At least one of three cash-starved Washington school districts is expecting to meet conditions set out by the state and regain its financial footing.
The Mount Baker School District in Whatcom County faced more than a million-dollar deficit in August last year, but after months of being closely monitored by the Office of Superintendent of Public Instruction (OSPI), the state is expecting the district to “return to financial solvency,” according to a December statement from OSPI’s Executive Director of Communications Katy Payne.
The state first issued “binding conditions” for Mount Baker in August 2023 after the district could not balance its budget, and expenditures exceeded revenue. Mount Baker was issued new binding conditions, made public on Friday, Jan. 26, reducing the number of cuts the district must make in the next year to meet requirements.
Binding conditions allow the OSPI and Northwest Educational Service District to monitor district finances, and also allow the district access to money needed for operations. But budget cuts will still be needed to become financially solvent.
Both the district’s budgeted general fund balance for the 2024-25 school year, and the actual general fund balance submitted in November 2025 must be no less than 4% of their total general fund expenditures — $1.2 million — to meet the conditions. This accounts to $305,295 fewer reductions in budgeting for the 2024-25 school year compared to the initial binding conditions.
“While that is not the major change we were hoping for (either 2% or 3% would have been better) it is still a positive change and we are grateful to OSPI for listening to us and being willing to adjust,” district director of finance Brian Fraser wrote in a letter to community members on Jan. 26.
Reduced state funding, declining enrollment and the loss of timber sale revenue all contributed to Mount Baker’s financial situation, Fraser said.
Fraser, who took over in July after the previous director of finance resigned, said in December he’s confident that the district will make it through.
“There’s lots of talk about some pretty drastic outcomes of the district dissolving …” he said in December. “There has been optimism expressed from the OSPI and ESD [Educational Services District] that we’ve hit a rough patch, but we’re making the right moves and we’re going to get through it.”
In fall 2023, the district enacted a hiring freeze and spending freeze. Three district office employees retired and weren’t replaced. In order to fully meet the binding conditions from state education officials, the district is also looking into using loans from its own funds, from the county and as a last resort, from a bank, Fraser said in December.
Cuts in all areas
Fraser said in an email on Jan. 26 that the district will need to make cuts in all areas to regain stable financial footing, but wasn’t able to provide an exact percentage as it is a “moving target.”
There’s anxiety and mistrust in the community of the school board and district leadership. Parents and teachers have shown up to school board meetings and budget community meetings over the last several months to express concerns about how the district got to this place and a lack of transparency from the school board. Angst over rumors that the district would close Acme Elementary were shut down at a November school board meeting, but not until after dozens of people spoke in protest.
Mount Baker High School student Cailyn Jewell, 17, showed up at a Dec. 9 school board meeting to express her frustration.
“I feel like I don’t have a school board who chooses to show up for me,” she said. “I have yet to see any of you in my classes this year to experience the unmanageable overflow of students in history and math classes and kids sitting at TV trays and foldable chairs in the same classroom because the student-to-teacher ratios are reaching unsafe levels due to a lack of teachers.”
Former superintendent Mary Sewright also stepped down from her position in December, months ahead of a planned retirement. The school board hired former Sedro-Woolley School District superintendent Phil Brockman to fill her place.
Board President Russ Pfeiffer-Hoyt said it’s too soon to know what the impact of the cuts will be.
He added that the district is trying to improve transparency by frequently updating the district finance page on its website. The school board also hosted three public budget listening sessions last fall and set up a financial fact-finding committee including stakeholders across the district, led by Pfeiffer-Hoyt.
The process to develop next year’s budget, begins in January, Fraser said. He said they will create a budget committee and a process for community input.
Special election in February
Included in all this planning is an assumption that the two levies going to public vote on Feb. 13 will pass.
Pfeiffer-Hoyt said levies are essential to their operations. The state funding is “bare bones” he said, so they need the levies to pay for anything beyond that.
Mount Baker’s two levies are a replacement levy to fund educational programs and operations, and a renewal capital projects levy. The former will collect between $1.53 and $1.23 per $1,000 of assessed property value over the next four years, while the latter will collect 57 cents per $1,000 of assessed property value in 2025 and decrease by a few cents each year until 2030.
The educational programs and operations levy will fund nursing, mental health support, after-school activities and athletics; and the capital projects levy will fund school safety and security, facility needs, and playground and field upgrades.
Some community members aren’t confident the levies will pass given the lack of transparency and financial uncertainty.
“I am not sure with the current message we have out there with our community that that is a viable thing,” said Jenn Espeland, a parent of two Harmony Elementary School students and a member of the Harmony Elementary PTO, at the Dec. 14 school board meeting.
“[If the levies fail,] it is not our community’s fault, but they’re going to pay the price,” she said at the meeting. “It is not our staff’s fault, but they will pay the price. It is definitely not our children’s fault, but they’re going to pay the ultimate price.”
