Wenatchee School District projects smaller 2025-26 deficit; warns enrollment decline will pressure future budgets

The Wenatchee School District’s executive director of business and finance, Sean Fitzgerald, presented a preliminary 2025–26 general fund budget to the board on June 24 and outlined a four-year forecast that shows a smaller near-term deficit but continued long-term pressure from declining enrollment.

Fitzgerald said the district expects a preliminary budgeted deficit of about $2.1 million for 2025–26 but noted that a number of favorable factors shrank a prior projection of roughly $4.6 million to the current figure. He told the board the district ended the 2024–25 year with a smaller-than-expected draw on fund balance and that several one-time items improved the year-end position.

Why it matters: declining enrollment, state funding rules and inflation create a structural budget challenge. The district must balance staffing, program priorities and reserves while planning capital transfers and bus purchases.

Key points from the presentation - Short-term variance and drivers: When the 2024–25 budget was compiled the district projected a $4.6 million deficit but expects to use about $1.3 million of fund balance at year end. Fitzgerald cited five main factors that reduced the deficit, including local effort assistance adjustments tied to assessed value, internal hires filling previously budgeted vacancies (saving about $1.1 million), and a $1 million return from the capital projects fund related to softball field funding. - 2025–26 preliminary budget: Fitzgerald said the 2025–26 preliminary general fund budget shows a $2.1 million deficit before final adjustments. The district is proposing transfers: $500,000 to the capital projects fund for preventative and emergency maintenance and about $140,000 to the transportation vehicle fund to assist with upcoming bus payments; the transportation amount is expected to be reimbursed by the state next year. - Forecast and levy timing: The forecast shows an improved fund position in 2026–27 once the district’s replacement/renewal levy (EP&O) fully phases in; Fitzgerald said that timing drives a positive fund balance change in 2026–27. Over subsequent years the forecast shows fund balance erosion again as inflation and continued enrollment decline outpace static levy revenue. - Enrollment trends: Fitzgerald reviewed historical enrollment, tying it to birth-rate trends. He said district enrollment peaked in 2015–16 at about 7,655 full-time-equivalent (FTE) students and has declined since. He reported current-year enrollment at approximately 6,550 FTE (including summer school), a drop of more than 200 FTE from the prior year, and projected another decline of about 124 FTE for 2025–26. Fitzgerald noted kindergarten cohorts driven by 2019–2020 birth rates are smaller and projected a kindergarten class around 401 FTE compared with about 501 twelfth graders, widening the pipeline gap.

Board conversation and next steps - The board asked about the district’s practice for aligning staffing to enrollment; Fitzgerald confirmed the forecast assumes staffing adjustments consistent with projected enrollment levels and said final staffing decisions would be refined as fall enrollment data are confirmed. - The budget timeline: Fitzgerald said the district will refine the preliminary budget over the summer, present updated numbers at an August 12 meeting (public hearing), and adopt the final budget at the August 26 meeting before the August 31 OSPI submission deadline.

Ending: The board signaled interest in formal policy work on the district’s minimum fund-balance target (the presentation compared 5% and a proposed 6% minimum) and asked staff to return with final budget adjustments in August.