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ISD 279 presentation shows long-range model projects declining fund balance without early adjustments
Summary
District staff presented the LRFP model showing revenues projected to lag expenditures and a projected fund-balance decline beginning in FY25; staff urged early operational adjustments and said no strategic investments will be proposed for FY26.
John Morstad and Kelly Banousa presented ISD 279's long-range financial planning model, warning that projected expenditures will begin to outpace revenues and the district's fund balance is expected to decline.
"As you can see, those expenditures are projected to outpace revenues beginning with this year '25," Kelly Banousa said while walking the board through seven-year projections. Banousa noted the board's minimum fund-balance policy of 5% and said the LRFP model currently does not support new strategic investments for FY26.
Banousa said the district's adopted budget for the current year was roughly $399,000,000 and that as of December an additional $47,100,000 appeared in direct funds. The projection assumes a 3% annual expenditure factor; staff cautioned that exceeding that parameter would push the district into larger deficits. Morstad reiterated that earlier, smaller operational adjustments spread across years are preferable to sudden large cuts later.
Board members pressed on timing, asking when the model's "red" years appear; staff said the red trend becomes clearly visible in the 2029'30 window and that transportation contract negotiations could introduce multi-million-dollar costs into the near-term forecast. Staff said they would present more targeted operational adjustments and revised projections as the budget process continues toward the Feb. 25 business meeting.
