In an Aug. 12 letter posted on the South Kitsap School District website, Superintendent Michelle Reid corrected some misinformation concerning the district’s budget and financial situation, along with comments about the independent financial study of the district, funding, levy and class sizes.
The letter comes days after the board and about 100 people heard the findings of an independent fiscal consultant at the Aug. 7 board meeting at South Kitsap High School.
Debra Aungst, a former Puyallup School District administrator and an interim finance director for North Kitsap School District, performed a review of the district’s finances at Reid’s request. She spent about a week reviewing the district’s financial reports.
In Aungst’s written report, she noted eight factors that caused the district’s current financial situation:
• District’s fund balance has been dropping dramatically and is nearly exhausted.
• Enrollment forecasting is inadequate.
• No evidence of robust contingency planning.
• No ongoing source to support capital needs.
• Position control systems need to be strengthened.
• District is three steps away from “financial warning.”
• Budget basics should be taught at all levels.
• Oversight, controls and systems need improvement.
Correcting misinformation
Concerning misinformation about the budget, Reid wrote the elimination of 61 full-time positions was not a savings for the district. She noted after the loss of 1-728 and federal recovery funding, SKSD was paying for salaries through the use of one-time dollars from our reserves, not from an ongoing source of revenue.
“That means the elimination of these positions simply stops the practice of draining our reserves further,” she wrote.
Reid reported that 22 of the 61 full-time positions were restored. In addition, all teachers who lost jobs have been rehired into vacant positions except for 15.
The district will receive an additional $4.8 million from the state, but Reid stated most of the money is designated for specific uses. She noted $2 million for salary restoration for staff and another $2 million for state categorical programs such as the Learning Assistance Program (LAP), Special Education, and transportation. That leaves the district with approximately $800,000 to use at its discretion.
Levy and class sizes
Reid stated her gratitude to SKSD voters for approving an increase in the district’s levy lid. The district is expecting to receive an additional $1.6 million, but with the anticipated loss of student enrollment, levy collection amount also decreases.
“These levy dollars have been allocated by the board to primarily support capital maintenance projects, such as new roofs at the high school, Olalla
Elementary and Sidney Glen Elementary and building maintenance as these projects have been deferred for several years,” Reid said.
Regarding class sizes, Reid assured staff the district will monitor all class-size ratios and doesn’t anticipate change at the elementary schools. She said the board has directed her to use the preferred staffing level at the secondary level.
“What that means is the possibility of an increase of three students per classroom at the secondary level. Know that where we can, we will endeavor to mitigate these class size increases,” Reid wrote.
Balance budget
She stated that Aungst said the 2013-14 budget, as written, is balanced.
“A balanced budget indicates to her the reduction in positions is producing a balanced budget and makes fiscal sense,” Reid said. “We must continue to bring expenditures in alignment with our revenue. In other words, we can no longer spend more money than we take in.”
Reid stated the district’s five labor associations are negotiating in good faith and there is a clearer picture regarding district finances.
Reid can be reach at 360-874-7001 or by email at budget@skitsap.wednet.edu. She also has a blog on the district website and welcomes public comments.
“What continues to be particularly heart-warming is that while South Kitsap School District is experiencing financial challenges, we are in a good position to turn things around and restore our district’s reserves,” she stated.
The board has stated it will work to increase the reserves from 3 to 5 percent during the next three years.
Financial warning
SKSD is one of several school districts who are nearing “financial warning” from the state, according to Aungst.
South Kitsap, — along with North Kitsap, Bridgeport, Central Kitsap, Freeman, Highline, Pateros, Snohomish, Mount Baker and Nasselle — all have a financial profile score of 2.10, according to Aungst.
The district received the 2.10 score on the Office of Superintendent of Public Instruction Financial Indicators list, according to documents available on the district’s website from OSPI for the 2011-12 school year. A score of 2.10 put the district three steps out of being placed on “financial warning.”
Aungst said SKSD’s score has been dropping since 2009-10 and the district will need to increase its score by 50 percent to meet the statewide average profile score of 3.12.
