Archived Budget Updates 2008-2010
Note: you are viewing budget updates from between 2008-2010. For the newest updates visit http://www.orecity.k12.or.us/budget/updates
Budget Reduction Plan
On April 27th the school board approved the budget reductions displayed in the document below. These reductions are based on a state allocation to K-12 schools of $5.5 billion. (The allocation may come in higher or lower. At this time $5.5 billion is our best estimate. We don’t expect to have a funding level set by the legislature until late May or early June.) At $5.5billion we will need to reduce our expenditures by about $10 million.
Three months ago we expected a shortfall of about $6.5 million, but the economic outlook of our state and nation has continued to dim, and the corresponding revenue projections from the state have dropped dramatically. Making reductions of $10 million will leave few services or programs unscathed and will result in the elimination of nearly 100 licensed FTE and 35 classified FTE. (Keep in mind that since most classified positions are less than 8 hours, 35 FTE will likely translate into more than 35 positions.)
We are currently engaged in bargaining with OCEA and OSEA, and conferring with administrators. If contract concessions result from this bargaining, the number of layoffs will be reduced. The level of reduction will depend on the level of concessions.
The level of reduction reflected in this document is severe; it is devastating to the district, to students, and to individual employees. We can only hope that a recovering economy and contract concessions will improve this picture.
Compare Other District's Shortfall Estimates
Please check here for the latest district budget shortfall comparisons: Compare Other District's Shortfall Estimates.
Ending Fund Balance
People often wonder what an ending fund balance is and how much money should be maintained in it. An ending fund balance is essentially money that is unspent at the end of the school year. In some respects it can be considered the district’s savings account. There are at least four reasons for having a fund balance:
The most common reason is that a fund balance protects the district from being forced to borrow for cash flow needs. Borrowing can be costly in terms of both time and money because administrators must plow through multitudes of paperwork and attorney’s fees can mount up.
The second reason is that a fund balance provides a “rainy day” fund. This protects the district from catastrophic or near-catastrophic events that could cause fiscal disaster.
The third reason for maintaining a fund balance is uncertainty about state and federal funding. In Oregon school financing relies more heavily on state dollars and less on local tax collections. When state revenues fall short of projections, as in the current recession, a healthy ending fund balance can help minimize disruption to programs or to the school year.
The fourth reason for having a fund balance is that credit rating agencies view a moderately sized fund balance as an indicator of good money management. Many districts must construct or renovate facilities, and in most places, states require districts to pass bond issues to fund construction and renovation costs. A good credit rating leads to lower interest costs and greater market availability of bonds.
Most districts try to maintain an ending fund balance that is 5% to 10% of their total budget, and that is Oregon City’s policy. Our ending fund balance is currently at the bottom of that range.
Financial Update Presentation from March 9, 2009
2009-2010 Oregon City School District Budget Calendar
Meeting times: 6:00 PM – 9:00 PM
Budget Work Session Location: Downstairs Conference Room (1417 12th Street)
Budget Committee Meeting Location: Board Room (1306 12th Street)
- January 12, 2009: Appointment of budget committee members
- January 26, 2009: Budget Work Session meeting # 1.
- February 23, 2009: Budget Work Session meeting # 2.
- March 16, 2009: Budget Work Session meeting # 3
- March 30, 2009: Budget Work Session meeting #4
- April 20, 2009: Final work session on 2009-10 budget
- May 27, 2009: First Formal Budget Committee Meeting:
- Presentation of the 2009-10 Budget Message
- Distribution of the budget
- June 1, 2009: Budget Committee Meeting
- Public input, questions, comments, feedback and revisions.
- Possibility of budget approval
- June 8, 2009: Budget Committee Meeting (if needed, before regular Board meeting) o
- Public input, questions, comments, feedback and revisions. o
- Budget Approval
- June 22, 2009: Public Budget Hearing at 6:00 PM (1417 12th St) o
- Adopt Budget
- Make appropriations and levy the taxes
(Live broadcast on Community Access Channel 23 and playbacks on Channel 28.)
