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Board hears special‑education briefing showing multi‑million‑dollar shortfall and steps to improve billing
Summary
District special‑education staff told the board on May 26 that FY25 special‑education expenditures exceeded revenue by roughly $7–8 million, outlined staffing increases and coding errors, and said the district expects a June 9 state review by the SBRC.
District special‑education leaders told the Iowa City Community School District board on May 26 that special‑education expenses outpaced revenues by roughly $7–8 million in fiscal 2025 and explained steps the district is taking to clarify reimbursements and manage costs.
A district presenter explained that special‑education funding is derived from state weights, federal IDEA funds, Medicaid reimbursement and local property taxes. "Level 3 students are weighted at 3.74," the presenter said, describing how the weighted funding is applied to base cost per pupil. Staff said they have seen rising caseloads and an increase in paraeducator and behavior‑intervention staffing from FY23 to FY25; one slide presented at the meeting summarized an increase in paraeducator FTE of about 60 over that period.
Special‑education coordinator Jake Bietens described operational changes to increase revenue capture and coding accuracy, including a switch to the billing vendor Claim Aid and a move to electronic timekeeping for reimbursable services. The team also acknowledged a coding error that misclassified tuition as contract services and said it has notified the state and is awaiting guidance.
Board members focused questions on internal controls, verification that IEP services are delivered, and whether increases in staff were proportional to student need. "We need to be judicious," the presenter said, adding that the district is not planning cuts to students' IEPs but will review coding and eligibility decisions and pursue Medicaid reimbursement where appropriate.
Presenters said the Department of Education had requested additional documentation from multiple districts and that the state will present findings to the State Board of Educational Examiners (SBRC) on June 9; Iowa City staff said they expect to attend that presentation. CFO Pat Moore, in his first full meeting, said bank reconciliations for FY23–FY25 are complete and flagged plans to improve financial processes.
What happens next: the district will continue to reconcile flagged expenditures, pursue Medicaid and other reimbursement opportunities, and appear at an SBRC presentation on June 9. The board and staff plan follow‑up reporting on whether reimbursement and coding corrections materially reduce the deficit.
(Quotes are taken from the district presentation and Q&A and are attributed to staff who self‑identified in the transcript.)
