Budget Development

Why is the District in a position to reduce its budget?

As with many school districts in the region, our district is facing reductions to next year’s budget due in part to a drop in student enrollment, rapidly escalating insurance/energy/supply costs, across-the-board cost increases for goods and services, and increases in staff pay and benefits. This leads to a reduction between $9-11 million for next year's budget.

Additionally, we're at the end of our pandemic relief funds – referred to as ESSER (Elementary and Secondary School Emergency Relief) funds. We have invested those dollars throughout our schools to support clean, safe environments and provide the staffing and resources that students need to be successful learners. We knew these funds would not be replenished and have been planning for this budget adjustment. This will result in $11 million dollars of less resources in next year’s budget.

What steps are being taken now to reduce next year's budget?

To address these challenges, the district has already taken, and will continue to take, steps to make the additional reductions needed for the upcoming school year. We have initiated efforts to slow spending this school year. This will likely result in some savings into future budgets, but this is not a long-term solution. Recently we put a freeze on non-essential discretionary expenditures, and we will evaluate each open staffing position for timing and necessity for the remainder of this year.

What is the timeline for the budget work?

Work on the 2024-2025 school year budget has been underway since December as we looked at early enrollment projections and began to estimate our revenue and expenses. We will continue through the spring to determine what can be reduced in our district to help balance the budget. We anticipate presenting a budget for the public and board to review in early June and will recommend adoption of the budget to the School Board on June 26, 2024.

Will this impact athletics or activities?

Work is underway to determine what will be reduced from our budget. These types of programs are not currently planned for reduction. We are working diligently to make reductions as far away from classrooms and student experience as possible, knowing that every part of our school system is important to our students and community.

Can the District use voter-approved Capital Projects funding, technology levy funds, or school construction bond measures to soften this general fund reduction?

No. While the technology levy can be used more flexibly to cover technology needs and the staff who support technology, it cannot be used for non-technology things. The school construction bond dollars approved by our voters are used only to build and modernize schools and support facilities. Those funds are fully protected, and can only be used for the stated purposes. We will hold true to our promises to complete construction projects presented in our bond measures, including the complete remodel of Renton High School and numerous other projects.

Is this a short-term problem? What about the following year?

If enrollment continues to decline, and costs for insurance/energy/supplies, goods and services, and pay and benefits continue to increase, we will likely be in this position again and will need to be vigilant about aligning our expenditures carefully to our revenue.

What is Ending Fund Balance?

The ending fund balance is a bit like a savings account. There are two parts to it, reserved fund balance and unreserved fund balance. If the district spends less than our revenue each year, the remainder is added to fund balance. The reserved fund balance exists for assets we have for a specific purpose. This includes carryover – or unspent funds – from programs with inflexible expenditures. It also includes things like our inventory of food items that have not yet been made into a meal and served/sold to students. The unreserved fund balance is liquid cash – available to use on any district expense and available to cushion the months when our revenue from the State is lower, as we are not paid in 12 equal payments.

The Renton School District Board of Directors sets a goal of a 7% ending fund balance, assessed by 7% of our expenditure budget. It is important to have funds available for unexpected expenses, such as decreased enrollment or unforeseen circumstances. It can also be used, if it grows high enough, to make investments in our school system with something such as new curriculum or other one-time cost items. Fund balance does not automatically replenish, so it should not be spent on ongoing cost items.

Why is Fund Balance important?

The district must only have a positive ending fund balance to comply with state requirements. However, that is a financially precarious position for the district. We do not receive our revenue in a steady, equal stream. Our revenue from the state fluctuates by month between 5% and 12.5% of our annual apportionment dollars. Our local levy tax proceeds arrive mostly in two large payments in April and November, aligned with property tax collection. Fund balance helps to offset those months when revenue is lower and helps us with cash flow during those times. If the District projects our budget with a certain amount of student enrollment and those students do not arrive in our schools in September, ending fund balance helps to buffer those losses. In a situation when a District has a very low fund balance, any additional financial issues result in mid-year reductions, which would be very disruptive and difficult.

• State Legislative session convenes
• Develop the budget timeline
• Project enrollment for subsequent year
• Measure the needs of the community

• Review staffing formulas and non-salary allocations
• Collaborate with schools and departments around existing staffing needs
• Review Special Education programs and service levels
• Present initial budget estimates to the Board

• State Legislative session concludes (even years)
• Initial staffing projections completed
• Second collaborating meetings with schools and departments

• Materials, Supplies and Operating Costs (MSOC) budget projections are distributed to schools and departments
• Staffing models are produced with projected costs
• Additional staffing and supplies budget requests
• State legislative session ends (odd years)

• Finalize the State form F-203 revenue projections
• Staffing budgets are completed
• Preliminary budget and estimates are reviewed by leadership

• Budget revenue estimates reviewed by the Education Service District (ESD) 
• Preliminary State F-195 completed
• Preliminary State F-195F completed
• Preliminary budget presented to the Board

• Board conducts a public hearing around the preliminary budget
• Recommended changes are made to the budget

• The final budget is adopted and the annual appropriations limit is established for the budget year