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2017 Budget Information

Kent School District has instituted both a spending and hiring freeze for the remainder of the 2016-17 school year. Below is a message from Superintendent Calvin J. Watts regarding these important cost-cutting strategies, a video with greater detail from Chief Business Officer Mike Newman, and a list of frequently asked questions and answers.

 

After reviewing these items, should there be further questions or concerns, please email budget@kent.k12.wa.us and a representative from the finance team will be glad to assist.

 
Also, all are invited to attend upcoming community meetings on the spending and hiring freeze. Please join members of the Kent School District administration for a question and answer session on Thursday, April 20, from 6:30-7:30 p.m. in the Kent-Meridian Library or on Monday, April 24, from 6:30-7:30 p.m. in the Kentlake Cafeteria.
 
Message from Superintendent Watts 
 

The Kent School district is well known for its extraordinary students, excellent instruction, incredible diversity, cutting-edge technology, supportive community, and thoughtful management.  However, like many school districts in our state, we are now faced with the exact title of the National Center on Education and the Economy’s report, “Tough Choices or Tough Times.” 

 

Our School Board and I constantly review the financial forecasts provided to us by our budgeting team. We have seen some possible “tough times” on the horizon that have led us to some “tough choices.” Beginning this month, we are implementing both a spending and hiring freeze for the remainder of the 2016-17 school year. These measures, along with careful and conservative budgeting for the 2017-18 school year, will put us into a healthier financial position. 

 

The significant enrollment growth predicted for the past several years has yet to materialize, and that directly reduces our annual funding from the state. This shortfall is made worse by state government’s repeated delays and failures in resolving school funding issues related to the McCleary case. At the same time, rising costs in materials and supplies, investments in programs, lowered class sizes, new or replacement equipment, and needed increases in district competitiveness in the workforce market with improved employee compensation have added to our annual expenditures.

 

We identified these challenging financial trends over a year ago and took quick and decisive action. The fiscal health of KSD made it necessary to institute a spending freeze last spring for the remainder of that school year. It was a good first cost-saving step. Earlier this year, we reduced our materials and supplies budget by 20 percent. These cost-saving measures made a difference, but we are still not where we want to be or need to be financially. 

 

It has taken several years and many converging factors to get us where we are and it will take several years and many cooperating factors to get us back to solid financial footing. After several years of budget and staff reductions in the first part of this decade, and anticipating increases in enrollment, the District began to make strategic investments. We gradually increased staffing, compensation, and programming as part of our commitment to improving the educational experience and achievement of our students as well as the working experience of all KSD employees.

 

Decisions are made every year about our staffing models and we negotiate compensation issues with our collective bargaining groups that often cover multi-year periods. We develop programming plans based on need and resources available and experienced and knowledgeable people make difficult decisions with the best information available at the time.

 

I have heard some of our community members are surprised we are facing this budget challenge with the idea that our $252 million bond, which passed last November, would support school operations. Unfortunately because our bond revenues are restricted to capital projects only and cannot be used to hire staff, pay for instructional materials, or other important expenses needed for the daily operation of our schools, we need to take these specific cost-saving measures for the next five months. 

 

While these actions will impact KSD schools and departments, they should not have significant impact on the exceptional teaching and learning going on in our classrooms.  We remain committed to being a student-centered organization excellent instruction by a justly compensated, thoughtful, caring, and professional teaching corps and support staff. 

 

We appreciate the public’s understanding and support of our efforts to be good stewards of our resources that support the Kent School District’s students’ education.    

 
Dr. Calvin J. Watts
Superintendent
 
 
 
Frequently Asked Questions 
 
How did we get here?
A school district of this size is a large and complex organization. Currently, the overall budget is almost $400M, but a budget of any size is based on a set of expectations and predictions for a given period of time. When those predictions in revenue and expenditure match what actually occurs, all is well. However, when revenues come in less than expected and/or expenditures come in higher than expected, an organization faces serious challenges that must be addressed. 

 

It has taken several years and many converging factors to get here and it will take several years and many cooperating factors to get back on solid financial footing.  

 

After several years of budget and staff reductions in the first part of this decade, and anticipating increases in enrollment, the District began making strategic investments. Staffing, compensation, and programming was gradually increased as part of a commitment to improving the educational experience and student achievement as well as the working experience of all KSD employees. These investments were based on predictions of a continued trend of significant enrollment growth.

