Tumwater School District eyes deficit elimination for upcoming fiscal year 

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The Tumwater School District (TSD) Board of Directors held a work session for a budget update and to learn of possible financial decisions for the academic year 2025-26. 

TSD Assistant Superintendent of Finance & Operations Ben Rarick tackled the budget update and fiscal recovery plans with the directors on Thursday, Jan. 9. 

The district currently has three options for its budget — plainly eliminating the deficit, adding an interfund loan and building a larger surplus for more flexibility.  

Current financial status 

 “I will just reiterate that last year, the district spent $4.5 million more than it took in revenue, which resulted in the fund balance dropping from over $11 million to $6.6 million,” said Rarick. 

The district’s cash balance in the December general fund amounted to $1.38 million, down from about $2.6 million in November, Rarick said. 

“Last year at the same time, month, end of December, we were at $6.5 million. Currently, we're at $1.38 million for a difference of about $5 million. That gap of $4.5 to %5 million has been relatively consistent,” Rarick explained. 

Rarick said the district will conceivably have “cash liquidity issues in February, March and June.”  

This means a possibility of getting an interfund loan, such as the one presented to the board in December 2024. The loan will be finalized soon at the Jan. 23 meeting.  

An interfund loan, as Rarick explained, does not improve the budget situation for the general fund, but merely provides a temporary loan of cash that must be paid back with interest. 

Enrollment trend 

Even though TSD’s total enrollment has been down, a greater percentage of the students are availing of various opportunities like the New Market Skills Center (NMSC) and Running Start, which impacts the district financially. 

The impact is due to increased staffing and spending, while enrollment has declined. 

“Tumwater is a classic example of the importance of looking at the disaggregated enrollment data as opposed to just the total data,” Rarick said. 

Fiscal recovery plan  

“Given where we are on the cash basis, we will be recommending to the board an interfund loan on Jan. 23,” said Rarick. 

Rarick explained that regardless of which fiscal direction the board plans to move, the loan is necessary for this year and next year as reductions take time to take effect. 

Rarick explained that a multi-year approach is recommended. 

The first step of the approach is done in 2024-25, initiating an interfund loan of $4 million, continuing to implement non-salary reductions, selectively re-fill vacancies and reforming spending practices. 

For 2025-26, the district shall consider a further reduction in staffing and non-salary expenses, according to the board’s set guidelines, and monitor the cash balance. 

The third year, 2026-27 will be used to reassess whether further reductions are necessary. 

Budget options 

The district’s document stated that budget reduction options are derived from the best current information available, and reductions will likely be necessary over multiple years. 

The document stated that budget issues are “necessarily fluid” and might change based on bargaining, state legislative session outcome, inflation, enrollment and other factors. 

Budget option A is to “stop digging,” which means eliminating the deficit and requires approximately $4.5 million. 

Budget option B suggests building a modest operating surplus necessary to avoid the need for monthly cash loans to meet payroll and warrant obligations. This option requires around a $6 million reduction. 

Budget option C is complying with the board policy in one year, eliminating the budget deficit and building a larger operating surplus to get a 6% unassigned fund balance, requiring around $8.5 million. 

Unassigned balance only counts the pots of fund balance that are unrestricted by state and federal categorical requirements. 

A work session lets the school board receive information, discuss procedures and give direction to staff; no formal action is taken. 

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  • OlyBlues

    Past due time for Tumwater Schools to reduce spending. The teachers who went on strike demanding their huge double digit pay raises and now make six figures and have summers off and every break possible contributed directly to this financial deficit. At least they are happy. Meanwhile the district is broke despite taxpayers passing every single levy possible the district puts forward. Time to reduce administration, extra curricular activities, raise class sizes, and consolidate resources due to the reduction of students. Maybe the overpaid teachers have some spending reduction ideas since most of the district's revenue is going to them.

    Tuesday, January 14 Report this

  • HotTractor

    How about we get rid of taxes going to private schools

    Olyblues obviously doesn't know anything about teaching or schools. My Olyblues should volunteer at a school and see first-hand what is going on, instead of parroting anti education propaganda.

    Tuesday, January 14 Report this