Tumwater board approves interfund loan, directs cuts after $4 million shortfall

The Tumwater School District Board of Directors on Jan. 23 approved an interfund loan to cover a cash shortfall and adopted a resolution directing reductions in educational support programs as district leaders warned the district could run out of cash by March.

The board voted to borrow $4,000,000 from the district capital fund for cash-flow purposes and approved a resolution described by Assistant Superintendent Ben Rarick as directing the district not to include 27 positions (23.1 full-time equivalents) in next year’s budget. Rarick said the steps are the first in a multi-step plan to balance next year’s budget.

Why it matters: District officials said lower-than-expected student enrollment and higher operating costs left the district with insufficient cash to meet payroll without the loan; the staffing reductions, temporary pay changes and other measures are intended to preserve the district’s ability to operate through the 2025–26 budget year.

Key details - Interfund loan: Kira Acker, director of financial services, told the board the district will borrow $4,000,000 from the capital fund “for cash flow purposes” until levy and other revenues arrive in the spring. Acker said the capital fund had sufficient balance to provide the loan. - Program reductions: Rarick said the adopted reduction resolution covers 27 positions equaling 23.1 FTE. He described the reductions as focused “on programs and services that are furthest away from the classroom and outside of schools.” - Administrator pay and furloughs (transparency): Rarick stated the superintendent intends to freeze salary increases next year for administrators and non‑represented staff and to implement three unpaid furlough days for administrators (four days for the superintendent and the assistant superintendent of finance and operations). He described that step as a non‑bargaining action to reduce costs that does not require a board vote.

What the board said and voted Assistant Superintendent Ben Rarick framed the decisions as painful but necessary. “The district will literally run out of cash in the month of March,” Rarick told the board before asking for the vote on the reduction resolution. Kira Acker told the board the loan is needed because monthly state funding timing and a shortfall in expected enrollment revenue have reduced available cash.

Board action and next steps The board approved the interfund loan resolution and the reduction-in-education-program resolution at the Jan. 23 business meeting. Rarick said the reductions are a first step and that some affected employees may remain on payroll for months depending on the contract end dates; the reductions direct that the positions not be included in next year’s budget. Rarick urged community advocacy to the state legislature to seek additional K–12 funding.

Community reaction and consequences Multiple employees and community members spoke during public comment earlier in the meeting about specific positions under threat, the proposed furloughs and the planned elimination of bus aide roles. Bus aides and classified staff described their roles in student safety, student behavior support and day-to-day operations; they warned that eliminating those positions could increase pressure on bus drivers and custodial and maintenance staff.

Budget context and enrollment A district financial update presented in the meeting packet showed an ending cash balance and monthly expenditures that, officials said, required short-term borrowing. Acker said capital projects held roughly $1,450,000 in available funds and that the $4 million loan was available in the capital fund for the district to use for cash flow. The district reported being under its budgeted K–12 average FTE by about 49 students at the January count, a gap that district staff quantified as roughly $400,000 in revenue shortfall relative to the budget.

What the district will do now District staff will implement the reductions as directed, prepare next year’s budget without the affected positions, and monitor cash flow through the spring. Officials said they will continue to pursue state assistance and encouraged community members to contact legislators about pupil transportation, MSOC (material, supplies and operating costs), and special education funding.

Votes at a glance - Interfund loan resolution (Resolution 062425): Approved (motion moved and seconded; board voted to approve). The motion authorized borrowing $4,000,000 from the capital fund for cash flow. - Reduction in educational program (Resolution 072425): Approved (motion moved and seconded; board voted to approve; one board member recorded an abstention). The resolution directs that the positions listed in the resolution not be included in next year’s budget and includes the superintendent’s non‑voted recommendations to freeze compensation increases for certain employees and to implement furlough days for administrators. - Note: The meeting included other votes (see separate articles and the meeting minutes).