Business manager: failed referendum creates $3.2M pressure on general fund; options include attrition and using reserves

Lynn Knight, the district business manager, told the board the failed referendum reduces revenue by about $2,000,000 for 2025–26 and contributes to a projected $3.2 million general-fund deficit. She said state law requires the special education fund to balance and that shortfalls are currently being absorbed into the general fund.

"So our revenues, because of the referendum not being on 2526, is going to be $2,000,000 less," Lynn Knight said. She reviewed the revenue limit worksheet, explained the difference between revenue inside and outside the revenue limit and said the district's total levy last year was $14,069,886. Knight said the district's Fund 10 tax assessment projection falls from $11,600,000 to $9,500,000 in the coming year without the referendum funding.

Knight described cost pressures and potential responses: increase short-term borrowing (projected to raise interest expense), defer capital purchases and maintenance, and align staff to enrollment largely through attrition rather than immediate mass cuts. She noted the district holds roughly $3.5 million in Fund 46 (capital improvement savings) and identified it as one source the board might consider drawing from, but warned that dipping into reserves could trigger lender scrutiny and possible credit downgrades.

Knight also said she will present an amended budget in June to reflect a roughly $300,000 post-employment retirement benefit error she discovered in the 24–25 figures, and she plans to introduce a ClearGov transparency tool within three months to make financials easier for the public to understand.