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Business office presents FY25 midyear update and FY26 assumptions; fund balance targeted at 8%
Summary
Business office staff led by Rebecca Magnuson presented a midyear update for FY2025 and assumptions for FY2026, showing projected increased state aid driven by enrollment and special education changes, a midyear unassigned fund balance near 8.2% and recommendations to aim for a higher long-term reserve.
Rebecca Magnuson and a colleague, Rafael, from the district business office presented the fiscal-year 2025 midyear budget update and fiscal-year 2026 budget assumptions to the board, asking the board to be prepared to adopt the midyear budget and approve assumptions at forthcoming meetings.
"We are here tonight ... to present the midyear budget update and the budget assumptions," Rebecca Magnuson said, opening the presentation. Magnuson told the board the midyear analysis shows modest overall stability but identified substantial shifts under the surface that staff are correcting and monitoring.
Key budget points presented: - Revenue: The midyear projection increases total revenue to $82,822,700 from the originally adopted $79,900,000 (a change of about $2.88 million). The increase largely reflects higher enrollment (about 50 additional students year to date) and projected state aid increases, including a projected $1.1 million increase in general education aid tied to added students and roughly $1.0 million projected additional special education aid (pro-rated conservatively at 95%). Magnuson said the budget also includes an estimated $300,000 in new Read-Act-related state funding for curriculum, training and testing materials. - Expenditures: Salary and benefits budgets were adjusted upward by roughly $2.5 million to align the budget with actual staffing and retro pay that were not fully captured in the original budget build. Transportation and utilities estimates were revised upward; pupil transportation increased by about $600,000 given increased custom routes for special education and homeless students. - Fund balance: The unassigned general fund balance is projected to end FY25 at about $5.6 million (roughly 8.2% of expenditures), above the board policy minimum of 6% and the district target of 8% but well below peer districts that often hold substantially higher reserves.
Magnuson recommended the board approve a midyear budget adjustment at the next regular meeting and adopt the FY26 budget assumptions that the finance advisory committee proposed. The committee's assumptions included building an expenditure budget that preserves at least an 8% unreserved fund balance and developing a long-term strategy to grow reserves toward a 12–16% range over time.
Board members discussed tradeoffs between increasing reserves and program choices, the impact of federal and state funding uncertainty (including the potential loss of federal Title funds), the operational need for predictable schedules and professional development time, and strategies to drive enrollment. Magnuson said staff will return to the board in two weeks with the formal midyear budget amendment for adoption and will present a proposed FY26 budget on June 10 with final adoption planned for June 24.
No formal budget vote occurred at the study session; staff requested board direction to proceed with the midyear amendment and FY26 assumptions for formal action at upcoming meetings.
