2010-2011 Budget Planning: Approval of BAT Recommendation

In order for Stacy and Michael to build the budget for the coming year it is necessary for us to have direction from the board relative to closing the expected gap between revenue and current operations.   The Board has held two public hearings regarding the BAT proposal.   This will be an opportunity for the board to discuss and approve or redirect administration relative to this propsoal.

(Revised 4/15/10)


The Woodland Public School Board is seeking community input on a proposal to close the anticipated budget gap in the coming school year.  Opportunities for this input will occur on Monday, April 12, at Yale school, 7:00 pm, and Monday April 19, at the WHS/WMS Commons, also at 7:00 pm.

The state of Washington is anticipating a $2.7 Billion revenue shortfall for the 2010 fiscal year.   On Tuesday, April 13th the State Legislature adopted a final budget for the 2010-2011 school year.    The reductions to Woodland Public Schools are estimated to be about $316,000.   In addition to these cuts from the state we are anticipating a drop in student enrollment that will further reduce funding by an estimated $340,000.

In preparation for action on closing the anticipate Budget Gap, a Budget Advisory Team convened for three Wednesday evenings beginning February 24th.  There were 18 committee members and four staff who supported the team's work.

The team consisted of the following volunteers:

Name

Representing

Shari Conditt

WEA

Cindie Long

WEA

Dana Preston

SEIU

Heidi Morgan

SEIU

Chris Wiseman

Principals

Jody Brentin

Secretaries

Tina Cayton

School Board

Bill Woodard

School Board

Renee Fields

PTA

Elle Gillaspie

Tempo

Randy Sorensen

Booster

Brandi Kersey

ASB

Samantha Curtis

ASB

Janet Jermann

Parents

Jason Holdahl

Parents

Mariah Reese

Parents

Nancy Trevina

Parents

Debbie Deans

Community

 

The goal of the team was to formulate a recommendation to the School Board that will address the expected shortfall for the coming budget year.

In approaching this goal, we spent a session taking a "20,000 foot view" of the budget and determined to look at five options to close the budget gap.  These options included:  

1)     Staff reduction,

2)     Utilizing General Fund Unreserved Fund Balance,

3)     Utilizing State Forest money in the Capital Facilities Budget to pay for allowable expenses currently being supported in the General Fund.

4)     Targeted reductions,

5)     Across-the-board reductions.

On March 3rd, the BAT studied and discussed at length, four of these considerations.  The following details were provided in the BAT briefing packet:

Consideration # 1 - Staffing Reduction

Based on estimates of enrollment decline for the 2010-2011 school year it is anticipated that four teaching positions will automatically be eliminated.   Because of the reduced numbers of students, these reductions will have negligible impact on class sizes or offerings.    Reductions beyond those driven by enrollment decline may be considered.   It is estimated that each full-time teaching position eliminated will result in savings of about $75,000.   Reductions beyond the four enrollment-driven will result in increased class sizes and, at the secondary level, decreased course offerings.

Consideration #2 -District Fund Balance

The School District maintains a fund balance in the general fund.  The purpose of the fund balance is three-fold; (1) Cash Flow (2) Rainy Day Fund (3) Planned large expenses.  The board has a goal of maintaining a "Healthy" Fund Balance of between 4% and 6% of budgeted expenditures.

Cash Flow:  The income to the district is not consistent.  Amounts vary from month to month.  The end of November and the end of March are months when we have very little cash.  Without a fund balance we would not be able to pay payroll and all of our bills during that month.  The following table shows our recent cash balance on a monthly basis

Month

Cash Balance

February 09

$   560,293

March 09

$   656,694

April 09

$1,390,119

May 09

$1,285,049

June 09

$   769,880

July 09

$1,091,144

August 09

$1,316,000

September 09

$1,017,956

October 09

$1,366,162

November 09

$1,371,843

December 09

$1,386,211

January 10

$1,265,345

 

Rainy Day Fund:  The fund balance is essential to maintaining operations in the event of unexpected surprises or crisis.  Every year things happen that create unexpected impacts on the general fund budget.  Examples of this are:  unexpected high absenteeism on the part of staff due to severe illness, pregnancy, etc.; failures of equipment that require significant money to replace (boilers, furnaces, etc); unexpected significant dips in enrollment that sharply reduce revenues.

