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Pasco budget briefing: district reports cautious optimism but projects conservative enrollment scenarios
Summary
Chief financial staff presented enrollment and revenue projections for 2026–27 and said the district improved cash flow and controls after 2024–25 adjustments. Staff proposed budgeting conservatively (low‑end FTE) while aiming to rebuild an unassigned fund balance toward 5% or higher; Moody's bond rating and its implications for future borrowing were also discussed.
The board received the first budget briefing for 2026–27 focused on enrollment and revenue. Dr. Joey Casta summarized the district's fiscal recovery measures implemented in 2024–25 and reported that staff closed the year with an unassigned fund balance of about 3.43% and that cash on hand topped $20 million in April.
Casta emphasized that enrollment (counted as FTE) drives state funding and staffing. With May counts the district projects approximately 17,419 FTE for 2026–27. Staff presented three enrollment scenarios: a conservative estimate near 17,123 FTE (yielding about $348 million in general‑fund revenue), a mid scenario around 17,190, and a higher scenario near 17,267 FTE (about $351.5 million). Casta said the difference between the low and high scenarios is roughly $3.5 million in revenue and recommended budgeting toward the conservative side to avoid the risk of OSPI clawbacks if FTE is overestimated.
Board members asked about trends driving enrollment declines (declining kindergarten cohort sizes, Running Start shifts, early graduations) and about the pace for rebuilding fund balance. Casta said the district is aiming to return to a healthier fund balance (staff discussed 5% as a working target and noted Moody's analysts are looking for stability and, in some cases, higher reserves). The district also confirmed the Moody's rating was lowered from AA3 to A1; staff said the downgrade underscores the importance of growing reserves before future bond borrowing.
Next steps: staff will finalize staffing and expenditure recommendations based on the chosen enrollment scenario and present a draft balanced budget later in June with a public hearing and adoption timeline into July.
