District financial review shows multi‑million‑dollar shortfalls; board adopts 2025 legislative priorities focused on funding

The Shoreline School Board received a detailed fiscal briefing Dec. 10 that highlighted recent improvements in the 2023‑24 annual financial results but also a multi‑year budget outlook that requires reductions and legislative advocacy.

Assistant Superintendent of Business and Operations Angela Van Essen reviewed the 2023‑24 Annual Financial Report (AFR): the general fund generated about $171 million in revenues against nearly $170 million in expenditures, leaving an ending total fund balance of approximately $9.6 million. Van Essen said the capital projects fund began the year with a much larger balance and declined due to planned projects. She noted revenues for 23‑24 exceeded budget by about $3.6 million, while actual expenditures slightly exceeded budget by about $1.3 million; the board previously approved a budget extension to remain in compliance.

Looking ahead, staff presented a 2025‑26 preliminary outlook that estimated a negative unreserved fund balance (projected -$1.5 million) under current assumptions and identified a potential Reduced Educational Program (REP) target of at least $6.5 million to reach an estimated 1.6% unreserved fund balance — still below the district’s policy minimum of 4%. Staff attributed the projected deficits to a combination of an ongoing structural gap between state/federal funding and local costs, increased special education expenses, rising substitute costs, and other operating pressures.

Van Essen listed headline shortfalls the district faces if services are maintained at current levels: an estimated special education funding gap of about $8 million, unmet transportation needs near $2.2 million, and a staffing‑related shortfall the staff characterized as roughly $27 million to fund required positions and competitive compensation. Van Essen and board members cautioned that these figures are preliminary, depend on enrollment and legislative outcomes, and include assumptions about improved year‑end fund balances.

The board discussed proposed guidance for the 2025‑26 budget process: avoid binding conditions that would require borrowing, prioritize student outcomes and supports for students furthest from educational justice, maintain core building and central services where feasible, and plan to rebuild reserves over a multi‑year horizon “as conditions permit.” Members requested clearer language to reflect community engagement and that the district may need to “realign” services if additional state revenue is not forthcoming.

Director Jernigan presented the recommended 2025 legislative priorities, focused on: MSOC/AMPLI funding and indexing for inflation, updated substitute funding, staffing allocations and compensation, full funding for IDEA/special education costs, funding for whole‑child supports (including mental health and universal school meals), and transportation costs. Board members discussed strategic advocacy approaches in a constrained state budget environment and agreed to coordinate with neighboring districts and WASDA where appropriate. Director Williams moved and Vice President Hill seconded a motion to adopt the 2025 legislative priorities; the board approved the priorities unanimously.

Ending: Staff will return to the board with more refined REP proposals, community engagement plans and a timeline of milestones (preliminary enrollment projection in January, REP resolution in February, further budget reviews through spring). The board directed staff to incorporate community input and prioritize recommendations consistent with the approved guidance and legislative advocacy goals.