News & Information
Bellingham School District staff continue to work on the draft budget in preparation for the School Board to take action on the final budget at the June 25 meeting.
The district has been closely monitoring the evolving rules for its designated federal stimulus dollars, a total of about $4 million. The use of the stimulus funding is restricted to three areas and cannot be used as general purpose revenue. The three areas are providing remedial educational services (Title 1), special education services, and replacing the Initiative 728 class size reduction funds eliminated by the state for 2009-10 and 2010-11.
The district now has more information, including more retirements of staff, and is further along in the budget development process since notices to staff of non-renewal of their contracts were required to be delivered by May 15. As a result, the district has been able to rehire nearly half of the 64 certificated staff members who received non-renewal notices and is in the process of adding some classified staff hours back into the budget.
The 2009-10 draft preliminary district budget is currently estimated at about $100 million with an unprecedented expenditure reduction of about $2.5 million. Without the federal stimulus funds, the expenditure reduction would be about $6.5 million.
"In over 20 years working in school finance, and 30 years in public education, I cannot remember a year in which a school district's budget has decreased to such an extent. Generally state revenue for school districts increases from one year to the next but this $9-plus billion dollar shortfall that the state is experiencing has certainly changed that,” says Assistant Superintendent of Business and Operations Ron Cowan.
"Implementing the Budget Savings Plan has been painful because of its impact on people. However, because of the incredible input we received from the community, staff, and even students, we were able do so strategically and maintain many valuable programs for children. In fact, the way it looks right now, we’ll be able to maintain baseline staffing ratios for classroom teachers at the same level in 2009-10 as we did in 2008-09.”
Because the Legislature adopted a two-year budget with additional cuts in state funding for the district during the 2010-11 school year, implementation of the district's Budget Savings Plan will help lessen the impact of future reductions.
“The reductions being implemented for the 2009-10 school year should help better position us for 2010-11. During these uncertain economic times, which are forecast to continue for awhile, we hope to be able to mitigate the impacts of additional economic uncertainties and have the resources needed to meet the district’s operational and instructional responsibilities,” Cowan continues.
In the 2009-10 draft preliminary budget, the district will have about 4 percent in reserves with School Board policy dictating a range of 3 to 5 percent for financial and program stability. Among other things, adequate reserves are critical for paying monthly payroll and meeting other ongoing financial obligations. The district does not receive its funding from the state on a payment schedule that aligns with its expenditures. Therefore, the district often relies on using reserves to pay bills until that state funding is available. Without adequate reserves the district would have to resort to short-term borrowing and paying interest; something to be avoided. Reserves are also important to maintain programs during times of revenue shortfalls due economic factors, level or declining enrollment, and to cover unanticipated expenses or emergencies. Reserves also impact the district's credit rating and ability to borrow funds for bonds for construction projects at a low interest rate, which saves taxpayers' dollars. For the last several years, the district has been spending down its reserves to offset rising costs and meet financial obligations, a pattern that it cannot continue and still remain financially stable.