School board passes 2025-26 Eagle County School District budget

The school board unanimously approved the Eagle County School District’s budget for the 2025-26 school year.

Sandy Farrell, the district’s outgoing chief operating officer, presented the final budget to the school board during its June 18 meeting.

Since the board looked at a preliminary version of next year’s budget during its May meeting, negotiations have concluded between the district and the Eagle County Education Association (teacher’s union), resulting in a finalized negotiated agreement that includes salaries, benefits and more.

The district plans to spend $240 million during the 2025-26 school year across its general fund, preschool fund, nutrition services fund, grant fund, student activity fund, transportation fund, bond fund, building fund, capital reserve fund, district housing fund and charter school fund.

The district’s general fund is its largest, with $104 million in planned expenditures, plus another $8.5 million in transfers out. The district expects to collect $109 million in revenue.

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One more year of deficit spending

During the 2025-26 school year, the district will deficit spend in its general fund by $3.5 million. The district has deficit spent for the last five years after inadvertently growing its general fund to a surplus of $19 million in the 2020-21 school year, far above the fund balance recommended by state statute.

“At $19.5 million we were way above that, and purposely began spending that down, and now we’re hitting where we need to adjust that and start building it back up,” Farrell said.

The $3.5 million deficit spending in the 2025-26 budget will leave the district an ending fund balance of $7.1 million. If the district continued to deficit spend at that rate for the following three years, it would be completely depleted by 2030. 

“When you look at the budget going forward you can see that we are deficit spending, but the intent is to continue to increase our fund balance to get it back up within the policy and maintain our financial stability,” Farrell said.

To level off its deficit spending, the district plans to reduce expenditures for 2026-27 by 1%, increase expenditures in 2027-28 by 2.5% and increase expenditures in 2028-29 by 3.5%.

Expenditures driven up by salaries and benefits

Within the general fund, salaries and benefits make up close to 80% of the district’s expenditures, with salaries costing nearly $60 million and benefits over $20 million.

The district will provide step and lane increases for all certified staff, along with 3.5% raises for support staff and 2.5% for administrative staff.

Next year, district will undergo a handful of required expenditure increases, including a 13% increase to its health insurance costs that total $1.75 million. “This increase is basically due to the utilization; it has been pretty heavily used over the last year,” Farrell said.

The district will also see significant expenditure increases in workers’ compensation ($170,000), property liability ($150,000), software maintenance ($138,000) and cost of living increases ($130,000).

More funding from state still not enough

The district will also experience some changes in funding beginning next school year. The School Finance Act, passed by the state legislature each year to fund education, increased the district’s funding by 2.19%, providing $1.6 million in new funding.

But the School Finance Act also included a new school funding formula that reduces the number of years included in enrollment averaging.

This reduces the district’s funded student count by 152 students. As a crucial piece to school funding is student enrollment, one of the challenges faced by rural districts is how to contend with similar fixed costs to larger districts without the same number of students to count for funding.

For rural school districts in Colorado, the reliance on state-provided funding creates unique challenges.

“(As) a school district, you have limited capability of increasing your revenue sources. Everything is controlled at the state for total program funding, and then at the local level by what they approve for mill levy overrides,” Farrell said.

In an effort to minimize its deficit spending, the district made more than $3.5 million in cuts to its budget for the 2025-26 school year. “We did do some significant decreases in our expenditures in order to meet the needs of the compensated agreement,” Farrell said.

The district adjusted school funded FTE to cut $2.1 million.

An additional $1.6 million in funding was cut from programs including professional development and overtime, engagement and belonging contracted services and nonprofit partnership supports. Green team stipends were eliminated after green teams saw mixed results across different schools.

The district formerly provided and paid for AmeriCorps employee housing in partnership with YouthPower365, which has agreed to take on housing for next year.

The district also cut its Mountain Strong Employee Assistance Program for staff, which provided an avenue for employees to receive free behavioral health sessions through Vail Health. “This is something that was a benefit for our staff,” Farrell said. “It actually had pretty heavy utilization because people had easier access to it. Due to the cost of it, it wasn’t as cost effective to continue that, and we encourage our employees to continue to work through their employee benefit plan that we have and get the supports that they need there.”

“(The programmatic cuts) will affect students and staff moving forward,” Farrell said.