REDMOND — For the second year in a row, the Redmond School District plans to dip into its reserve fund to avoid budget cuts.
The district’s board on Wednesday approved a $116.9 million budget for 2019-20, a 3.8% increase over last year’s budget.
Projected expenses in the upcoming school year will outweigh revenue by about $3 million, if the district doesn’t have to spend any of its $8.5 million set aside for emergency spending. Kathy Steinert, the director of fiscal services for the school district, said it is not unusual to dip into reserves to avoid budget cuts, but she said in an email the situation is “less than ideal from a fiscal management perspective.”
The district only projected spending slightly more than $1 million in reserves in the current budget cycle.
Earlier in the budgeting process, Steinert said the school district was staring down a $1.1 million deficit. The district requires a certain amount of reserve money to be left over, and Redmond would go past that limit by $1.1 million if no changes were made.
The potential shortfall was partially due to rising retirement costs — which have affected every public agency in Oregon, including Bend-La Pine Schools — but also due to state funding not increasing at a level that the district hoped for. The Legislature passed a new tax on businesses to provide schools more funding this spring, called the Student Success Act, but schools won’t see that money until the 2020-21 school year.
Redmond School District will still receive about $4.7 million more in state funding than last year, and that extra money will partly be used to cover the rising Public Employees Retirement System contribution. Steinert said the school district also has a reserve created several years ago to help cover increasing PERS costs.
Redmond plans on using $882,000 of that reserve, which was originally $2.4 million, to assist in paying for PERS for the 2019-21 biennium, Steinert said.
Another reason for the potential shortfall was rising teacher salaries due to teacher experience.
The solution to avoiding the $1.1 million shortfall was to only budget for giving teachers a 1% cost-of-living raise, instead of the originally-planned 2% increase, according to Steinert. District negotiations with the Redmond Education Association are still underway, and if teachers receive a higher raise than that, the district will have to make cuts, she said.
The amount of federal grant money Redmond expects to receive is expected to decrease by nearly $1 million. Steinert said this is partially due to the school district being unsure if it would receive a couple small, one-year grants again.
“If we’re not confident we’re going to receive those funds, we don’t budget them,” she said.
Steinert also said exact funding amounts for certain grants, like IDEA, which pays for special education resources, hasn’t been determined yet, and that one grant, Title I-A, is likely to decrease. Title I-A helps schools with high numbers of low-income families, but Redmond’s improving economic status has improved enough that the school district expects less money from that federal grant.
The district is projecting a student population increase for next school year of 81 students in grades K-12. Many individual schools are expected to have steady enrollment, but Steinert said a couple schools are starting to reach capacity. She said Sage Elementary School, the district’s largest elementary by far and which is anticipating a 32-student increase, is a popular choice for parents due to its dual-language program, and the school district will need to eventually adjust the school’s attendance boundaries. Steinert added that Redmond Early Learning Center, expected to reach 394 students by October, “does not have much room to grow.”
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