Last Updated: 11/2/2009
Based upon the most recent state economic forecast for next school year, the Bellingham School District currently anticipates the need for continued budget reductions and cost-savings strategies for 2010–11.
We know that our funding situation will not improve enough to abandon the need for a Budget Savings Plan. We will not have a clearer picture of state funding until the Governor's budget is released in January. However, in response to feedback from our stakeholders, we plan to be prepared and begin the process to develop a Budget Savings Plan in November 2009.
The state has a multi-billion dollar revenue shortfall for this two-year budget cycle. As a result, the state budget has provided fewer funds for public school districts. This results in fewer funds being available to support and maintain our programs for the 2009–10 and 2010–11 school years. This also means that we need to reduce our expenses. Our strategic plan, which identifies college ready, career ready and citizenship ready, provides the learning targets for every child in the Bellingham Public Schools. The strategic plan shapes the philosophy and criteria for our budget savings plan.
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. 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 measures—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 comitments made for restoration in the School Board's previously adopted Budget Saving Plan, which allowed the district to have a balanced budget (e.g. reopening Lowell in fall 2010).
- 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.
- 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. We also may need to reduce other areas of out budget to provide capacity for restoration of some previously reduced or eliminated programs, staffing or items. The extent of the district’s reductions for 2009–10 and 2010–11 will change if the state budget deficit continues to grow. 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 been flat 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 0f 2009. This Act provided additional resources at the State level through a special fund called the State Stabilization Fund. The State of Washington used this money to offset a $9 billion dollar shortfall in anticipated state revenue for the 2009–2010 biennium. The ARRA funds also provided money directly to Bellingham School District in four areas. The areas included Special Education ($___), Title Funding($___), Funding for Homeless students($___) and Technology($___). The largest of these new ARRA funds received was for Special Education and Title with the requirement that the funds had to 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. The one exception was a that 50% of the new IDEA allocation could be used to reduce the maintenance of effort that Bellingham Public Schools was currently using local levy dollars in Special Education programs above the Federal and State funding allocation. This reduction of the maintenance of effort returned $___ of local levy dollars back to the general fund.
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 reductions accordingly.
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.
PROGRAMS AND CLASS SIZE
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.
What is the status of class size with the significant Legislative reductions in Initiative 728?
Based upon available state funding, the School Board adopted baseline staffing ratios of 24.17 for K-4, 27.11 for grade 5, 28.4 for middle school and 28.74 for high school. In the past, the district received enough Initiative 728 funding for an additional 29 staff positions to further reduce class size. In 2009–10, with reduced I-728 funding, the district is funding 11 staff positions to further reduce class size at all levels.
These ratios represent classroom-based certificated staff positions and are allocated to each school to build a master schedule and begin to place students. Actual class sizes will vary below or above these ratios. Class sizes vary depending upon the courses that students choose in high school, the configuration of teams in middle school, and the different sizes of elementary grade levels and configuration of combination classes. Additional support is provided to teachers whose class sizes are above certain levels.
Enrollment also affects the district's funding. Overall, across the district, enrollment for the 2009–10 school year remained steady without significant growth or decline. Throughout the district, there will be pockets of growth in some schools while other schools will see flat or declining enrollment.
Will the district continue programs such as International Baccalaureate (IB), Science, Technology, Engineering and Math (STEM), Advancement Via Individual Determination (AVID), all day kindergarten and other initiatives underway to enhance student learning?
It will depend on the availability of funding. Those decisions will be made in conjunction with the specific schools involved, and the availability of resources at the site.
Have field trips and travel been reduced?
Yes, as outlined in the adopted Budget Savings Plan.
FACILITIES AND OPERATIONS
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.
BUDGET SAVINGS PLANNING
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. Adequate reserves are critical for paying 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 due to stagnant or declining enrollment, 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. The district cannot decrease its reserves below 3 percent and still operate in a financially responsible manner on a monthly basis. School Board policy 7130 sets the minimum for reserves at 3 percent with a recommended range of 3 to 5 percent to compensate for economic uncertainty. Currently, district reserves are within this 3 to 5 percent range.
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. The Foundation is currently in inactive status with its Board members considering how to proceed.
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.
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