School superintendents talk budget challenges

Local school districts struggling to draft balanced budgets are finding the job more difficult because the state isn’t providing solid funding numbers to work with.

Local school districts struggling to draft balanced budgets are finding the job more difficult because the state, now tasked with fully funding basic K-12 education, isn’t providing solid funding numbers to work with.

“I know we have to build a budget to live within our means. Just tell me what our means are,” said Aberdeen School District Superintendent Alicia Henderson.

She and Hoquiam Superintendent Mike Villarreal were the featured speakers at the May 28 Greater Grays Harbor Inc. monthly business forum. Both talked about the frustration and challenges of trying to build a balanced 4-year projected budget, required by state law, when the numbers they have to work with keep changing.

Villarreal used as an example the latest “hold harmless” funds estimations, released by the state Office of the Superintendent of Public Instruction Friday afternoon.

Aberdeen had been planning its budget with what Henderson believed to be a safe number for hold harmless funds for the 2019-20 school year, $900,000, based on what she had heard from state agencies and legislators. On Friday she was stunned to learn that one-time funding for the 2019-20 school year has dropped to $531,775. Hoquiam’s number rose from $429,760 to $541,778.

“So just a moment like that … that’s how fast things are changing,” said Villarreal.

It’s not just the hold harmless numbers that are fluctuating. State money, which makes up the bulk of district funding, is still being calculated, forcing school districts to come up with budgets based on changing numbers.

“We are working on budget numbers daily that are wet concrete,” said Villarreal. “That adds to the challenge of working on a budget.”

Both superintendents provided a breakdown of estimated revenues over the next couple of school years; federal funding, amounting to a little more than $5 million for Aberdeen and a little more than $2.4 million for Hoquiam, tends to stay pretty constant, said Henderson. As for state funding, Henderson said some “hard numbers” should be available in June, but other critical funding amounts may not be out until August.

Henderson said Aberdeen is going into the 2019-20 school year with 46 fewer staff, about half through layoffs, the other through attrition (retirement, etc.). Hoquiam also was forced to make staff cuts. Both Henderson and Villarreal said they were able to keep most of the cuts away from the classroom.

“It takes an eagle eye to find efficiencies to save costs without cutting the quality of education,” said Henderson.

An example is state mandated K-3 class size reduction, which requires a ratio of one teacher for every 17 students. With reductions in staff and limited classroom space available, both districts had to make adjustments to avoid substantial fines: if the Aberdeen School District couldn’t make the ratio happen in the upcoming school year, the fine would have been $720,000. In Hoquiam, it would have been just under $312,000.

To accomplish this, with the added issue for Villarreal of Lincoln Elementary’s year-long closure for remodeling, Villarreal said classes had to be shifted to other buildings. In Aberdeen, moving sixth grade students to Miller Junior High helped with the class size requirements.

Health insurance requirements mandated by the state are also placing additional costs on school districts. Starting in January 2020, districts must pay a full match into a state health insurance pool for every employee, even if that employee has opted out of the district’s insurance or is part-time.

“We have to pay a full match for every employee, even if they are part-time,” said Henderson. That amounts to about 25 substitute teachers requiring a full match for health benefits in Aberdeen, she said.

Paying for health benefits for the 84 employees who have waived benefits will cost Aberdeen an estimated $1 million, according to numbers provided by the superintendents. Hoquiam is on the hook for $500,000 for its 55 employees who have waived benefits.

When asked about the hardest part of dealing with the current financial challenges in her district, Henderson said it has been the difficult aspects of personnel issues during uncertain financial times.

Both she and Villarreal have only been in their districts for about two years. “This is the time we should be building relationships,” with staff, said Henderson, difficult at a time when so many tough decisions have to be made that impact so many people in a community that has always shown solid support for its school district, financially and otherwise.

Teachers salaries negotiations created tension between administration, educators and the community, as state money made available for teachers salaries with little guidance on how it would be distributed.

“It was the wild west,” said Henderson, as negotiators raced to get their piece of the salary increase pie. Once the standard was set with raises of 18 percent or higher in districts early to the negotiating table, it set the bar for every other district, making for lengthy and at times heated negotiations. Now that the districts feel they have given what they can in teachers salary increases, and have made staff reductions at least in part because of them, the chance for further friction in upcoming negotiations looms large.

To rebuild community relationships, Henderson has embarked on a mission of financial literacy with a budget advisory board to educate the community about the intricacies of this new era of school funding.

The 20-person committee, made up of community members and district staff, was formed in the fall of 2018 to encourage involvement in prioritizing district planning and provide for a transparent, collaborative budget process. The board met monthly between October 2018 and January 2019, when its members delivered recommendations to the school board to address a $2.8 million projected budget shortfall for the upcoming school year.