CKSD 2010-11 Budget Development

 

Critical Dates

 

 

CKSD 2010-11 Budget Development

 

History and Overview

 

Central Kitsap School District is in the midst of its 2010-11 budget development process, which is part of our three-year budget planning cycle. As we look at state economic forecast, it appears that the current challenges will be with us for at least the next three years. The good news is—unlike many districts statewide that have cut millions of dollars from their budgets in recent years even before the state's major reductions to education funding—we have remained financially solvent. This is the result of:

 

  • Steady financial belt tightening wherever possible
  • Operational efficiencies (CKSD has the lowest percentage of administrative costs of all Kitsap County school districts)
  • The support of our community
  • School closure and program review

 

If the District were to be funded by the state for next year at this year’s levels, we would expect to make only minor adjustments to operations and service levels to balance the 2010-11 budget. However, our state is again facing a significant budget deficit. As legislators complete their work to reduce spending across departments and programs, public education will be impacted. This will compound the $11-million in funding shortfalls already faced by CKSD over the past five years.

 

We expect the reductions from the state to be "categorical," meaning direct funding sources for specific purposes will be eliminated or significantly reduced. In order to protect students' quality educational experience as much as possible, the District has been and will continue to look for operational savings and efficiencies; however, because our program and service levels are already so lean, it is likely that we will need to absorb significant revenue reductions by trimming those areas that lose direct categorical funding from the state.

 

The most likely example of this is I-728 dollars, which the state provides to school districts to directly fund more certificated staff positions to lower class size and to offer professional development. The governor and legislators have already indicated this is a target for reduction or elimination. Reductions in I-728 funding for the 2009-10 school year were mitigated by using carryover dollars and stimulus funds. If the state moves forward with categorical reductions, we will have no choice but to make reductions in the corresponding areas.

 

Over the past several months, we have made concerted efforts to inform lawmakers about the impact of further cuts to education. In meetings, via written communications, and a trip to Olympia in February, board members and district administrators shared school funding information with our local state senator and representatives. Please click here to view the handout we provided. The handout describes the importance of a solid reading and mathematics foundation and the critical role of interventions. We described ways in which CKSD is preparing students for academic success, including professional development for teachers and all day kindergarten. Finally, we shared specific ways in which proposed state cuts would jeopardize student achievement. Additional information was provided on March 2, following release of the proposed House and Senate budgets. Please click here to view.

 

Until the final state budget is complete, we will not know the extent to which CKSD will be affected. In the meantime, we hosted four Community Budget Meetings in March and invited parents and community members to learn more about the 2010-11 budget process and to provide feedback. To view the Community Budget Meeting presentation, please click here.

 

We remain open to your ideas and suggestions for stretching our operational dollars. Creative thinking is always welcome, whether in a budget-cutting situation or otherwise, and we strive to operate in a fair, thorough and transparent manner and to preserve as much funding as possible for the classroom. Please e-mail us your ideas. We may not be able to respond to each suggestion individually, but all will be captured and considered by administrators.

 

 

CKSD 2010-11 Budget Development

 

State Budget Development Updates

 

April 13, 2010

The Legislature adjourned after the House and Senate reached agreement on a final 2010 Supplemental Operating Budget.

 

April 8, 2010

Day 25 of the Special Session, which is constitutionally limited to no more than 30 days.

 

March 15, 2010

The Legislature was not able to complete its work by its March 11 deadline. Therefore, Governor Gregoire called a Special Session expected to last one week. The session is limited to 30 days. Based upon initial state budget proposals, we could be required to reduce up to $4.3 million from our $115 million budget. We will not know the full extent of our budget shortfall until the final state budget is released. In the meantime, we have scheduled a series of budget meetings to update staff, parents and community members on our budget process, solicit feedback and answer questions.

 

March 3, 2010

Following release of the preliminary budget proposals, we sent information to legislators detailing the likely impact of their proposed reductions as they will affect CKSD students and staff. We have already made all the reductions possible without taking drastic measures (such as large-scale layoffs), but we have little additional financial capacity to absorb multi-million dollar reductions proposed by lawmakers.

