that keep at‑risk students engaged — while also asking the administration to present clear, data‑backed tradeoffs if deeper savings are required. The board scheduled follow‑up work and asked staff to return with the written allocation model, levy breakdown and contingency scenarios alongside the first reading next week.