The Bainbridge Island School District authorized the first of two interfund loans at its meeting Dec. 12, borrowing up to $5.4 million from its capital fund until the fiscal year ends in August.

The loans are part of the district’s emergency actions to alleviate a major cash-flow shortfall discovered in October: a year-end fund balance about $396,000 in the hole. The district also has instituted a freeze on hiring and spending, a pause on bond planning, and some paid committee work, but without the infusion, it would be unable to make payroll throughout the remainder of the school year.

Boardmember Robert Cromwell said that while he’s not generally in favor of interfund transfers and loans, “because you’re papering over the problem,” this circumstance all but requires it — “short of relatively drastic action without any notice— there’s really no other tool available to us…,” he said.

“I think it’s important that people in the community start to really understand the scale of the problems we have. District staff are going to do everything they can to keep impacts away from student experience, but everyone with a family in the district is gonna feel the impact of our budget crisis when we start the new school year next year,” Cromwell said. “I think it’s really important for everyone to sort of squarely confront that reality and start to understand that this is not someone else’s problem. This is something we’re all gonna have to work on solving.”

Superintendent Amii Thompson said that in public meetings with the District Budget Advisory Committee, staff and community members have expressed gratitude for the district’s transparency regarding potential reductions in the coming year. However, she agreed that some are still struggling to recognize the scope of the issue.

“There isn’t that ownership for that understanding, because for so long in our district — and I think probably most places — it tends to just sort of work out. And so there’s this false belief that it’s not going to happen, but it is,” Thompson said. “If we get new revenue, we have got to create a balanced budget, and that’s the message that we’re giving out at the building level.”

Board director Mark Emerson concurred with Cromwell, and expressed appreciation for the realistic approach that the superintendent and financial director Kim Knight have taken in community correspondence. “It’s gonna be some very difficult decisions, but we’re going to get ourselves back to bedrock,” he said.