Prosser School District staff warn of multi‑million dollar shortfall, ask board to prepare budget extension

Prosser School District business leaders told the school board on Thursday that the district is projecting to spend above its current authorized budget and will bring a formal budget extension request this summer.

Drew, the district’s business and operations lead, said the board has currently authorized roughly $44.6 million in spending but staff project total expenditures of about $46 million to $46.5 million for the year. He said the district expects a state ‘‘short pay’’ amount of $296,000 for May, with no payment in June and a recovery expected in July, and that those timing shifts will worsen cash‑flow pressures in the near term.

"We're gonna be at a negative fund balance," Drew said during the board update, and added staff will prepare a budget extension for July or August that will show how the change affects the fund balance and request additional spending authority.

Board members and staff traced the gap to several factors discussed at the meeting: timing of state payments, one‑time or unrecovered revenues that had been projected in the budget, higher substitute costs, a recent legislative change to transportation depreciation schedules that reduced expected funding for transportation by roughly $100,000 this year, and unexpected purchases such as a second school bus whose lead time and timing pushed expense into the current fiscal year.

Kim, speaking for district administration, told trustees the state will likely review the district's finances if the fund balance finishes in the red. "We are probably heading to binding conditions," Kim said, describing state oversight steps that can include targeted benchmarks and additional reporting or the formation of a review committee. Kim said binding conditions also can give districts flexibility in how proceeds from asset sales are applied to basic education accounts.

Board members pressed staff for specifics on what drove a recent $2 million overage in one prior budget year and asked for a line‑by‑line explanation of projected overruns; Drew said staff will present more detailed analyses, contract reviews and suggested savings at a work session planned for June 17.

Next steps: staff said they will return with a proposed budget amendment and a detailed explanation of the projected overage, and will present contract and savings options at the June 17 study session. The board's next regular meeting is scheduled for June 10.

(Reporting note: dollar figures and short‑pay amounts above are reported from the district presentation.)