Public Forum Responses Coming Soon
The Oregon City School District would like to thank everyone who attended the Public Forums over the last couple of weeks. We appreciate your concerns, ideas, and requests for more detailed information. We're working to compile information that will respond to the major themes we heard at the forums, and will have that information posted here as soon as possible.
Obama Stimulus Package K-12 Related Items
You have likely been reading about the Obama Stimulus Package. We’ve done some preliminary analysis of the package and present that analysis and the package’s potential impact on OC School below. At present we are being very cautious about these moneys. They have yet to be approved by Congress, and we don’t know what strings might be attached to them. School Construction: $20 billion, including $14 billion for K-12 and $6 billion for higher education, for renovation and modernization, including technology upgrades and energy efficiency improvements. OC Benefit: We’re estimating that we might receive about $1.1 million. This money can likely offset budgeted maintenance expenses (about $200,000 per year) and allow us to move that money into other areas. Beyond that we should be able to do a lot of energy conservation work. Education Technology: $1 billion for 21st century classrooms, including computer and science labs and teacher technology training. OC Benefit: We’re not sure how this will be disbursed. If it’s on a formula basis we should receive about $90,000. IDEA Special Education: $13 billion for formula grants to increase the federal share of special education costs and prevent these mandatory costs from forcing states to cut other areas of education. OC Benefit: If this does what we think it says it does, we may receive about $900,000 each year that can be used to offset special education expenses. However, we need to wait and see if there are any strings attached. Title I Help for Disadvantaged Kids: $13 billion for grants to help disadvantaged kids in nearly every school district and more than half of all public schools reach high academic standards. OC Benefit: We may receive about $375,000 each year. This doesn’t appear to have any direct benefit to our general fund expenses, but boosting our Title I programs have a direct benefit to students in seven of our elementary schools.
Staff Budget Forum Schedule
January 20th, 4pm
Gardiner Middle School Cafeteria
January 21st, 4pm
Ogden Middle School Cafeteria
If you are interested in attending the community forums the schedule can be found above this posting.
Budget Reduction Proposals
Budget Update December 11, 2008
This note is intended to bring you up to speed with current happenings and to clarify some information that is circulating in some schools.
The district is currently in conversation with OCEA and OSEA leadership to see if we can find a solution to our $1.1 million shortfall. Reducing the number of work days is being considered but no decisions have been made. We have another meeting scheduled for tomorrow (Friday) morning with OCEA and next Tuesday with OSEA. We are also considering creating additional incentives to encourage folks near retirement to make that decision.
Also, as most of you are aware, we anticipate at least a $5 million shortfall in next year’s budget. That is a large hole to fill and will certainly mean that staff positions will be eliminated. However, whether or not we have to lay people off will depend on how many retirements or resignations we receive. At present, the number of positions and which positions will be cut are unknown. We simply haven’t gotten that specific yet.
Three Year Financial Projections
Note: Any financial projection is a work in-progress that changes as new information becomes available and is incorporated. This projection includes the Governor’s announced reduction for the 2008-09 fiscal year and the allocations in the Governor’s budget for the next biennium.
It is important to note that there will be additional changes around December 15 due to adjustments by the district and over the next several months as the legislature develops the final state budget for 2009-11.
Because there will be on-going changes and any one number or set of numbers may be affected with the next up date, it is important not to become “fixated” on a particular number included in this presentation or handout.
Increased fuel, energy and substitute costs from March through June of 2008 combined with lower than projected enrollment have created a General Fund budget shortfall of approximately $1.2 million.
The Governor’s response to the economic downturn resulted in a reduction of the State School Fund (SSF) which is projected to reduce revenue by over $1.0 million. This action increases the estimated shortfall to $2.2 million for the current year.
Initial and recently implemented expenditure adjustments have reduced this amount to approximately $1.1 million.
The recent actions, which were identified by the Superintendent’s Cabinet on Monday, involve $460,000 in budgeted expenditure reductions. These include:
- Limit travel to that covered by a grant or contractual agreements – estimated savings = $10,000.