Planned Large Expenses:  Two years ago a reading adoption for grades 3-6 cost the school district $125,000.    A K-12 Math adoption could cost upwards of $200,000.   The fund balance can be reserved and built over time to plan for, and save for, these expenses over the span of multiple years.

Through conservative budgeting and expenditures over the course of the last few years, the General Fund Balance has grown significantly.  The following table shows the growth of the fund balance and the fund balance as a percentage of expenditures:

Year

Unreserved Fund Balance

Total Expenditures

Fund Balance

 as % of Exp.

2009-2010 (estimated)

 

$1,454,307

 

$19,943,275

 

7.29%

2008-2009

$1,198,823

$20,413,107

5.87%

2007-2008

$   860,620

$19,327,947

4.45%

2006-2007

$   805,289

$18,074,038

4.45%

2005-2006

$   796,138

$16,482,778

4.83%

 

It is expected, given the growth in fund balance this year, that if revenue and spending were to remain consistent, the fund balance would continue to grow to over 8% in 2010-2011.

Consideration #3-State Forest Funds

The District receives State Forest money from timber sales within the school district.   These funds are deposited by the Cowlitz County Treasurer in the Debt Service Fund.  The funds are then used to pay off voter approved bonded debt.   The result is a decrease in the taxes paid by local taxpayers for this debt.

Forest funds received by the district are limited, and under the current economy decreasing.   The table below shows collections over the last five years.

Year

State Forest Funds Received

State Forest Funds Available for use in CPF

2009-2010 (estimated)

$180,000

$   530,000

2008-2009

$178,011

$   821,122

2007-2008

$176,363

$   832,732

2006-2007

$131,079

$   816,439

2005-2006

$407,128

$1,312,050

 

Cowlitz County allows us to transfer the Forest Funds into the Capital Projects Fund for use within the rules of that fund.   Capital Projects Fund (CPF) rules are restrictive.  In recent years the state has allowed districts to utilize CPF funds for some limited technology expenses, such as purchase of new technology, associated software, and subscriptions. 

It is estimated that approximately $235,000 of expenditures currently paid on an annual basis from the General Fund (GF) could be paid using these State Forest revenues.

Consideration #4- Targeted Adjustments

Last year, the School Board approved $1.34 million in reductions.   These reductions were primarily targeted.   Most areas of the school district were studied and recommendations for reduction were largely made based on a few different considerations.  1) Perceptions of "value added" to the core mission of the district (e.g., reductions in Community Education Program vs. Reductions of Classroom teachers), and; 2) Prioritizing program for students in the classroom (e.g., reductions of nursing, ESD Support and print center over classroom teachers)

Many within the school district believe that because of the extensive and painful ‘pruning' that occurred last year, that further significant targeted adjustments in the coming year would be much more difficult.  (This includes both reductions of expenditures and increases to revenue.)

There are certainly targeted options available for further consideration. Perceptions of impact of these options vary depending on perspective.

Consideration #5- Across the Board Adjustments

Last year, the School Board approved $1.34 million in reductions.   In some cases the reductions were "across the board" without targeting specific areas.   The best example of this is the 20% reduction to all school and department discretionary budgets.    In a few cases, reductions were made that were a "hybrid."   For example, the technology support department was asked to reduce about 15% from their budget (in addition to the 20% reduction to all departments).  The departments came back with a proposal for reduction that creatively spared reductions to staff positions.

One consideration would be, to identify an amount that needs to be reduced from the budget (say 5%, for example) and ask each building, department, etc. to identify how this will be done, whether through the further reduction of discretionary spending, the reduction of staffing, or a combination of these.


