Durango School District adopts FY26 budget, to use $1.9 million in reserves as board warns cuts likely

The Durango School District No. 9-R Board of Education on June 24 approved the district's fiscal year 2026 proposed budget and a fiscal year 2025 supplemental budget, authorizing the one-time use of approximately $1.9 million from the district's general-fund reserves to balance the operating budget.

Board members and district leaders told the meeting that the one-time drawdown is not sustainable and that further reductions to staff, programs or transfers are likely unless revenue increases materialize. The board directed staff to convene a budget review committee and to provide monthly public updates on a range of options, including personnel reductions, program cuts and changes to interfund transfers.

Why it matters: the board and staff said the district faces a structural gap. Using reserves to smooth a single year's shortfall would reduce the district's financial cushion and require either recurring revenue or deeper cost reductions in subsequent years to avoid repeated draws on savings.

Board discussion and next steps District officials said the FY26 budget shortfall is driven by modest increases in state funding that do not keep pace with rising costs such as insurance and negotiated employee compensation. The board and the district's financial advisory group emphasized that reserves are one-time funds and cannot be used to sustain recurring salary or program costs.

District leaders described a bundle of near-term measures already enacted in preparing the FY26 proposal: hiring freezes for certain positions, a temporary pause on some administrative hires, and percentage reductions applied to departmental and school budgets. Staff told the board they will now create a standing budget review committee that will meet monthly and report back with options, timing and estimated fiscal effects. The committee will include board representation and be the conduit for ongoing community information and staff updates.

Board members and advisors repeatedly urged plain-language communication with district employees and the public so affected staff and families can plan and so community members better understand the limits of reserve funds.

Votes at a glance - Adoption of the FY26 proposed budget and FY25 supplemental budget: motion moved and seconded; board vote recorded as passed on June 24 (vote recorded on the meeting record). The motion authorizes the use of general-fund balance to adopt the proposed budgets. - Resolution to participate in the coordinated election (Nov. 2025) and designate an election official: motion moved and seconded; board vote recorded as passed on June 24 (see Votes at a glance item). (For full text of motions and meeting minutes, see the district packet.)

Clarifying details cited at the meeting District staff said the FY26 budget requires an approximate $1,900,000 use of general-fund reserves to adopt a balanced budget for 2025-26. Staff noted other fund transfers were adjusted: the typical transfer to the capital projects fund (historically $1,500,000) was reduced to $680,000 in the FY26 proposal. Board and staff repeatedly described the $1.9 million as a one-time draw intended to allow additional time to identify sustainable reductions.

What the board did not decide The board did not vote on specific staff-layoff or program-closure measures on June 24. Board members directed staff to convene the budget review group and to return with recommendations, analyses and timeline for any proposed personnel or program changes.

What to watch next The district said the budget review committee will meet monthly beginning in July and will report to the board; staff will provide public updates via the district newsletter. The board also asked for expanded communications to staff and families explaining the difference between one-time reserves and recurring revenue.

Ending note Board members and staff framed the action as a difficult but deliberate step to manage a single-year shortfall while preserving time to seek alternatives. The board's advisers described the decision as a temporary measure that increases pressure to identify recurring revenue or make structural budget reductions.