The Bainbridge Island School District notified parents and community members Oct. 23 that its initial budget projections for the 2024-2025 school year were inaccurate, and many future plans have been put on hold indefinitely.

An error uncovered during September payroll processing revealed that instead of ending the school year with about $2 million, the district’s fund balance will be only $28,000.

The district will have to borrow from itself twice to make payroll in 2025 — up to $3.5 million, which must be paid back with interest in one year. Should it fail to produce a balanced budget, it may enter binding conditions with the Office of the Superintendent of Public Instruction, which will involve heavier oversight from that state office. Districts must request that OSPI step in.

In order to stay above water, the superintendent recommends the district take a number of steps: freeze hiring, spending and travel; postpone bond and levy planning; push the District Improvement Plan forward by one year; limit staff overtime by preventing work outside of contract hours, except when obligated by collective bargaining agreements; and pause all non-grant funded paid committee work, except the District Budget Advisory Committee.

“Because district budgets for the last two fiscal years were inaccurate and mismanaged, and because the gap between the projected expenditures and revenues was reasonably close to what was expected, this error was not flagged when the human resources budget was built in July and August,” acting superintendent Amii Thompson says in a district newsletter.

About $1.5 million in employee retirement benefits were incorrectly entered when preparing the budget. While department budgets normally are completed in June, which allows time for review, fiscal challenges throughout the district in spring delayed the HR department’s budget completion until August, Thompson said.