University Place previews routine 2025–26 budget; federal funds uncertainty and levy renewals flagged

The University Place School District Board of Directors heard a preliminary 2025–26 budget presentation Tuesday that district staff described as largely "routine and maintenance level," but that includes one area of uncertainty: federal funding.

Executive Director of Business Services Alfonso Melton told the board the district expects enrollment to remain essentially flat at 5,255 students for 2025–26 and reported a beginning fund balance in the general fund of about $10.5 million. Total budgeted revenue for the general fund is roughly $104.6 million, with expenditures just under $107 million and a projected worst‑case spend down of about $2.3 million, leaving an ending general‑fund balance slightly above $8 million under that scenario.

Melton said federal funds total approximately $6 million, of which roughly $1.5 million is budget authority kept in reserve as grant capacity; the remaining federal dollars are distributed across multiple programs, notably special education and child nutrition. "With one exception, what you'll find is that it's routine and maintenance level," Melton said, adding that the federal funding picture is the primary area of budgetary risk because program funding and rules remain uncertain.

Why it matters: local levies and federal categorical grants are material to the district’s program mix. Melton told the board the educational programs and operations levy that makes up about 16 percent of the district’s revenue portfolio expires in 2026; staff plan to return with a resolution and a voter measure request in early 2026. Capital levy authority also expires in 2026 and will factor into future capital‑planning and bond discussions.

Key details and context

- Enrollment: district projection for 2025–26 is 5,255 students (Melton). Staff noted current‑year enrollment trends that typically peak in February and trend down slightly by year end. - Fund balance: beginning general‑fund balance shown at about $10.5 million; board policy minimum is 5% plus a 2% economic stabilization amount, and staff said the preferred range is roughly 10–14% of annual budget to give the district time to respond to funding changes. - Revenues/expenditures: general‑fund revenue budget ~ $104.6M; general‑fund expenditures just under $107M; projected spend down about $2.3M under a conservative scenario. - Federal funds and program exposure: roughly $6M of federal funding overall, concentrated in special education and child nutrition programs; Melton said the district is budgeting on the assumption current federal funding continues but will adjust if policy or funding changes. - MSOC (Materials, Supplies & Operating Costs): the district reported state MSOC revenue of about $8.2M and planned MSOC spending of roughly $10.4M, meaning the district covers a portion of MSOC expenditures beyond the state allocation. - Transportation and electric buses: transportation fund shows about $577K in revenues vs just over $2M in expenditures with an ending fund balance around $687K; the district acquired three electric buses funded largely by grants and received the grant proceeds for the vehicles already. Melton said the infrastructure portion of some bus grants remains and is smaller than the vehicle portion. - Capital and debt: capital‑projects fund shows roughly $3M in revenue and $8.5M in expenditures with a projected ending balance of about $1.1M; district bond maturities in 2029 mean future bond or levy decisions could affect the debt‑service and capital project plans.

Board and staff comments

Board members asked about the district’s exposure if federal funds change and how fund balance supports planning. Superintendent Jeff (first name only in the transcript) and Melton repeatedly emphasized that fund balance provides time to respond rather than forcing immediate, potentially harmful reductions. Melton also outlined the budget calendar and next steps: a public hearing and a shorter August presentation and a December adoption resolution to finalize any economic stabilization amount when the 2024–25 year closes.

What’s next

Melton said staff will return with full F‑195 documents for board review, hold a public hearing in August and present a resolution in December. He also said staff will present a levy resolution and voter‑measure request early in 2026 for the educational programs and operations levy that expires that year.

Sources: Presentation by Alfonso Melton, Executive Director of Business Services, University Place School District (preliminary budget)