A reduced budget for the North Beach School District was approved Tuesday in an attempt to correct the district’s downward financial trend and avoid further depleting cash reserves.

The 2023/2024 school year budget was crafted by Superintendent Dr. Jim Shank — who assumed the position in June — and unanimously approved by the district board of directors after a public hearing before the board’s regular meeting Tuesday. The reductions, which were first presented at a special meeting in May, mostly consist of cuts to administration, and no staff will be laid off.

“I believe it’s a budget that’s fairly well put together,” Shank said Tuesday. “Nothing is ever perfect — there might be something that doesn’t play out in the way that we think, or actually plays out better than we think.”

According to Shank’s budget, the district will have about $666,000 left in its cash reserves at the end of next school year after using $100,000 to fill the gap between the district’s anticipated revenues and expenditures. The district anticipates spending $13.6 million this year, down from $14.2 million last year.

“If we kept on doing what we were doing, we would have exhausted our fund balance before the end of this coming fiscal year,” Shank said in an interview.

The district’s cash reserves are currently down about one million dollars from this time last year, and have fallen from $2.4 million following the 2020/2021 school year.

“I wish there was more money there, but it’s also not zero,” Shank said.

In addition to a slimmer pot of cash on hand, the district will generate about $100,000 fewer from local levies and state-apportioned funding than it did last year. Like other districts in Grays Harbor, North Beach’s enrollment is shrinking, and therefore, so is the amount of money the district receives from the Office of the Superintendent of Public Instruction. The district’s enrollment has dropped by about 100 students since the 2020/2021 school year.

About half of the district’s budget comes from state apportionments, meaning predicting student enrollment is a key part to balancing the budget, Shank said. If he overestimates that number, the money he thought the district would get doesn’t show up. If he underestimates the number, he won’t have hired enough teachers to accommodate the unexpected students.

Last school year, the district budgeted for 700 to enroll, but when only 630 walked through the doors in the fall, about $700,000 in student appropriations, money the district was banking on, never flowed from the state to the district. Shank has budgeted for 625 students to enroll in the district this year.

“You need to be as accurate as possible in your estimate,” Shank said. “If you’re not, you end up in these situations where you’re needing to dip into your fund balance to pay the bills, the agreements that you’ve made. That’s exactly what happened last year.”

Student enrollment also dictates the amount districts can garner from local property tax levies. That’s partially due to the “McCleary Fix” — a legislative reaction to a 2018 Washington Supreme Court ruling that mandated the state fully fund basic education.

The fix limited the amount districts can ask for from property taxpayers, and led North Beach’s levy revenue to drop from this year to last, even though property values in Ocean Shores did the opposite.

The budget is pinched further by expiration of pandemic-era emergency funding, which amounted to more than $550,000 last year.

Much of the reduced salaries come at the administrative level, Shank said. In addition to his superintendent duties, Shank temporarily will take over as principal of Pacific Beach Elementary following the resignation of Principal Marlene Perez. The district also won’t fill the contract of the assistant principal position at Ocean Shores Elementary.

Shank said conducting a Reduction In Force — laying off staff — was not an option for this year’s budget, because the procedure must be declared by a deadline that had already passed when he took over as superintendent.

Shank also presented a capital projects budget Tuesday and, after two ballot measure failures — a $110 million construction bond and a $7 million projects levy — will have to dip into cash reserves in that area as well. The district plans to spend $6.7 million on projects next year, most of which will be funded by OSPI’s Seismic Safety Grant Program, and $800,000 in “additional capital projects” that will pull $250,000 from cash reserves.

“We want everybody to know that we’re being good stewards of the public dollar,” Shank said. “My goal during this school year is I really want to present a balanced budget this time next year. So there’s still some work that needs to be done.”

Contact reporter Clayton Franke at 406-552-3917 or clayton.franke@thedailyworld.com.