Budget Process 2010
Last Updated: 5/13/10
Q. What is the impact of the state budget on the district?
A. The state Legislature completed its work on the budget on April 12, 2010. While the district will receive less state funding again this year, it is not as bad as it could have been given the state’s current economic situation. We planned for worst-case scenario, which thankfully, we will not have to face this time.
The overall impact on our district is a loss of approximately $1.6 million in state funding between 2009-10 and 2010-11.
Q: How will class size be affected?
A: The learning experience for all children is a district priority. Throughout this economic recession, we have been able to keep regular classroom staffing ratios at pre-recession levels and will continue to do so for next year.
The $1.6 million reduction for the district includes the elimination of all funding for the voter-approved Initiative 728 for class size reduction. However, we anticipated this loss and developed a multi-year plan in spring 2009 to spread our I-728 funds over this current year and next year. Although I-728 has been completely eliminated rather than reduced, we will have enough remaining I-728 funds for the same staffing for class size reduction, professional development and extended learning as we have this year. I-728 funds can only be used in these three areas. We currently fund 12 full-time equivalent teaching positions using I-728 funds. It is important to note that unless the Legislature restores some/all funding for I-728 for the 2011-12 school year, we will be forced to make drastic reductions to our staffing, impacting class size and extended learning activities during the 2011-12 school year.
The state also reduced K-4 class size enhancement funds that we receive for grade four, representing a loss of funding of 4.7 full-time equivalent (FTE) teaching positions. However, our district will not reduce staffing in this area in order to maintain our class size ratios at their current level; instead, we will fund these positions by implementing some items in the Adopted Budget Savings Plan and by using some reserves.
Q: What is the next step in the process?
A: By implementing some items in Adopted Budget Savings Plan, we will be able to maintain class size ratios, make programmatic improvements as needed, and help offset possible additional losses of state funding in spring 2011. District staff have been moving forward with implementation of an aligned elementary school schedule for primary and intermediate grades, the full-day every-other-day schedule for regular kindergarten, the new early release schedule with state waiver days, and the move of the GRADS program as per Board action on Feb. 25. The complete implementation plan is posted at right to indicate which of the remaining budget savings items in the plan will be implemented or not implemented.
Q: Why is the elementary strings program being implemented as part of the Budget Savings Plan?
A: This year, we have heard from many staff and parents about the loss of the elementary strings program. Elementary strings is in addition to regular music instruction that students have during the school day. The district values music education as part of the core curriculum for every child. Although we are not required to provide elementary music, we have prioritized this over other needs that are also important to the community, such as visual arts, theatre and world language. For the 2010-11 school year, the music educational experience will include grades K-2. With the new elementary school schedule, which saves transportation and staffing costs, approximately 2,100 students in grades K-2 will now receive core music instruction, in addition to the 2,200 students in grades 3-5 who will still receive some core music instruction from specialists. Currently, 1.4 full-time equivalent staff (FTE) rotate schools to teach strings, so some students receive strings instead of other instruction during the school day and other students receive strings instruction before or after school without having to be pulled out of class. The cost to the district is approximately $400 per student for those currently in the program. This program has offered an incredible experience for those children who are able to participate, but it is not sustainable in this economic climate and, it is not equitable in its current structure.
We are extremely supportive of wanting to work with parents or interested community members – as we did with the conservation site program for all third graders – to establish a way to offer a music enrichment program for elementary students next school year. Interested parents/community members should contact the Deputy Superintendent at 676-6512. We are already exploring with our music staff the potential of offering instrumental music as the fifth grade core music curriculum in the future for all 839 district fifth graders, possibly by working with the Bellingham Public School Foundation and other partners to provide access to instruments.
Q: What are the reductions in the areas of elementary school librarians and elementary support staff?
A: Support in these areas for students at the elementary schools is a priority. Therefore, the amount of reduction was reduced from $320,875 to $56,625 across the elementary level throughout the district. For the 2010-11 school year, all elementary schools will have a minimum of a half-time library media specialist position to provide library, technology and literacy support. Schools with projected enrollment of 300 students or more will receive an additional discretionary 1.0 FTE staff position and schools with less than 300 students will receive an additional discretionary .75 FTE staff position to provide student services as determined by the principal in each school’s greatest area(s) of need that may include library support beyond half-time, literacy support, elementary support specialist (ESS) services, world language, elementary strings or program coordination. Principals are currently working on the schedule and levels of support services for each elementary school.
