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Lee's Summit R-VII finance panel flags shortfalls in fiscal-year-end revenue, previews FY26 pressures
Summary
CFO told the finance committee the district will likely finish FY25 with lower incidental and special-revenue receipts than projected, largely because some federal and county reimbursements were delayed; the presentation outlined budget pressures heading into FY26 and a year-lag on some transportation reimbursements tied to contracted services.
The Lee's Summit R-VII finance committee heard June 23 that the district will likely close fiscal 2025 with lower revenue than expected after several federal and county reimbursements were delayed.
Mister Holder, the district chief financial officer, told the committee that approximately $1.3 million in early childhood special education (Part B) reimbursement remains outstanding and that a separate shortfall of about $200,000 came from a lower-than-expected basic formula payment from the state. "We will receive that revenue. It will just be booked in a different fiscal year," Holder said.
The shortfalls left the district’s operating and special-revenue funds below the earlier projections in the FY25 budget amendment the committee reviewed. Holder said he had reduced incidental revenue projections by roughly $1.3 million and that, while teachers’ fund revenue would be closer to projections, the district would not meet earlier estimates.
The nut graf: The committee’s discussion centered on timing — funds owed to the district exist but were not released before the fiscal year closed in June — and on FY26 implications. Holder warned of a common budget timing issue: expenses that occur in one fiscal year but whose reimbursements arrive in the next, which can depress year-end fund percentages even when the money eventually arrives.
Key details for readers: Holder said the district expects to receive delayed county and federal payments in FY26, which will improve long-term balances but create a one-year mismatch. He highlighted a roughly $4.7 million regular transfer from the general fund to special revenue already processed in June and noted that June payroll timing makes July’s finance report typically larger.
Committee members asked about the Part B shortfall and the district’s estimates. ‘‘Approximately a million dollars. We requested just under $1.3 [million] … they were only able to release about $280,000 of that,’’ Holder said. Board members added that the state provides limited advance notice of such adjustments; one attendee noted they had not received prior warning that funds would be withheld.
Looking to FY26, Holder previewed pressure from contracted transportation services for early childhood special education, a cost he said will be reimbursable but not until FY27. "There is a year lag there," Holder said. The committee also heard that planned operating expense increases for FY26 include roughly $11 million in increased expenses overall, driven in part by transportation and other contract costs.
The presentation noted the district’s long-term reserves remain healthy despite the timing issues. Holder pointed to investments maturing at higher yields and said the district is positioned to retain reserves above its internal target, even with the FY25 timing gap.
The meeting closed with the committee scheduling deeper budget review sessions at the board’s upcoming work session and a Thursday presentation to the full board that will show the detailed FY25 amendment and the FY26 budget preview.
Ending: The district will finalize FY25 close-out and present a detailed FY26 budget update to the board in July; several committee members said they expect to revisit revenue timing and transportation reimbursement when those lines are realized in the ledger.