- Reduce Building and Department allocations by an additional 10.0% - estimated savings = $150,000.
- Implement math adoption over two years and delay science adoption – estimated savings = $150,000.
- Development of an energy conservation plan by each building/department – estimated savings = $150,000.
The district will be working with OCEA and OSEA leadership to explore ways of reducing the additional $1.1 million shortfall.
2009-10 & 2010-11
The “three year financial projections” for the district indicate there will be significant shortfalls for the two years of the next biennium. The causes are as follows:
- Continued decline in enrollment in district operated schools of over 300 students resulting in a cumulative revenue loss of approximately $3.0 million.
- Increased operating costs for personnel, insurance, utilities, goods and services.
- A minimal increase state school support estimated in the current projection at 2.5% for each of the next two years.
Unfortunately, there are no remaining reserves of a sufficient ending fund balance (EFB) to make up the difference between operating costs and revenue. The reserves as well as a percentage of the EFB were and are being used to help offset the shortfall in the current budget. (By board policy, the EFB must be at least 5.0% of budgeted revenue. The current EFB is 4.4% of budgeted revenue.)
Currently, the projected shortfalls for each of the next two years as of this date are:
- 2009-10 = $6.3 to $6.8 million
- 2010-11 = $8.2 to $8.7 million
At this point, the district is in the process of developing three options to reduce the on-going costs for 2009-11. Our goal is to reduce enough on-going costs in the first year to cover the projected shortfall in the second year. The final amount of the reduction will depend on multiple factors and information that will become available over the next several months.
In addition to considering possible expenditure reductions, the district will also study opportunities for revenue enhancement including maintaining student enrollment, a local option levy, and an increase in facility use fees.
What can you do?
First, we need everyone’s best thinking in order to identify and implement all possible expenditure reductions from now through June 30, 2009. Every dollar we can save this year is one less dollar we will have to reduce next year.
Second, we need you to be a source of accurate information to share with your fellow employees, family members, friends, and neighbors.
Next, we need you to get involved with the district’s efforts to conserve energy, save water, and reduce garbage.
Last we need your ideas and input on possible expenditure reductions and/or revenue enhancements for the 2009-11 period.
Proposed Expenditure Reductions for 2008-09 - December 1, 2008
Increased fuel, energy and substitute costs from March through June of 2008 combined with lower than projected enrollment have created a General Fund budget shortfall of approximately $1.2 million. Implemented and estimated expenditure adjustments have reduced this amount to around $580,000.
The actions listed below have been identified as a means of offsetting the remaining shortfall. These proposed expenditure reductions will be reviewed at the December 11 meeting of the Leadership Team and may be modified as a result of your input.
1. Implement further expenditure reductions:
- Limit travel to that covered by a grant or contractual agreements – estimated savings = $10,000.
- Reduce Building and Department allocations by an additional 10.0% (This is a total of 15% for the year.) - estimated additional savings = $150,000.
- Implement math adoption over two years and delay science adoption – estimated savings = $150,000.
2. Identify other possible expenditure reductions:
- Explore ways to reduce the use of substitute including the review staff development activities that require use of non-grant funded subs.
- Carefully evaluate any opening to determine if necessary to fill.
3. Develop an energy conservation plan for your building/department in cooperation with your head custodian using a checklist of energy savings opportunities that will be provided tomorrow. Our goal is $150,000 in savings in the next seven months.
4. Brainstorm actions to increase lunch participation in order to meet the “meals served” requirement in the nutrition services contract.
The Governor’s announced decision to reduce the State School Fund (SSF) for the current year adds $1.0 million to the $580,000 shortfall. We will be working with OCEA and OSEA leadership to explore ways of reducing the additional $1.0 million shortfall.
We need everyone’s best thinking in order to identify and implement all possible expenditure reductions this year given the projected shortfall of around $5.0 million for 2009-10.