Q: Why have some staff received notices about their employment being at risk for next year?
A: We planned for worst-case scenario, which thankfully, we will not have to face this time. State law and the collective bargaining agreement require us to notify certificated staff who may not have job positions for the following year by May 15 (as defined by state law RCW 28A.405.210) or the district is legally obligated to employ them for the following year. This is why we must begin our budget and staffing process months in advance. Before the Legislature completed its work on April 12, we sent 120 initial notices to our staff based upon our Adopted Budget Savings Plan. As of this week, we have been able to continue contracts for all except about a dozen staff members. Those receiving notices will be given first consideration for rehiring in positions with the appropriate certifications. We also still have retirements coming in and are working to find positions for our staff. We recognize the financial, personal and emotional impact this has on our dedicated staff, and we are working to support them through these hard times in a variety of ways.
Our Philosophy and Criteria for Making Budget Decisions
The School Board and district will use the following philosophy and criteria to make budget savings decisions that:
- Do not violate the law or negotiated agreements;
- Protect the safety of students, staff and community;
- Weigh the impact on our primary mission of teaching and learning;
- Take stakeholder input into account;
- Align with actions of the state Legislature;
- Identify strategic savings rather than across-the-board reductions;
- Promote additional operational efficiencies;
- Consider nonemployee-related expenses before personnel reductions;
- Consider reducing local subsidies of state and federal categorical programs; and
- Continue to work with our community to pursue alternative or additional revenue sources.
Our Philosophy and Criteria for Restoring Programs, Staffing or Items Previously Reduced or Eliminated
Although there may be additional state and/or federal revenue reductions in 2010–11, we want to be prepared to restore programs, staffing or items that were previously reduced or eliminated during last year’s budget process, if funding is available or in exchange for implementing other cost-savings. In these cases, the School Board and district will use the following philosophy and criteria for making decisions to restore programs, staffing or items — if funding is available or in exchange for implementing other cost-savings — to balance the 2010–11 budget. We will evaluate programs, staffing or items for restoration based upon the following philosophy and criteria instead of automatic restoration or restoring in reverse numerical order. We also will:
- Deliver on previous commitments made for restoration in the School Board's Adopted Budget Saving Plan, which allowed the district to have a balanced budget;
- Be strategic and intentional in the restoration of programs, staffing or items based upon their value-added to achieving the vision, goals and target objectives of the District Strategic Plan and School Strategic Plans;
- Prioritize restoration of programs, staffing or items based upon their value-added to implementing the district graduation’s requirements and preparing K–12 students to meet those requirements;
- Continue to promote operational efficiencies; and
- Ensure compliance with state and federal reform and accountability requirements including the Elementary and Secondary Education Act, currently known as No Child Left Behind (proficiency and readiness to learn for all students and targeted support for students not yet at standard, low-income, special education and English Language Learners).
Why does Bellingham have to reduce its budget again?
Bellingham must reduce its operating budget for the 2009–10 and 2010–11 school years due to a combination of rising costs, years of inadequate state funding, a multi-billion dollar state budget deficit, and rigid state finance law that allows little flexibility in determining how to fund students’ greatest needs. The district receives 64 percent of its funding from the state based on student enrollment, 20 percent from local operations levy dollars, 12 percent from the federal government and 4 percent from other sources such as donations and investment earnings. The district's overall student enrollment has remained steady without significant growth or decline for the last several years—despite pockets of growth in certain areas of our community—resulting in inadequate revenue to help offset rising costs. For a number of years, school districts throughout the state, including Bellingham, have been using local levy dollars and reserves to fill gaps in the state's funding of basic education.
What is the current financial situation in the district?