The consensus of the team on March 3rd was that the district should consider utilizing a blend of approaches.  The team supported the use of a conservative amount of the fund balance and a more generous amount of forest funds was preferable to additional dramatic reductions to staffing, or program budgets. 

On March 10th the team utilized an electronic worksheet to make determinations of how cuts should be structured at various levels of funding reduction, ranging from $500,000 to $1,000,000, in $100,000 increments.   The team was given a floor parameter for certificated staffing.  I shared with the team that I would not recommend a budget in which staffing was significantly higher than would be justified by enrollment.  With enrollment declining, as it has been, the certificated reduction was a minimum of four, which can be achieved through attrition.   The team could, if they wished, recommend a higher reduction in certificated staff.

At the end of the 90 minute meeting the team achieved 100% agreement on structuring the solution to present to the board.   Because the State budget work has not been completed by this writing, the level of reductions to Woodland Public Schools is unknown.  The team has developed six options, in $100,000 increments.

BUDGET ADVISORY TEAM RECOMMENDATION  3/22/10  (TABLE A)

REDUCTION TARGET

$1,000,000

 $900,000

 $800,000

 $700,000

 $600,000

 $500,000

REDUCE STAFFING

 

 

 

 

 

 

Total FTE Reduction

4

4

4

4

4

4

Savings

 $300,000

 $300,000

 $300,000

 $300,000

 $300,000

 $300,000

 

 

 

 

 

 

 

REDUCE FUND BALANCE

 

 

 

 

 

 

Remaining Fund Balance %

5.75%

6.25%

6.75%

7.25%

7.75%

8.02%

Savings

 $454,307

 $354,307

 $254,307

 $154,307

 $54,307

 $-  

 

 

 

 

 

 

 

PAY TECH EXPENSES WITH STATE FOREST $

 

 

 

 

 

Amount of Tech to Pay

 $235,000

 $235,000

 $235,000

 $235,000

 $235,000

 $200,000

Savings

 $235,000

 $235,000

 $235,000

 $235,000

 $235,000

 $200,000

 

 

 

 

 

 

 

ADDITIONAL TARGETED CUTS

 

 

 

 

 

 

$ In Targeted Reductions

 $15,000

 $15,000

 $15,000

 $15,000

 $15,000

 $15,000

Savings

 $15,000

 $15,000

 $15,000

 $15,000

 $15,000

 $15,000

 

 

 

 

 

 

 

ADDITIONAL ACROSS THE BOARD CUTS

 

 

 

 

 

% Of Reductions

 

 

 

 

 

 

Savings

 $-  

 $-  

 $-  

 $-  

 $-  

 $-  

 

 

 

 

 

 

 

TOTAL SAVINGS

 $1,004,307

 $904,307

 $804,307

 $704,307

 $604,307

 $515,000

Difference from Target

 $(4,307)

 $(4,307)

 $(4,307)

 $(4,307)

 $(4,307)

 $(15,000)



Estimated 2010-2011 Funding Reductions  (TABLE B)

2010-2011 Funding

Reduction Estimate

Anticipated Reductions

Estimated Budget Impacts

Enrollment Decline

 $(340,000)

 $(340,000)

Minor Adjustments to Programs

 $(3,476)

 $(3,476)

Grade 4 Staffing Reduction

 $(70,001)

 $(70,001)

Elimination of LID *

 $(37,913)

 $-  

Increase to LEA

 $7,000

 $7,000

I-728 Elimination

 $(211,572)

 $(211,572)

 

 $(655,962)

 $(618,049)

* Elimination of LID reduces teacher pay by .55%.  It does not impact overall district budget


BAT Recommended Budget Reductions (TABLE C)

Recommended Budget Adjustment

Amount

Reduction of 4.0 FTE Staff

 $300,000

State Forest Transfer

 $235,000

Savings from WCC/YCC

 $15,000

Fund Balance Reduction

 $68,049

 

 $618,049