Fiscal Year 2025–26

Clarifying the District’s Reserve Balance
In response to questions and informal community discussion about the district’s reserve balance, I want to provide a clear context for how the reserve has changed and how it should be understood. 

Question 1: Why has the reserve balance decreased from the October update to First Interim?
The overall reserve balance decreased because district expenditures increased, particularly in the services line. This was reviewed in detail on Slide 7 of the First Interim presentation, linked below.

As expenses increase, especially in ongoing operational areas, the amount remaining in reserve correspondingly decreases. This is a normal and expected relationship in school district budgeting. When expenditures go up, reserves go down, unless offset by new or ongoing revenue.

Question 2: Why does the reserve appear to be approximately 8%?
The ending fund balance is made up of three distinct components:

3% Required Reserve – mandated by the state

2% Additional Reserve for Economic Uncertainty – set by the Board

Remaining Undesignated Balance (“Available”) – funds not assigned to a specific purpose

Together, these components total just under 8% of the budget, with 5% formally set aside as reserves for economic uncertainty (the required 3% plus the additional 2%). It is important to note that the “available” portion of the fund balance is one-time in nature. These are not ongoing dollars. The multiyear financial projections show that if the district continues to deficit spend—meaning we rely on these one-time funds to cover ongoing costs—those available balances will be depleted over time. If that trend continues, the district would eventually need to make cost reductions or structural adjustments to ensure long-term fiscal stability and avoid financial risk.

Fiscal Year 2024–25