Bellingham is widely known as a fiscally responsible and prudent district that is constantly seeking opportunities to improve the efficiency of its operations. Our 2009–10 operating budget was balanced with the help of the 2009–10 Budget Savings Plan. We do not anticipate reductions for the remainder of this school year, other than ongoing operational efficiencies. This could change if the state unexpectedly reduces our current year's revenue. About 83 percent of our school district’s budget is spent on people and personnel-related costs and 17 percent on nonemployee costs such as fuel, utilities, supplies, insurance, etc. We spend most of our resources on teaching and learning–72 percent of our total operating budget, which is above the state average. We currently spend 16 percent on instructional and related support services and 12 percent on administration, which is below the state average.
How much did the district receive in federal stimulus funds and how is this money being spent?
The American Recovery and Re-Investment Act (AARA) was signed into law by President Obama in February 2009. This provided additional resources at the state level through a special fund called the State Fiscal Stabilization Fund. Washington state used this money to offset a $9 billion dollar shortfall in anticipated state revenue for the 2009–10 biennium. The ARRA funds provided money directly to Bellingham School District in four areas: Special Education, $2.1 million; Title funding, $1.2 million; funding for homeless students, $29,572 in 2009-10; and technology, $42,670 in 2009-10. The largest of these new ARRA funds received was for Special Education and Title with the requirement that the funds be used in a way that is consistent with the current statutory and regulatory requirements. This meant that these funds could not be used to offset the Bellingham School District budget shortfall.
How are district decisions impacted by state decisions?
The district depends on the state for the majority of its revenue. Because the state designates a certain amount of funding for districts to use in specific areas for defined purposes only, we must align our district reductions with corresponding state reductions.
STAFF
How will personnel reductions be decided and will seniority be a factor?
Seniority of staff, the Reduction In Force (RIF) process for staff with continuing contracts and the nonrenewal of contract process for provisional (first and second year) staff are outlined in the Collective Bargaining Agreements. Specific program funding changes will also impact Reduction In Force.
If a staff member’s job is eliminated, how will the staff member know what open positions are available in the district?
We will follow procedures in the Collective Bargaining Agreements for Reduction In Force (RIF) recall and job posting requirements.
Is the district considering buy-outs or early retirement options?
These are prohibited by state law, unless changed by the state.
Will the district recruit and hire for open positions for the 2010–11 school year?
The district may need to recruit for and post jobs, depending on the type of open positions available and the need to fill them.
What will happen with health care benefits in the future?
Funding comes from the state and benefits are part of the Collective Bargaining Agreements. Premiums change annually depending on state funding, insurance company costs, pooling and employees' selections of plans.
Has the district considered moving to a four-day work week?
Not at this time. State law requires a 180-day school year and does not currently allow, except as noted in the adopted Budget Savings Plan for Central Services during the summer, districts to add minutes onto the school day to flex schedules. Some support staff currently work a four-day work week during nonstudent times.
Will job sharing opportunities continue to be explored?
Job sharing is outlined in the Collective Bargaining Agreements.
Does job sharing cost the district more?
Potentially yes, depending on salaries, benefits, professional development allocations, the job share plan and schedule.
How is the cost-of-living adjustment for staff funded and will that change?
State law requires school districts to implement state-mandated Cost of Living Adjustments (COLA) to all school employees, but the state doesn't provide full funding to pay for these adjustments. Therefore, every time the state stipulates a cost-of-living adjustment, the district must make up the difference between the amount the state provides and what we actually pay our staff. That difference is made up through local levy dollars and reserves.
How will these budget reductions affect my child at school?
The safety and health of children will be paramount. The philosophy and criteria previously defined in this document will be used to prioritize tough choices and make budget decisions that affect student programs.
Have field trips and travel been reduced?
Yes, as outlined in last year's adopted Budget Savings Plan.
Will the current financial crisis across the nation affect the district’s ability to sell bonds for new schools and construction?
The district's recent experience in the bond market has been very positive. We were able to sell bonds at a lower rate than anticipated and saved our taxpayers a considerable amount of money.
Why is the district continuing to spend money on seismic retrofitting and building schools while there is a budget shortfall?