 

February 26, 2010

The House and Senate both released their preliminary state budget proposals. Each version uses a combination of reductions, federal funds, transfers and new revenue the state's $2.8 billion deficit. As the legislative session moves into its final days, the House and Senate will begin negotiations toward a final compromise budget. In the meantime, our work to develop CKSD budget options for 2010-11 continues. The extent and depth of these state reductions are unprecedented and provide school districts across the state with little to no flexibility on designing budget options that will avoid directly impacting classrooms, staff and students.

 

February 22, 2010

We are continuing our efforts to inform lawmakers about the impact of further cuts to education. Pending the final legislative budget and assuming no additional relief from our state and federal government, the proposed state reductions will have a direct and unavoidable negative impact for all students, staff and communities throughout Washington. The legislative session is scheduled to close on March 11. At that time, we will have the information to complete our own budget. Until then, we are doing what we can to educate our legislators, ensure the future of our students, and support our staff to the fullest extent possible.

 

February 17, 2010
As we watch the ever-changing budget at the state level, there is much work to be done to develop the CKSD budget for 2010-11. Many complicated factors must be considered, including the economy, levy funding, declining enrollment and the current legislative session. The state budgeting process is now in the hands of the House and Senate.
 

January 12, 2010

Governor Gregoire unveiled her second budget proposal. In that proposal, she restored some K-12 programs (Local Effort Assistance, Gifted Education and Career & Technical Education). However, several K-12 programs remain unfunded (K-4 Class Size Enhancement, Initiative 728 funds and the remaining state-funded Learning Improvement Day)

 

December 9, 2009

Governor Gregoire presented her Supplemental Operating Budget. Many programs directly impacting CKSD were cut in this first draft of the budget. The governor explained that she would introduce a second budget, a combination of budget reductions and new revenue.

 

December 4, 2009

Over the past five years, cutbacks in state funding resulted in budget shortfalls totaling approximately $11 million for CKSD. Future reductions are likely as the state continues to experience significant funding shortfalls. As part of the budget process for the 2010-11 school year, we developed a survey to gather staff and community input. The responses to this survey will help our School Board prioritize any future cuts that are necessary based on additional funding reductions.

 

November 5, 2009

As the state deficit grows, the CKSD budget shortfall will increase. In addition, the District continues to experience a decline in enrollment, which means CKSD will receive even less state FTE funding. The stimulus funding we received came at a much needed time and provided funding in place of state cuts. However, if the state doesn't reinstate funding as the stimulus money disappears, our budget will be negatively impacted. Every school district in our state will be faced with continuing to make tough budget decisions for 2010-11.

 

CKSD 2010-11 Budget Development

 

Frequently Asked Questions

 

1.    Why are budget reductions necessary for next year?
Based upon initial state budget proposals, we could be required to reduce up to $4.3 million from our $115 million budget. We will not know the full extent of our budget shortfall until the final state budget is released. However, we are continuing to develop possible budget options for SY 2010-11 in the meantime.
 

2.    The levy just passed, so why are reductions still required?
Many programs and positions are currently supported by our local levy, and the renewal of our school support levy in February was a significant benefit to all of us. However, we expect the state to make even further reductions to K-12 education, in addition to the across-the-board cuts made over the last several years. The increased levy amount will help to minimize our shortfall for the 2010-11 school year, but having our levy in place will still not eliminate the need for budget reductions.
 

3.    How much weight does my feedback carry in the decision making process?
Feedback from all stakeholders remains an essential part of our decision making process.  The feedback and input from these meetings will be reviewed and considered by the Budget Development Team, the Community Finance Committee and Task Force Resource Steering Committee in working with the Superintendent to provide options for possible reductions to the budget.
 

4.    Would it be possible to provide savings by merging with surrounding Districts?
If all four local Districts (South, North, Central and Bremerton) were merged, we would be about the size of Seattle School District. This question has been asked a number of times over the years, and the same answer applies. Districts with the lowest cost for Central Administration are those between 5,000 and 20,000 students. Each of the four districts within Kitsap County is inside those numbers. Seattle’s Central Administration costs are significantly higher than those of CKSD. As a matter of fact, in 2007-08, CKSD was the lowest of the Kitsap County school districts regarding administrative costs. Consolidating districts may eliminate multiple superintendents. However, additional administrators would be added to a single Central Office to manage a large Seattle-School-District-like student and staff population over a much more widely dispersed geographic area resulting in a number of additional challenges. The fact is a larger school district generally has higher administrative costs. If merged, and if CKSD provided county-wide K-12 leadership (as an example), costs for Central Administration would increase and we would take on the debt of other districts, no longer qualify for Federal Heavy Impact funding, and have less local control through fewer school boards.  In this scenario, there would be less funding for student programs and staffing.
 

