Districtwide Budget Savings Plan: Questions and Answers
Last Updated: 6/26/2009
As many people know, the nation, state and our local community are facing many financial and service-related challenges as a result of the significant downturn in the national and international economies. Since the operating budget of the school district is fiscally dependent upon the state for the majority of the revenue it receives, any negative change in the amount of revenue the state receives usually means that the school district’s revenue will be less.
The state has a multi-billion dollar revenue shortfall for the next 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 next school year and 2010-11. 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
Our plan to develop and adopt a 2009-10 budget will result in savings 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
- Pursue additional revenue sources.
Why does Bellingham have to reduce its budget?
Bellingham must reduce its operating budget for the 2009-10 school year due to a combination of rising costs, years of inadequate state funding, at least a $9 billion state budget deficit, and rigid state finance law that allows little flexibility in determining how to fund students’ greatest needs. 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 68 percent of its funding from the state based on student enrollment, 20 percent from local operations levy dollars, 9 percent from the federal government and 3 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 a lack of increasing per pupil 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 prudent district that is constantly seeking opportunities to improve the efficiency of its operations. Our 2008-09 operating budget is balanced and we do not anticipate reductions for the remainder of this school year, other than proactive saving measures we are taking to anticipate reductions that we will face next school year. This could change if the state unexpectedly reduces our current year's revenue. About 84 percent of our school district’s budget is spent on people and personnel-related costs and 16 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.
What was the process for developing a budget savings plan? How will staff and our community offer input and be involved in an ongoing way?
Click here to view a detailed description of the process and timeline. The district gathered input and budget savings ideas from all stakeholders — students, staff and community members — through Jan. 30. District leaders met with all staff at each site in January to share information, answer questions and solicit ideas. In addition, community presentations were held the last week in January to gather input. All ideas and input were compiled for the District Budget Advisory Committee (DBAC), comprised of representative staff, students, parents and community members. This committee met during the week of Feb. 9 to work with the staff and public input using established criteria, and rank-ordered the list of potentially feasible budget savings ideas for the Superintendent, who gathered public input and worked with district leaders to draft a Budget Savings Plan recommendation. The Superintendent shared the draft plan publicly at community meetings and gathered additional public input before presenting the Budget Savings Plan recommendation to the School Board. The School Board took additional public input and made amendments to the Budget Savings Plan before adopting it on March 17, 2009. The School Board directed the Superintendent to immediately begin planning for reorganization and implementing the adopted Savings Plan. The School Board will adopt a final budget for the 2009-10 school year at the June 25 meeting.
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.
When will staff be notified about specific personnel reductions?
Implementation of the district's Budget Savings Plan continues with reductions in nonemployee-related costs, administration and districtwide savings, helping to reduce some of the overall impact of the state legislature's budget on our classrooms and staffing.
The district has delivered a total of 64 notices to certificated staff in order to meet the May 15 deadline, as set by state law. Of the 64 certificated notices, 12 are certificated staff with continuing contracts. Of those 12, seven are partial Reduction in Force of continuing contract (ranging from a loss of .1 to .8 FTE), and five are full Reduction in Force of continuing contract. The remaining 52 are staff with provisional contracts. Provisional staff are teachers in their first or second year of provisional status with the Bellingham School District.
The process to consider rehiring many of those staff members is currently in progress. Based upon early estimates, the district is hopeful that it will be able to rehire approximately half of the nonrenewed staff members in some capacity as certificated staff members.
Retirements, resignations and leave replacements continue to come in daily. As of Thursday, May 14, the district is identifying remaining openings across elementary, middle and high schools, which include a number of leave replacement contracts. Human Resources is working to fill these openings based upon contract status and qualifications such as certificated endorsement area.
The notifications are necessary because of the state's reduced general fund allocations to the district, state cuts to Initiative 728 funding, the end of Gates Foundation funding and elimination of instructional coaching (Budget Savings Plan #44), anticipated rising expenses, flat enrollment and implementation of the Budget Savings Plan. For example, the impact of the elimination of instructional coaching for next school year has created a need to place approximately 10 teachers back into the classroom who are serving as instructional coaches this year. For the 2008-09 school year, Initiative 728 funding provided 28.5 full-time equivalent (FTE) teachers for K-12 class size reduction. For 2009-10, there is currently only enough I-728 funding for 10 FTE for class size reduction.
Notices to full-time administrators whose positions are being eliminated through implementation of the Budget Savings Plan were issued last month. All of the job responsibilities of the unfilled Executive Director of School Administration position have already been reassigned among the remaining Central Administrative Team members. The essential job duties of the other administrator positions and related staff positions that are being eliminated are in progress of being redistributed through an extensive reorganization of the Central Services Team.
Classified staff members whose specific positions are being eliminated through the Budget Savings Plan have received initial verbal notice. Those whose hours are being reduced in schools and departments are currently working with administrators on implementation. Official notices to classified staff will be delivered by the end of June.
The district sincerely regrets the financial circumstances that make these notifications necessary because of the personal, emotional and financial impact on dedicated staff members who contribute so much to our children, schools and district.
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 2009-10 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 it doesn't require the state to actually provide full funding. Therefore, every time the state stipulates a cost-of-living adjustment, the district must make up the difference between what the state funds 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 for next school year 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 (an increase of .21 from 08-09), 27.23 for grade 5 (an increase of .1 form 08-09), 28.9 for middle school (an increase of .5 from 08-09) and 29.24 for high school (an increase of .5 from 08-09.) In the past, the district received enough Initiative 728 funding for an additional 30 staff positions to further reduce class size. In 2009-10, with reduced I-728 funding, the district will be able to fund 10 staff positions to further reduce class size (one for each high school, .5 for each middle school and four to five for the elementary schools with the greatest needs). This will help reduce the baseline class size staff ratios listed above to levels closer to 2008-09 baseline 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.
Enrollment also affects the district's funding. Overall, across the district, enrollment for the 2009-10 school year is projected to be flat. 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.
Will we reduce the number of field trips and travel?
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 taxpayer money.
Will the budget savings plan affect the reopening of Lowell Elementary, construction of the new elementary school on Aldrich Road, and property purchase for a future elementary school in Sudden Valley?
Click here for an update regarding Lowell Elementary School.
Please click here for a Facilities Update that includes future plans for Aldrich Road and Sudden Valley.
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. The "levy lid" restricts Bellingham from collecting more than 26% of its revenue from the levy. In addition, since our current four-year levy runs through 2012, we cannot revise our levy until at least 2013. Our levies are based upon a set 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, then we must lower that rate and 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 and general fund are separate and by state law, cannot be interchanged.
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.
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% and still operate in a financially responsible manner on a monthly basis. School Board policy 7130 sets the minimum for reserves at 3% with a recommended range of 3 to 5% to compensate for economic uncertainty. Currently, district reserves are within this 3 to 5% 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. A group of community members is currently working to grow the Foundation and build awareness.
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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