Mercer Island board opens first reading of 2025–26 budget; members press for clearer fund‑balance calculations

At a special meeting the Mercer Island School District board held a first reading of Resolution 744, the proposed 2025—26 budget, and debated how the district calculates and reports its general‑fund balance.

Board members and staff said the district added two clarifying notes to the budget document: one explaining that Moody's Investor Services changed its rating methodology in January 2021 to emphasize enrollment, debt and fund balance for U.S. public school districts, and a second footnote explaining that current fund‑balance estimates include built‑in capacity tied to projected revenue per full‑time equivalent (presented in the draft as $38.50 per FTE). Staff said the changes were made at the board's request and that the resolution will return for a second reading next week, followed by the public budget hearing and a vote.

Why it matters: The board's written fund‑balance target appears in district policy OE7, which directs…