PORT ANGELES — The Port Angeles School District board is faced with tackling a budget shortfall for the second year in a row.
While the gap is smaller than last year’s and won’t require job cuts, board members did not find easy solutions to closing it during a two-hour special budget development meeting Tuesday.
Kiera Acker, the school district’s director of business and operations, said the district needs to both balance the 2024-2025 budget, which has a $554,950 deficit, and rebuild its reserves.
That could be accomplished through retirement and resignations ($950,000), filling teaching vacancies with new hires who would enter at a lower pay scale ($350,000) and ending a science curriculum contract ($50,000), she said.
Superintendent Marty Brewer said there would be no reduction in force (RIF), which occurred last year when the district cut $5,000,243 — about 9 percent — in expenses to balance its budget.
The district will nonetheless need to rebalance its staffing to reflect lost enrollment.
“We will be looking to balance the budget through attrition,” he said. “It will not be targeting positions.”
Cuts in programs could still occur as the budget is refined, Brewer said.
The proposed cost savings would balance the 2024-2025 budget, which has projected revenues of $60,309,291 and expenses of $59,414,241, while leaving $895,050 to restore the fund balance.
Acker said the district had to rely on its reserves over the course of the school year to make up for losses due to decreased enrollment ($610,000) and to pay for union-negotiated wage increases ($313,000). The spending has dropped its reserves from $4,438,857 to a projected $3,515,802 by August.
“The reason that fund balance is so important is that, if we don’t take any steps, we’re going to have literally $100,000 in the bank (next year), and we don’t want to be there,” Acker said. “That’s why it’s so important to make this decision now, so that we can add back that balance and those reserves so we can pay our bills.”
Employee salaries and benefits alone cost the district about $4.2 million every month, she said.
Board vice president Sandy Long said she wants to see raises for principals and administrators in the budget.
“I don’t know how you’re going to do it, but I will not be happy,” Long said. “I’m embarrassed that we cannot reward those who come to work every day of the year — not 184 days. I don’t think it’s fair and I don’t think it’s right.”
Estimated revenues next year would come from the state and federal government ($53,609,291), educational programs and operations levy funds ($5,600,000), and grants and local funds like timber dollars ($1,100,000).
The 2023 and 2024 legislative sessions came through with increased funding that would help ease, but not solve, the district’s rocky financial position. These include pay increases for paraeducators and office professionals ($70,661), increased funding for materials, supplies and operating costs like technology and utilities ($122,574), a 3.7 percent wage adjustment intended to keep pace with inflation and funded at the level the state considers an adequate number teachers and other instructional employees ($878,322), and a special education funding increase from 15 percent to 16 percent ($1,009,957).
Even though board members believed they had made a conservative enrollment estimate last year, there ended up being 41 fewer students than they projected, which contributed to the budget shortfall. They discussed staying with the estimated number of 3,315 students used to develop the planning budget and ultimately decided decrease it to 3,305. It was unanimously approved.
The planning budget will be adjusted to reflect the new enrollment number, to incorporate changes suggested by the board and reflect departmental input.
Complicating the district’s budget process is a compressed timeline. Planning that usually ramps up in early March was delayed this year by bargaining between the district and paraeducators that extended through spring break and ended with a five-day strike during the second week of April.
Acker said a revised budget would not be presented at the board’s next regular meeting Thursday, but they would be see an update before all preliminary budgets are due to the Educational Service District by the July 10 deadline. There will be a public budget hearing the first week of August.
The board must approve a balanced budget by Aug. 31.
Balanced budget required
School districts are required to submit a balanced budget to the state annually.
If a district ends the fiscal year with a negative balance, it enters into what is called “binding conditions” with the Office of the Superintendent for Public Instruction, and the Educational Service District oversees its finances for one to two years.
Binding conditions enable school districts to access funds to help them become solvent but cede local power to an outside entity.
Five school districts are currently on binding conditions: La Conner, Marysville, Mount Baker, Prescott and Tukwila.
________
Reporter Paula Hunt can be reached by email at paula.hunt@peninsuladailynews.com.