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Arlington finance director warns enrollment shortfall could require interfund borrowing
Summary
Executive director of financial services reported a January fund balance around $862,000, said enrollment is lower than budgeted and warned the district may need an interfund loan from capital projects as early as March; an audit is expected to begin in the next 30 days.
Gina Zuttenhorst, the Arlington School District’s executive director of financial services, presented the district’s financial highlights for January and described a narrowing fund balance amid lower-than-expected enrollment.
Zuttenhorst said the January month-end fund balance was “862,000 ish” and explained that in January the state apportionment reverts to payment based on actual enrollment, which exposed a dip in revenue because the district’s enrollment came in below budget. She told the board the lower enrollment has reduced revenues across the state and could negatively affect the district’s ending fund balance by “as much as 1,000,000 dollars.”
Zuttenhorst said the board has already authorized the ability to make an interfund loan from the capital projects fund and that, while the district has not yet used that authority, it could be “very, very close to a potential need for an interfund loan in March.” She emphasized the loans are internal (borrowing from the district’s capital projects fund) and said the district expects to have sufficient resources by year-end to repay any such loan plus interest.
She also said the district will start its audit for the 2024–25 fiscal year in about 30 days and that staff are monitoring short-session legislative activity that could affect next year’s budget.
Board members asked whether other districts are seeing similar enrollment declines; Zuttenhorst said many districts are experiencing lower enrollment and some are making reductions. Directors thanked her for the update and discussed how prior federal ESSER funds and changes from the McCleary funding model had previously increased fund balances.
Next steps: Staff will continue to monitor enrollment and cash flow, and the board will receive additional budget briefings as the district develops next year’s budget. No formal board action (loans or budget changes) was taken at the meeting.
