A preliminary look at the projected 2024-25 school year budget at the July 25 meeting of the Bainbridge Island School District shows a narrow gap between its fund balance and its goal of fiscal security.

At the time of presentation, BISD needed $977,000 to reach its minimum 5% fund balance for the school year, down from a $1.1 million discrepancy estimated in May. BISD must approve its budget for next year by the end of the month.

“It’s not insurmountable. It’s much better than $4 million, much better than $100 million, if you’re looking across the water. It’s hard work, but we can do this,” said district financial officer Kim Knight.

Knight presented the board with an overview of the budget, explaining revenue sources, expenditures and the potential impacts to both that have shaped the district’s financial outlook for the upcoming year. Budgeted revenue for the general fund is projected to be $67.7 million, about 75% of which originates from state or federal grants, 16% from local taxes, like levies, and the remaining 9% from other avenues, such as preschool tuition, donations, student fees and facility rentals.

However, expenditures may reach $69.4 million, which puts the district’s cash flow in a tight squeeze come spring of 2025.

The general fund is not the only element of BISD’s funding story: capital projects, transportation vehicles and debt service payments are all funded separately and are all in fiscally healthy condition, but state law is strict about how the funds may be used. In June, the district may be able to lean on the capital projects fund, which is projected to end up with about $3.1 million at the end of next year.

“There is enough [funding] when the needs arise next June — and I’m going to say ‘when’ at this point — to make payroll. We do still have a balance here that we could borrow from ourselves,” Knight said.

The numbers are not set in stone. Until enrollment is finalized, the district may see fluctuations in its funding from the state. BISD uses a survey called the Annual Back-to-school Check-In to assign class schedules and gauge how many students will be returning. District officials state that often, responses to the ABC roll in slowly over the summer and ramp up closer to the first day of school.

“This is part of the ongoing updates that we will have to make throughout the summer — really monitoring where enrollment is, and if we can possibly revise upwards,” Knight said. “We don’t want to be caught off guard by over-projecting our enrollment.”

So far, the district has enrolled 3,476 students, up from 3,466 in June of 2024. All 10 new students were enrolled in the district’s Alternative Learning Experience curriculum, in which all or a portion of instruction is delivered outside of the regular classroom.

School board president Mark Emerson said that the district is taking a wide lens. Statewide, financial struggles are motivating districts to put pressure on the legislature to amend the apportionment formula.

“We’ve had many, many discussions at the board level about the number of districts that are going to go into their own version of bankruptcy over the next year, and it is creating an intolerable situation with the legislature that they know they have to act” upon, Emerson said. “We cannot in good conscience do very disruptive programmatic and staffing cuts, just to have the legislature come through.

“For lack of better terminology, we are taking a risk and dipping into that fund balance on the very strong assumption that the legislature has to do something to help districts as a whole.”