These projects are important for the safety of students and staff and for the long-term preservation of our facilities and preventative maintenance. Funding for school construction, facility improvements and property purchases comes from a capital projects fund. This is separate from the district's general fund and cannot be used for day-to-day operations or to address budget shortfalls. Funding for staffing to operate a school comes from the district's general fund.
How are local levy dollars used now?
Bellingham initially used local levy dollars to enhance programs and services beyond what is funded by the state, but in recent years has been using this revenue source to fill the gap between state funding and actual operational costs to maintain programs.
Can technology levy funds be used for other purposes?
No. State law prohibits this. The state also does not provide general funds for technology.
Why can’t Bellingham just raise more money through a local levy?
While the voters who approve our levies are very generous, school districts are limited by state law in how much they can raise through local levies. In addition, since our current four-year levy runs through 2012, we cannot revise our levy until at least 2013, and then only after voter approval. Our levies are based upon a set total dollar amount, not a percentage of property value. If property values increase more than we estimated when voters approved the latest four-year levy rate in 2008, the tax rate is lowered so we only collect the actual dollar amount approved by voters.
Why can’t the district use proceeds from the sale of property or bonds to balance the budget?
Money from the sale of property goes into the capital projects fund, which also provides for school construction and renovations. The money that we use for capital improvements comes from the sale of bonds, which voters most recently approved in 2006. The capital projects fund cannot be used to balance the general fund.
Is this the first year that Bellingham has had to reduce its general fund budget?
No. In 2005–06, the district implemented a budget savings plan. In that plan, we implemented additional cost-saving measures and operational efficiencies, and reduced program and staffing budgets. In 2008–09, the School Board adopted a Budget Savings Plan following a process for stakeholder input.
What is our long-term budget strategy?
We strive to align the allocation of resources to students' greatest needs and provide high quality instruction while maintaining adequate reserves.
Why are reserves important and how much does Bellingham have in reserves?
Reserves are part of the district's general fund budget. The district cannot decrease its reserves below 3 percent and still operate in a financially responsible manner. To compensate for economic uncertainty, School Board policy 7130 sets the minimum for reserves at 3 percent with a recommended range of 3 to 5 percent. Currently, district reserves are within this 3 to 5 percent range.
Although the state economy is on track to rebound slowly, the Office of Superintendent of Public Instruction (OSPI) indicated projected funding for K-12 education for 2011-12 will be bleak. This is due to a number of issues including the need to replace one-time federal stimulus funds and other one-time funding totaling about $3 billion that will not be available in the next biennium, paying for increases in pension contributions, increased 2012-13 funding required by Senate Bill 2776 and more. Therefore, we plan to keep our reserves on the upper end of this range in order to have some of this funding to use in the event that the state cannot restore or replace funding that was reduced or eliminated during the past two years such as Initiative 728, K-4 class size enhancement, Cost of Living Allowance (COLA) increases, and our own district obligations for increased pension contribution rates, COLA, etc.
Adequate reserves are also critical for meeting cash flow needs such as monthly payroll and meeting other ongoing financial obligations. The district does not receive its funding from the state on a payment schedule that aligns with its expenditures. Therefore, the district often relies on using reserves to pay bills until that state funding is available. Reserves are also important to maintain programs during times of revenue shortfalls, and to cover unanticipated expenses or emergencies. Reserves also impact the district's credit rating and ability to borrow funds for bonds for construction projects at a low interest rate, which saves taxpayers' dollars. For the last several years, the district has been spending down its reserves to offset rising costs and meet financial obligations.
Will we experience state budget reductions annually?
The state Legislature adopts a budget in two-year cycles. Continuing reductions beyond 2011 will depend on the state's economic situation.
Does Bellingham have any mechanisms for raising revenue through grants and donations?
Yes. The Bellingham Public School Foundation exists to raise money for Bellingham schools. As a separate nonprofit organization, it asks individuals and corporations for donations, which are used to fund classroom grants for teachers and other needs in the district.
School parent organizations (PTAs, PTOs) and high school Associated Student Bodies (ASB) also generously raise money for their schools. Tuition and/or fees are charged for some programs. The district is always open to individuals and corporations who may want to help. Those interested in donating time or money may contact their neighborhood school.
