District finance official previews FY26 budget, highlights $7 million capital plan

Lisa Kowalski, the district’s finance staff member, presented a draft FY26 budget and a look back at FY25, saying the numbers shown are preliminary while auditors complete work but are close to final. "These are very, very close, if not actual numbers that you will see on our AFR when the auditors do end up presenting it," Kowalski told the board.

Why it matters: The budget presentation lays out revenue sources, planned capital spending and reserve levels that will shape tax levies, planned projects and the district’s ability to absorb cost increases such as health‑insurance premiums.

Kowalski said the district is projecting a FY26 capital package that includes a weight‑room/waiting‑room addition for which she has budgeted $7,000,000 in total (about $4.5 million budgeted in O&M and $2.5 million in the capital projects fund). She said $2,000,000 is a carryover from FY25 and an additional $2,500,000 transfer from working cash is planned to fund projects in O&M. "The operations and maintenance fund contains $10,800,000 for the capital project," she said, adding that some of that is carryover from FY25 and some new dollars are being transferred in.

Kowalski reviewed FY25 actuals versus budget: she said the district anticipated using $431,000 from the education fund reserves but ended up drawing $175,000. Overall fund balances were better than projected — a net change projected at a negative $7.8 million became a negative $2.4 million, which she characterized as an intentional draw on reserves to fund projects.

Revenue assumptions in the draft include property tax as the dominant source (72.4% of registered revenue), evidence‑based funding (about 5.2%), CPPRT (3.5%), federal sources (3.2%) and other state revenue (3.2%). Kowalski said transportation reimbursement estimates are uncertain and could add about $135,000 if the state pays the currently estimated 82% reimbursement level. She said investment interest income has been stronger than in earlier years and that other local revenue (about 12.5%) will fluctuate with market rates.

She warned of cost pressures: the district is budgeting for a roughly 18% increase in health insurance costs year over year and is planning for total salary and benefit increases that raise expenditures by about $1.9 million (7.1%) across affected funds.

Timeline and next steps: Kowalski said a public hearing and budget display notice ran in the paper on Aug. 1 and that the board will discuss and is expected to approve the budget at the September meeting. She warned that the district must file its budget by Sept. 30 and that numbers could change before final adoption because of pending audit adjustments and state revenue confirmations.

Board members thanked Kowalski for the detail of the presentation. Kowalski invited questions; none changed the figures presented during the meeting.

Ending: The figures presented are a working draft; several revenue lines remain subject to auditor review and state reimbursements, and the board will hold the statutorily required public hearing before taking final action.