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Sultan School District reports $1.6 million year-to-date shortfall; special-education numbers climb
Summary
Finance staff told the board the district is $1.6–$1.7 million over expenditures year-to-date, with rising special-education head counts and a low June fund balance prompting short-term borrowing from capital projects to cover payroll.
The Sultan School District's finance director told the board on June 22 that the district is facing a year-to-date shortfall of about $1.6 to $1.7 million as of May and will likely need to borrow from the capital projects fund temporarily to cover June payroll.
"May of 2024, we were $415,000 to the good. This year, we're 1.6 million, 1.7 [million]," the finance director said, explaining the district's expenditures have outpaced revenues. He told directors that year-to-date revenues totaled about $32 million while expenditures were roughly $34 million.
The finance director cited higher certificated salaries as the largest single driver of the deficit, along with increases in benefits and staffing hired before final FTE (full-time-equivalent) counts were settled. He described the position as "being overstaffed" early in the year and said benefits costs rose roughly $500,000.
Enrollment discussion: Finance staff reported that the district began the year with 1,982.4 FTE and had an annual average of 1,984, while noting month-to-month fluctuations. Special-education head counts rose during the year: 372 in October, climbing to about 389 by late spring, with 13 still unverified in the June report. "That's a lot of sped kids," the finance director said, warning that special-education growth affects funding because apportionments are annual averages.
Cash timing and borrowing: The finance director explained that June is a heavy month for payroll relative to apportionment timing. With approximately $900,000 in available fund balance combined with apportionments, projected cash falls short of the projected payroll (about $3.2–$3.3 million), so staff plan to borrow from capital projects with the goal of repaying within 12 months.
Transportation and capital funds: The district earlier planned to buy three buses but reduced that to one after legislative changes to depreciation and expected apportionments; the transportation vehicle fund will drop when a new bus is received. The capital projects fund holds about $4 million to fund many summer projects.
Superintendent and staffing: In the superintendent's report following the finance presentation, the superintendent said reduction-in-force impacts from April have been managed and that staff who were affected have either returned to employment or will be rehired over the summer; the superintendent confirmed no employees will "lose their jobs" permanently as a result of recent RIF activity.
What happens next: Finance staff will continue to monitor cash flow and return to the board with schedules for repaying the temporary borrowing; board members and staff discussed monitoring FTE trends and pursuing additional grants to offset pressures.