5.    When will staff be notified if a RIF will be necessary?
Affected staff will be notified as soon as possible regarding a possible Reduction in Force (RIF). The deadline for RIF notification for certificated staff is May 15 (pending completion of the legislative session). Classified staff has no required specified timeline. All groups will be notified as soon as possible.
 

6.    Should we have closed a secondary school to save money rather than just adjust boundaries?
This question was reviewed last year, and it was determined that we did not have enough space to move ahead with 9-12 high schools, which was the preferred organization structure. It was also decided that during the 2010-11 school year we would need to review this information for a possible adjustment. Our enrollment has declined considerably this year and been erratic in following any previous pattern. There are additional implications including slow kindergarten enrollment for 2010-11, possible impact of a second aircraft carrier ported at PSNS and a challenging economic environment.
 

7.    What is our plan for dealing with 6-12 math materials?
During the 2009-10 school year, 6-12 math was reviewed by the Curriculum Department in conjunction with building level math teachers and building administrators. We have fallen significantly behind in refreshing our instructional materials throughout the District. Reductions the past three years have left this budget with “bare bones” dollars. The needs of students and staff to support the 6-12 math programs are significant given our students’ futures. Selection of materials and possible implementation schedules inside our current budget resources are being reviewed and considered.
 

8.    Will All Day Kindergarten (ADK) be cut district-wide or at certain schools?
Decisions on ADK will be part of the budget process. Reduction or elimination of ADK will increase transportation costs, impact student achievement, reduce elementary enrollment and decrease Heavy Impact Aid funding. Tuition-based ADK can continue to be offered regardless of the final budget decision.
 

9.    What about the federal stimulus education dollars? Are we getting or trying to get some of this funding?
The stimulus funding for this next year (“Race To The Top”) requires certain criteria to apply as a state.  There is a bill in the legislature which may address this. Individual districts may apply under certain circumstances. CK is exploring grant opportunities from several sources, though grants rarely provide long term relief and potentially increase costs due to in-kind contributions, paperwork and other restrictions. We continue to work diligently to maximize our revenue at all opportunities without increasing or risking our current funding.
 

10. Will there be a rank order (seniority) list sent out to everyone?
Current seniority lists are available to staff on the SharePoint site:
Certificated In-District Seniority List 2009-2010
Certificated Categorical Seniority List 2009-2010
Classified Seniority List 2009-2010
 

11. Who can staff call with concerns or to get answers to concerns about staffing?
Human Resources has and will continue to answer questions for staff. Task Force Resource updates will be provided regularly and posted on the website for review. Meetings will be available for staff and community as we move through the process.
 

12. Are the RIFs (pending/potential) certificated and classified?
Reductions of both certificated and classified staff are possible. Attrition will reduce the impact of specific job reductions. Last year, there were reductions in classified positions, hours, days and staff. Certificated reductions have been managed in the past through attrition and reassignment, which will likely not be enough this year.
 

13. What is an ending fund balance? Do we have 11 million dollars in reserve now?
An ending fund balance is much like your personal monthly bank statement, a snapshot in time. As is common for most people, that balance includes your checking, short-term savings and emergency funds.  Your checking account may be currently allocated; you may have short term, planned savings (car repairs, new purchase, etc.) along with extra cash for emergencies. This is very similar to the District ending fund balance. The ending fund balance is divided into three parts:

Our 2008-09 ending fund balance as of August 31, 2009, was over $11 million dollars.  Part one of this ending fund balance, over $4 million, was for earmarked accounts. That total included $1.4 million for required funds that must be carried forward (I-728, LAP, 1128 science and math), over $1 million for insurance and inventory that we are required to maintain so that we can purchase inventory ahead of time and spend budgets forward, and finally over $2 million for carryover accounts including shared decision making funds, Training and Incentive Program (classified staff), building budgets, etc.  We have committed to carryover these budgets to provide flexibility, improved decisions and thoughtful use of scarce resources rather than an environment which encourages spending just to keep from returning funds to the General Fund. This part of the ending fund balance is similar to a checking account in which funds are already allocated but not yet expended. 

