The Tumwater School District (TSD) Board of Directors authorized a $4 million loan from the Capital Projects Fund (Fund 20) to the General Fund (Fund 10), as the district experienced its lowest September cash balance in its General Fund since at least 2018. The cash balance was $909,700.30.
The amount is more than 50% lower than the cash balance in any other month during the period. By comparison, TSD’s cash balance in the County Treasurer Report in December 2024 stood at $1,380,251, a stark contrast to last year’s excess of $6.49 million.
Aside from the interfund loan, the district will also terminate 27 staff positions from the district office and support services through a Reduction in Educational Program.
The Interfund Loan Resolution 06-24-25 authorizes the district to loan cash reserves from one fund to another to meet all of its cash obligations within a given month. The cash is then paid back to the originating fund with interest.
“I'm not taking this lightly; it is very difficult for all of us,” said District 1 Director Jill Adams. “But we have no choice because we're short about $4 million as I understand it and we need the loan to keep things going so we can pay the bills, pay the staff.”
Adams said the current enrolment trend showed the district did not get the growth in students it projected, leading to less funding.
TSD has funded a lot of the programs, as the district only gets 80% of the cost from the state. Part of these costs are the staff hired “in good faith” when the district’s projections showed it could afford these services.
“It's something that we need to do, and we need to have a balanced budget. That's the way it works …these are dark times for us and we will be moving ahead to try to do a better job,” Adams added.
The resolution memo stated that cash loans and fund transfers are different, as an interfund loan is not a solution to a budget deficit because it is only a cash solution that does not permanently increase revenue or expense to the receiving fund.
The directors also approved the Reduction in Educational Program Resolution #1, 07-24-25, for School Year 2025-26, which reduces the current number of certificated and classified staff positions.
The memo stated that the directors have determined that for the next school year, anticipated financial resources are not enough to maintain TSD’s educational program and services at the same level as the current year.
At a prior Jan. 9 work session, Superintendent Kevin Bogatin directed the staff to propose cost reduction starting with staffing outside the classroom.
The resolution is limited to staff reductions from the district office and support services team.
“There are none of these positions that are being reduced because they don't matter. ... All of these cuts will be difficult. ... This is simply an issue of affordability. Our estimates right now (are) apropos to the vote you just took is that the district … will literally run out of cash in the month of March,” said Ben Rarick, Assistant Superintendent of Finance & Operations.
The first reduction does not include most school site staff or teachers on special assignment (TOSAs). A second resolution next month may impact other staff, including people currently working at school sites.
The reduction will terminate 27 positions: five administrator and manager positions in the District Office and Support Services; five office professional support positions, one non-represented staff position, and one paraeducator at the District Office; five positions from the Custodial & Maintenance department; eight Transportation Aides & Staff; and two Support Services Technicians.
The resolution is not an immediate termination, as it will eliminate the positions next school year. State law requires that any affected certificated employee be given notice of such action on or before May 15.
Aside from the board-approved reduction of positions, the superintendent also intends to incorporate the following cost-saving measures into the 2025-26 school year budget:
“It would be the superintendent's intent to develop a 25-26 budget that includes no salary increase for the two groups for whom we can recommend that without going to the collective bargaining table —that is the administrators inclusive of principals and non-represented staff,” Rarick said.
Rarick added that the superintendent recommends the implementation of a furlough day schedule, which can be seen as a “temporary pay cut for just administrators.”
“If there's ever a time to be involved in education funding, it is now. But the district finds itself in an extraordinary situation, one that has never occurred in this district,” Rarick said.
The estimated savings would be approximately $2.3 million from the reduction of positions and $325,000 from the COLA freeze and furlough.
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