Mukilteo presents quarterly financial report; district projects enrollment decline and $5M in possible reductions for 2025‑26 budget

John Holtman, the district’s director of business services, presented the Mukilteo School District’s quarterly financial report and initial enrollment projections for budgeting purposes.

Holtman told the board that year‑to‑date revenues as of Dec. 31 totaled just over $100 million and that roughly 75% of district revenue comes from the state, with local levies contributing just under 20% and federal funds the remainder. He said revenues are up about $6.8 million from the prior year to date, driven by timing of federal reimbursements and increased state levy collections, while year‑to‑date expenditures are about $3.8 million higher than last year.

The director warned that the district’s state apportionment will decline beginning in January because current enrollment is lower than the budgeted enrollment used to draw the first four months of state funding. Holtman estimated that, if the lower enrollment were reflected now, state apportionment would be roughly $700,000 lower for the year to date. As of Dec. 31, the district had encumbered 57.9% of its budget and recorded roughly 31.2% of expected revenue and 31.3% of expenditures.

On enrollment, the district presented a multi‑year analysis used for budget planning. Holtman described a downward trend in kindergarten conversion (the share of births five years prior who enroll in district kindergarten), noting a three‑year average around 10.3% and an estimate of 955 kindergarten entrants for next year. Using grade‑to‑grade roll‑forward coefficients and district counts, the district projects a net budgetary enrollment decline of about 311 students relative to this year’s budget (the district expects to budget for roughly 300 fewer students for 2025‑26 than it did for 2024‑25). Holtman said that drop translates into approximately $3.5 million less revenue compared with having the larger student body.

Holtman reviewed district fund balance history and said the board’s previously adopted target (about a 5% fund balance) remains a consideration. To maintain the district’s current fund balance level given projected enrollment and revenue changes, Holtman said the district currently estimates structural reductions in the range of $5 million for next year’s budget.

Board members asked for detail on the drivers behind enrollment declines, including housing costs, demographic shifts and new private school capacity; Holtman said the district will continue to refine projections and incorporate local development, running start and skill center trends. The presentation included a timeline for the budget process: an educational program reduction presentation on March 11; board adoption of reductions March 25; a legislative and budget update April 15; continuing internal work through June 24; and a budget hearing and adoption on July 15.

Holtman closed by reminding the board that federal funding uncertainty and cost pressures in special services remain risks the district is monitoring.