Dear VPS community,
We want to share an important update about Vancouver Public Schools’ finances and our work to return the district to long-term financial stability.
Earlier this year, we shared that VPS expected to end the 2025-26 school year with a negative fund balance. Put simply, we have used our savings and need to borrow against future state funding to pay our bills. Ending the year with a negative fund balance requires a school district to enter a state financial oversight process called Binding Conditions.
Rather than wait for the state to require action, VPS asked the Office of Superintendent of Public Instruction (OSPI) to begin this process so we could start working with OSPI and Educational Service District 112 (ESD 112) on solutions.
OSPI and ESD 112 have now completed their first review and sent us a letter formally placing VPS under Binding Conditions. The letter outlines the financial requirements we must meet and sets a goal for VPS to return to a healthy financial position within three school years.
What does this mean?
Binding Conditions give VPS a structured plan for getting our finances back on track. They also allow us to continue operating and, when needed, use future state funding to help pay our current bills.
Binding conditions do not mean VPS is bankrupt or that the state is taking over our schools. Our elected Board of Directors will continue to govern VPS, and district leaders will continue to make decisions about our schools, programs, and services. However, OSPI and ESD 112 will now provide more oversight and closely review our finances and operations.
During this time, we must rebuild our savings to 5% of our annual spending. Based on our current budget, that means building our fund balance to at least approximately $21 million. We also need to get to a point where we have enough cash available to pay our bills without borrowing. OSPI's requirements call for VPS to restore its fund balance within the next three school years.
We will provide regular financial reports to OSPI and ESD 112 and meet with them monthly beginning this Fall. Together, we will review our spending and revenue, enrollment, staffing, available cash, and progress toward our goals. We will also share these financial reports with our VPS Board and on our budget webpages.
By December 2026, our Board must formally adopt a financial plan that explains the specific steps we will take to meet these goals.
What happens next?
Our next step is to build that plan.
Over the coming months, we will work with our labor partners, staff, families and community, along with OSPI and ESD 112, to decide what actions we need to take. We will also identify clear milestones so we – and our community – can see whether we are making enough progress.
Our Mapping Our Future: Understanding and Insight Sessions are one of the first opportunities for our community to be part of this work. We hope families, staff, students and community members will join us to learn more about our finances and student academic performance, ask questions, and share their ideas as we map the path ahead together.
Keeping our community informed
Our final financial results for 2025-26 will be available in November. Those numbers will give us a clearer picture of where we are starting and will likely be our next major update on our progress.
In the meantime, please visit our Binding Conditions webpage to learn more. The full letter from OSPI is posted there, and we will continue to add information as we develop our plan and identify milestones for measuring our progress.
Returning VPS to financial stability will take time. It will require careful spending, clear priorities, and difficult decisions. Throughout this work, we will stay focused on our two priorities:
improving academic outcomes for students
returning VPS to financial stability.
We hope you will continue to learn alongside us, ask questions, and take part in opportunities to help shape our path forward.
Thank you for your continued partnership with Vancouver Public Schools.