The second part of the ending fund balance is the Federal Contingency Reserve (FCR). We have had an FCR since 2002-03 to match the amount of Heavy Impact funds allocated to the General Fund. Heavy Impact funds are not guaranteed and do not come to the District until April or May of each year. Over the years, the amount of Heavy Impact funds placed in the General Fund has increased from 0 to over $4 million. The FCR is intended to match the amount of Heavy Impact funds that we will spend in the General Fund that year. This allows us to have those funds at the beginning of the year in order to meet all the obligations throughout the entire year regardless of when, or if, the Heavy Impact funds arrive. It also provides us the resources to maintain a positive cash flow. Our monthly payroll is over $8 million and our monthly bills are over $1 million. Total monthly expenditures are just under $10 million. The FCR is like a savings account that you maintain to save for a specific annual bill (car repair, insurance, purchase of a new car or appliance).  CKSD is the only district in Washington state receiving Federal Heavy Impact funding.

The third portion of our ending fund balance is our undesignated, unreserved amount. This is the “reserve” for emergencies for the District. If enrollment is down from budget, the state reduces funds during the school year, or we have unforeseen circumstances that come our way, this enables us to manage those challenges without impacting students and staff during the school year. We carry a 3% reserve (3% of anticipated revenue). Our 3% reserve is almost exactly $3.5 million.
 

14. How many certificated and classified positions have been reduced since 2005-06?
The following reductions do not include the closure of the two elementary schools and are specific position reductions since 2005-06:
        Classified           10.5 FTE/479.7 FTE = 2.18%
        Certificated        11.2 FTE/708.7 FTE = 1.57%
        Administrators     4.4 FTE/55.9 FTE = 7.87%

 

15. Which administrative positions have been cut?
Capital Projects Manager
Community Schools Director
Custodial Supervisor
Director of Research and Evaluation
District Athletic Director (combined with CTE Director)

 

16. If the District is potentially cutting up to 70 staff positions, how many of these would be administrative positions?
The reduction numbers intended for the legislature were generated to illustrate the worst case impact of all the proposed state reductions, including all reductions related to I-728 funding. The District has taken none of the allowable indirect charges from these funds. No administrators were hired with these funds and none were included with the information to the state legislators for possible reductions. Administrative position reductions, salary reductions and professional development reductions have been taken, and we already staff less administrative units then we are funded.
 

17. Where are federal stimulus dollars (ARRA) for special education being used? 
Half (50%) of ARRA funding can be (and is being) used to offset the additional District-level costs of providing special education services. The other 50% provides additional new special education positions, one-time training, computers and software. The Special Services Department can provide additional information on the plan for these funds, which will be available only for the 2010-11 school year.

 

18. What effect will the final state budget have on CKSD? 
It will take some time before CKSD will have the complete answer to this question. Both the House and Senate did pass a budget and the governor will need to sign the budget. Once this occurs, the Office of Superintendent of Public Instruction (OSPI) typically takes 5-7 days to process the state budget numbers and will then pass this information on to local school districts. Currently, OSPI is scheduled to deliver this information to districts on April 19. At that time, CKSD can process the final OSPI numbers and translate what the local impact will be for Central Kitsap School District.

 

19. Is the $100 million figure bigger or smaller than the District was expecting? 
This figure is at the lower end of the budget shortfall range, so we anticipate our original estimate of a $4.3 million budget shortfall will be closer to $3 million.

 

20. Will CKSD hold any future meetings to explain the final budget to the public? 
We have been collecting information and involving the community regarding the budget development process all year with surveys and community meetings. This fall, the District conducted a random sample survey with District residents to collect budget development information. During the winter an online budget survey was used to gather information from staff, students and community members. This spring, four community budget meetings were held to gather additional input regarding the budget development process in conjunction with an additional budget survey. We will continue to communicate in a fair thorough and transparent manner with parents, staff and community members. All meetings pertaining to the development of the final budget are open to the public. This includes study sessions and board meetings scheduled for April 19 and 28.