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Northshore School District projects improved balance but warns of speakered funding gaps
Summary
District staff reported October enrollment above budget, a rebuilding fund balance, a projected special-education shortfall and potential June cash-flow pressure; the board agreed to monitor levy receipts and asked staff to return with a borrowing resolution if needed.
Superintendent Justin Irish and finance staff told the Northshore School District board at a study session that enrollment is higher than the budgeted projection and that the district's fund balance is improving, but material funding gaps remain in special education and basic education.
Chris Bergen, the district's budget presenter, said October full-time equivalent enrollment was 21,449 compared with a budgeted figure of about 20,091, leaving roughly 458 FTE above budget as of October. "October FTE was 21,449," Bergen said, and the district is seeing gains at elementary and high-school levels while running-start participation has grown compared with the pandemic dip.
Bergen told the board that special education continues to outpace state funding. "We budgeted a deficit of about $21,500,000" for special education in 2024-25, he said, and while the legislature's accounting adjustments may shift that pressure between special and basic education in future years, the cost pressures themselves remain. He added that the larger "mechanical" shift will push the comparable gap into basic education next year, which staff estimated as roughly a $40 million frame for context.
On fund balance, Bergen reviewed a multiyear picture: the district's fund balance fell from about $39.5 million in 2021-22 to a low near $8.2 million in 2023-24 and is projected to end 2024-25 near $16.6 million. He described that position as recovery but said the district remains below a newly cited 6% statewide benchmark: "We're still in financial recovery as a district," Deputy Superintendent Jolynn Bergey said.
Staff emphasized that about 87.4% of expenditures are salaries and benefits and that leaves limited nonpersonnel levers. Bergen described conservative budgeting and one-time revenue items (safety-net funds, one-time OSPI payments, rental and grant gains) that produced an $8.4 million net revenues-over-expenditures result for the most recently closed year.
Bergen presented a monthly cash-flow projection showing a potential negative position in June (about -$5.1 million). He told the board that receipt of safety-net funding could avert short-term borrowing but recommended the board prepare a resolution authorizing a borrowing plan if needed. "We will likely bring a resolution to the board in February or March asking for security and making sure we have a plan in place to pull the trigger if and then we need it," he said.
Board members pressed staff on the timing and consequences of a February levy (collections would not begin until 2027), attrition versus enrollment dynamics, and how running-start apportionments are used. Bergen said the district retains 7% of running-start apportionment and typically spends that on counseling and support tied to the program.
The board did not take formal action on the fiscal items at the study session. Staff will return with more refined projections after the legislative session and with a recommended resolution to authorize short-term borrowing if necessary. The board's next budget study session was scheduled for Jan. 12, with school allocations due Feb. 27, a budget study session on April 27, a required public hearing June 22 and hoped adoption on July 13.