 

Decisions are made every year about staffing models and compensation issues are negotiated with collective bargaining groups, often covering multi-year periods. Programming plans are developed based on need and resources available and experienced and knowledgeable people make difficult decisions with the best information available at the time.

However, while gradually increasing, enrollment growth has not occurred in the past several years at the rates predicted. State funding is based on actual enrollment each year and accounts for two-thirds of the overall revenue. Staffing is set up in advance of the school year so if enrollment is appreciably lower than predicted, revenue can be significantly lower than expenses. In three of the past five years, the enrollment projections have simply been inaccurate.

 

The District, by policy and practice, has kept a positive fund balance as a reserve to withstand these types of annual uncertainties. However, in the past four years, the reserve has diminished and now is in danger of being in deficit without the spending and hiring freeze strategies. 

 

Where did we substantially increase our spending and why?

After several years of budget cuts at the beginning of this decade, strategic investments in staffing, compensation, and programming were made. At the same time, rising costs in materials and supplies, investments in programs, lowered class sizes, and regular increases in compensation have added significantly to annual expenditures. These decisions were made with the best information available at the time and their combined impact significantly increased district expenditures. However, anticipated revenue increases from significant increases in enrollment have not materialized. 

 

How was KSD so far off in enrollment projections?  What are we doing to improve in that area? 

Like all school districts, KSD has to predict future class sizes using standard population forecasting – new building permits, housing starts, and new apartment construction. However, some of those projects predicted for the KSD service area did not materialize. In addition, there was an increase in the number of students participating in Running Start as well as a new local charter school. That combination reduced actual enrollment by some 500 students from earlier predictions. 

To refine and improve enrollment prediction capacity, three things are being done:

·         An outside agency is being used to provide enrollment forecasting for the region and the District.

·         Predictive tools provided by OSPI are being used.

·         Internal data analysis capabilities are used to more accurately reflect changes in local school enrollment patterns.

 

How have the delays in the McCleary issue affected KSD finances? 

The state’s role in appropriately funding public education has always been a point of political debate and a legal debate as well since the 2007 McCleary case. The promise of resolution, definition, and adequate state funding has stayed confoundingly on the financial horizon for many years. When KSD made large investments in programing, staffing, and operational costs several years ago, the consensus among educational and political leaders in the state was McCleary would be resolved by now. With that resolution, local districts would know with greater assurance how much money would be received from the state and how much would be needed from local taxpayers in the form of property tax levies. Unfortunately, accuracy in budgeting at the local level has been hampered by the constant delays in educational funding from Olympia.

 

Why not use the $252 million bond, which passed last November, to support this financial shortfall?

Bond revenues are restricted to capital projects such as school construction, roof repair, new windows and heating systems, etc., and cannot be used to hire staff, pay for instructional materials, or other expenses needed for the daily operation of schools.  

 

Will this spending freeze impact the new construction promised with the bond’s passage?

No. All new construction and school repair work promised in the 2016 bond measure will proceed as planned. The funds are separate from operating costs.

 

What happens if the spending and hiring freeze do not save the funds needed? What is the District’s plan B?

The District is confident the spending and hiring freeze strategies will save the funds needed. However, the District cannot end one fiscal year or begin another in a negative cash position. While schools are primarily student and learning focused, financially, a school district is quite literally in the “people business.” Eighty-five percent of the KSD budget goes to personnel related expenses. The spending and hiring freeze strategies do not cut staff positions and currently there is no planned reduction in force, but if the shortfalls and the variable funding messages from the state continue, other options would have to be explored. The District, like any business or household, must live within its means.  

 
Why is KSD still involved in national recruiting efforts when there is a hiring freeze?

The current recruiting efforts are to fill known critical vacancies for the next school year. This region, and Washington State, do not provide the number of candidates needed for teaching positions in special education, dual language, ELL, and ESA. To attract and hire those candidates, human resources staff attends job fairs at universities and in cities across the country. This year’s annual budget for recruiting trips is less than $30,000. This type of recruiting is the most efficient and effective way of securing the necessary talent to provide those critical, legally required, and contractually obligated positions.

 
 
 
 
 




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