The School Committee received the district’s fiscal‑year‑26 first quarter financial status report and discussed special education costs, transportation encumbrances and federal grant awards.

“At the end of quarter 1, General Fund's available budget was 3,366,572,” Jenny Lin, director of finance, said during her presentation. Lin said the quarter‑one balance represents about 95% of the district’s total projected general‑fund balance when encumbrances are included, noting that most salary lines are already reserved in the system early in the year.

Lin highlighted several points of potential pressure and offset:

- Special‑education contracted services: the special‑education department projected an overage of about $311,000 in contracted medical/therapeutic services. Part of the driver is two students in the Compass classroom who returned from out‑of‑district placements and require nursing supports; the district said hiring nurses has been difficult and temporary outside services are more expensive.
- Out‑of‑district tuition: the general fund showed a deficit of approximately $1,455,000 for out‑of‑district tuition (private school and collaborative placements). Lin noted the district typically offsets some of that with IDEA grant 240 funds (approximately $820,000) and circuit‑breaker reimbursements.
- Special‑education transportation: FY26 encumbrances for special‑education transportation totaled about $1.9 million (invoices for some prior periods were only recently received), and regular yellow‑bus contracts carry daily rates that increased roughly 5 percent over the prior year.
- Facilities/heating: facility encumbrances were elevated as a precaution after recent heating‑cost increases; facilities had encumbered about $1.1 million for the year to date.

Lin said the district received a larger circuit‑breaker reimbursement for FY26 — the presentation stated a preliminary FY26 circuit‑breaker total of $4,024,000, about $725,000 more than FY25 — and that the FY25 reimbursement had been $3,298,000 (which included a late $229,000 addition). The district also noted that DESE conducted a circuit‑breaker audit and that any audit findings could affect late‑year accounting; the timing of final audit results was uncertain.

Lin reported federal entitlement grants approved for FY26, including IDEA 240 (approximately $1,099,000) and Title II/III allocations for staff training and ELL supports. The director also reviewed revolving‑fund activity (full‑service program, early‑arrival/fee options and curricular fees) and noted the special‑education reserve fund balance of $342,000 after a prior $400,000 drawdown.

Committee members asked whether contracted‑services overages are caused by higher tuition, increased placements or higher support levels; staff said it is a combination and that some cost increases are due to higher support needs even when placement does not change. Members discussed whether adding in‑district capacity or additional psychologists/nurses would be cost‑effective compared with contracting services; staff said these staffing decisions are part of FY27 budget planning.

The committee asked staff to continue monitoring contracted services, transportation invoices and the DESE audit so that results can be incorporated into FY27 budget discussions.