South Kitsap School District’s fund balance is projected to increase for a second consecutive year.
Tracy Patterson, assistant superintendent for business and operations, said district officials have a “target” of $8.9 million for that account when SKSD’s financial year ends Aug. 31.
The district has not had that large of a fund balance since it was more than $8.6 million in 2009-10. But that number decreased to about $4.9 million in 2012-13, which led Reid to consult with Debra Aungst, a former Puyallup School District administrator, to perform a review of SKSD’s finances in August 2013. Aungst’s report stated that the district’s “current financial condition clearly calls for immediate attention.” She was referring to a specific category state education officials use to measure each district’s financial health. Using the state’s matrix, SKSD was three steps away from a financial warning. Among the state’s 295 school districts, 270 were in better financial shape than SKSD.
“I think Debra Aungst did a great job for us,” SKSD superintendent Michelle Reid said. “She did a contentious and comprehensive review. We also had a state audit … we had a finding for our financial condition.”
Reid said she made some changes when she was hired to succeed interim superintendent Bev Cheney on July 1, 2013. She said she placed directors in charge of their budgets.
For example, transportation director Jay Rosapepe was placed in charge of expenditures for his department. Reid said that enabled those officials to decide how to spend some of the funds they receive, which she believes resulted in savings and enabled them to prioritize issues. Reid also said the hiring of Patterson in June was instrumental.
“Since Tracy’s come on board and has brought really sound fiscal practices to the budgeting process, we’ve just had to be really disciplined about our financial work in the district,” she said. “We have better oversights in place. I think we’re maintaining a sustainable institutional control model with regard to our finances. I don’t think we’re going to find ourselves in that position again.”
The district’s financial condition also has been enhanced by a growing student body. Reid said SKSD, which had 8,433.17 full-time equivalent (FTE) students enrolled through February, has grown for the first time in 16 years. That is significant because Patterson said the district receives about $5,700 per FTE in state funding.
“I think a significant part of our health is the resurgent enrollment,” said Reid, who also credited “innovative” teachers and several district initiatives, such as all-day kindergarten and the Spanish Immersion Program at Burley-Glenwood Elementary School, and the January arrival of the aircraft carrier USS Nimitz at the Puget Sound Naval Shipyard, for gaining students.
SKSD’s fund balance reached more than $12.8 million Jan. 31, but Reid said the district needs to transfer money out to address capital facilities projects, which include roof replacement projects at Burley-Glenwood, Hidden Creek and Mullenix Ridge elementary schools, and some academic initiatives.
The latter, she said, includes technology upgrades and the possibility of a new Language Arts program for the district as it prepares students for Common Core, which are a set of rigorous national standards in math, reading and writing.
Reid said all of that can be accomplished while maintaining a fund balance reserve at a higher rate than the targeted 3 percent before her arrival.
“We want to maintain a 5 percent board committed fund balance,” she said. “We want to make sure we don’t fall below that 5 percent again because that makes us bondable and it gives us a little bit of a cushion should something happen.”