Lee's Summit R‑VII district leaders said a cluster of delayed and reduced state and federal payments has created a shortfall that will lower reserves and force program recoding and hiring constraints.

Nathan Holder, the district finance staff member who presented the budget figures, told the Board the district is carrying a roughly $4.9 million recoupment from a 2023 property‑tax reassessment and said DESE (the Missouri Department of Elementary and Secondary Education) has delayed reimbursements for federal programs. “We will get that at some point… it might be this September. It might be next September,” Holder said of the recoupment funds, describing a total of several recent shortfalls that affect the fiscal year closing on June 30.

The administration said five revenue disruptions arrived in the district’s final eight days of the fiscal year: a $185,000 reduction tied to state K‑12 formula funding; about $680,000 in delayed Title I reimbursements; roughly $1,000,000 in delayed IDEA Part B (special education) reimbursements; a prorated early childhood special education (ECSE) June payment shortfall of about $1.1 million; and the previously noted $4.9 million recoupment from the county. Holder also reported a positive surprise: a PILOT (payment in lieu of taxes) payment of about $1.8 million that was received late in the month.

Holder said the district was told its Title I allocation for next year will fall from about $1.5 million this year to about $663,000 next year, a reduction of roughly $840,000 (a 56% decrease). “We already have hired and have our plans, and we have people in place, so we are going to negative spend in this area and have to recode things local,” he said, explaining that positions previously budgeted to federal Title I funds will have to be charged to local funds if the cut holds.

Dr. Buck (identified in the meeting as “Doctor Buck”) summarized the fiscal impacts: reserves that recently reached roughly 28% are dropping toward the mid‑20s and “we’re in good shape” but must adjust for the shortfalls. The presentation noted the district’s board‑set CSIP goal of 25% reserves and said the district can absorb the hits in the near term but will monitor trends and may need more substantive adjustments if federal and state funding do not stabilize.

Board member Dawson asked how the district will reflect delayed money in next year’s budget documents and whether the PILOT payment was recorded to the operating fund; staff said delayed revenues will be shown in next year’s budget amendments when funds arrive and confirmed the PILOT payment was placed in Fund 1 (the operating fund).

Administrators described specific program and staffing consequences. Because Title I funds are tied to budget plans that list positions and FTEs, Holder said the district will “recod[e]” roles to local funding codes and will institute a targeted hiring freeze in Title I lines: current vacancies will generally not be filled and attrition will be used before adding staff. The district also said it will not expand an Underwood program previously planned for expansion after census/poverty counts fell slightly below the threshold used for that funding decision.

The presentation traced causes for the Title I allocation change to the federal Every Student Succeeds Act (ESEA) allocation formula (the district cited ESEA sections 1124 and 1125) and to DESE’s use of census and tax‑return proxies when distributing Title I dollars. Holder said the district’s local free/reduced lunch count rose from roughly 3,400 students to about 4,100 over two years, but the federal/state allocation formula uses older census proxies that currently understate the district’s need.

Staff asked the Board to approve two items later in the regular meeting: a FY24‑25 final budget amendment (legally required for expense authority) and the FY25‑26 preliminary budget. No formal board votes on those budget items were taken during the work session; the only formal motion recorded in the transcript of the work session was the adoption of the meeting agenda at the start of the session, which passed.

Administrators said next steps include monitoring DESE reimbursements over the next three months, preparing a FY24‑25 budget amendment to reflect revenues as they arrive, recoding affected positions to local funds where necessary, and using attrition rather than filling most Title I‑funded vacancies while the allocation uncertainty persists.

The district’s presentation also covered long‑term revenue context: the Board previously adopted a voluntary rollback of 65¢ that reduced local Prop C revenue by approximately $4 million annually; the district noted it cannot reverse that rollback during a reassessment year. Staff said levy and Prop C conversations will continue in the coming year as levers to respond to statewide and federal funding volatility.