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Evergreen officials warn of $10 million 2425 shortfall; propose $10 million short-term loan and multi-year reductions
Summary
District finance staff told the board the 2024–25 books close with an estimated $10,000,000 deficit driven by rising special education costs and enrollment declines; a $10,000,000 interfund loan from capital projects will be proposed in December while the district pursues a phased three‑year reduction plan.
Jennifer, the district’s CFO/business manager, told the Evergreen board the district expects to end fiscal 2024–25 with a roughly $10,000,000 deficit driven largely by increased special-education enrollment and related staffing costs. "Instead of a $4,000,000 deficit for 24–25, it looked like we were going to end the year with a $10,000,000 deficit," she said.
The presentation outlined two main drivers: a long-term enrollment decline (from about 26,000 students in 2016–17 to roughly 22,000 today) that reduces state apportionment revenue and higher-than-expected special-education spending that is not fully funded by the state. Jennifer said basic education funding averages about $11,000 per student, and that the district’s unrestricted fund balance closed the year at just over $14,000,000 (about 3.4% of prior-year expenditures), below the board policy minimum of 5%.
To avoid near-term cash‑flow shortfalls in January and February, the CFO said she has drafted a resolution for the December board meeting to request a $10,000,000 short-term interfund loan from the capital projects fund. "I put a resolution together for a short term interfund loan of $10,000,000 that we will take from the capital projects fund," she said, adding the loan would be repaid when apportionment funds arrive.
Looking past a temporary loan, district staff proposed a three‑year plan to restore reserves to policy levels while minimizing upfront cuts. The plan would spread $25–26 million of reductions over three years, beginning with an $11,500,000 reduction next year, followed by additional reductions in subsequent years contingent on assumptions about state funding and compensation settlements. The CFO cautioned the forecast rests on two major assumptions: only maintenance‑level state funding and that staff groups accept increases equal to the implicit price deflator (IPD).
Board members asked about the implications of repeated interfund loans at the state level, whether payables could be delayed, and whether extreme options such as school closures might be necessary. The CFO and superintendent said a school closure would be a last resort and that staff aim first to spread reductions, engage the EPS budget committee and gather community input before any formal educational‑program modifications are proposed.
Votes and next steps: the interfund loan resolution will be posted for the December agenda and staff said they will continue community engagement through the budget committee (first meeting Dec. 11). The board approved routine consent agendas and other items during the same meeting.