Excerpt from memo from Confederation of Oregon School Administrators – November 19, 2008
The message below was sent from COSA. The bottom line here is that the Oregon City School District can expect about a $1 million reduction in this year’s revenues.
State revenue is expected to decline by $165.9 million in the 2007-09 (current) biennium and $718.4 million in the 2009-11 biennium, compared to the September forecast. This information comes from the December 2008 Economic and Revenue Forecast presented to the House and Senate Revenue Committees by the Office of Economic Analysis this morning. The 2007-09 decline results in an ending fund balance for the state of negative $142.1 million. Because Oregon is required to have a balanced budget, 2008-09 reductions in revenue for schools and other sectors of state government are already in the works.
One place that little revenue reduction is planned is in the School Improvement Fund. COSA, along with education partners OEA, OSBA and ODE, have been working with the governor’s office since last week’s announcement of the governor’s request that ODE delay/withhold distribution of the School Improvement Fund. As you can see in the attached letter, the governor is now asking that $125 million of the $130 million SIF be released on November 24. However, the letter also requests that ODE “reduce the monthly payments to school districts in the months of January through May 2009.” This is part of the governor’s use of his “allotment authority” to do across-the-board reductions to balance the state budget. K-12’s share of those across-the-board-cuts is about $75 million. Combined with the $5 million withheld from the SIF, the total of $80 million represents a revenue reduction of about $120 per student this year. We will continue to work with our education partners and the governor’s office, and we will update you as developments occur and additional information becomes available.
Information from Governor Kulongoski – November 18, 2008
On Saturday November 15th, Governor Kulongoski spoke at the Oregon School Boards Association Annual Convention. He did not mince words. The following were his messages (after he told us that education was his top priority).
- The economic issues are very profound. The November revenue forecast is expected to be down several hundred million dollars.
- The revenue forecast we receive on Wednesday (November 19th) will very likely be the high water mark. He expects that future forecasts will be down further. The recession will extend well into 2009, if not beyond.
- The Governor will resist using the rainy day fund, or the school stability fund, to shore up the 2008-09 budget, or in developing the 2009-11 budget. He wants the rainy day funds to be in place for the legislature to use during the 2009-11 biennium. Obviously, he believes the worst is yet to come.
- School Boards should brace their school districts for less money this year. Conserve all the money possible between now and the end of the year. Take whatever steps are necessary to protect this school year.
- The Governor has directed State Superintendent, Susan Castillo, to withhold distribution of School Improvement Funds (SIF) until there is a clearer picture of the state’s current economic condition. (In Oregon City the SIF makes up $1.8 million of the 2008-09 budget.)
- The Governor will recommend to the State Board of Education that they suspend the implementation of the new graduation requirements for the foreseeable future.
- The Governor will issue his budget on December 1st. By law, his budget has to be balanced. We would assume, based on his previous comments, that it will be difficult to fund the budget he presents because the revenue forecasts will continue to decrease.
Are staff reductions in the Oregon City School District imminent? – November 18, 2008
At present there are no plans to lay off any staff during this school year.
If School Improvement Funds (SIF) (see Kulongoski info above) are cut we will have to make some difficult decisions. This year we are set to receive $1.8 million in SIF funds. That money is integral to our district operations; its loss would cause substantial disruption to district programs. If this loss in revenue should occur we will work closely with OSEA and OCEA to craft a spending plan that will be the least disruptive to student learning.
Looking to next year, this January we expect to present a budget plan to the school board that may reflect a reduction in expenditures of up to $5 million. A reduction of this magnitude will likely result in the elimination of many positions within the district. However, there is no way to know if the elimination of positions will result in layoffs; that will depend on the number of retirements and resignations that occur prior to next school year.
We realize that this information may do little to reduce anxiety. However, we feel it is important that you have good, current information. To that end, please continue to check out the “Financial Update” section on our website. Also, we will remain in communications with OSEA and OCEA leadership regarding our financial situation. If you have questions, your association leaders, as well as your immediate supervisor, should be sources of reliable information.
Oregon City School District is an equal opportunity educator and employer.