Schools see $3 million budget boost

The Lebanon Community School District is projecting a boost in revenue this year, which increases the size of its budget for next school year by nearly $3 million.

Supt. Rob Hess presented the district’s proposed budget to the Budget Committee Thursday evening, April 12.

“Our 2018-19 budget year finds us in a good place to invest,” Hess said in the annual budget message. This was due to additional money received from the state. “As a result, our ending fund balance increased from $3 million to over $5 million. We now have an opportunity to to make some strategic investments in programming, staffing and resources.

“The areas of investment in this budget include special education, alternative education, music, K-6 configurations, middle school athletics, school safety, CTE (Career and Technical Education), PERS (Public Employees Retirement System) reserve, textbooks, bus replacements, facility improvements and facilities assessment.”

The proposed budget increases staffing levels in certified, classified and administration, he said.

While budgeting for 2017-18, the Oregon legislature remained in session, Business Director Linda Darling said. It had yet to approve a funding level for education.

The 2017-18 budget reflected the potential for an $8.2 billion funding level for the 2017-19 biennium, Darling said. The district budgeted based on a $7.8 billion funding level statewide with a transfer of $585,000 earmarked from the PERS reserve fund.

The legislature ended up adopting an education budget of $8.2 billion split evenly between the two years, resulting in projected state funding of $39.6 million for the General Fund in 2017-18, while the district had budgeted just $37.6 million.

That will boost total projected revenue for 2017-18 from $42.1 million to $43.9 million, with no transfer from the PERS reserve fund, lifting the beginning fund balance to a budgeted $5 million for fiscal 2018-19, which begins July 1.

The district is projecting total General Fund expenditures of $39 million for 2017-18. It had budgeted $42.1 million in expenditures. Among the projections, the cost of benefits is expected to be $12 million, $1.2 million less than budgeted.

The district is proposing a 2018-19 budget of $45 million, which will boost spending in several areas.

In order, staff developed the 2018-19 budget with three priorities, Darling said. First was for graduation and support services. Second was people, staff and benefits, and third was facilities.

Staffing levels will increase by 14.2 full-time equivalents based on current staffing levels. Of those, 8.05 are licensed staff, 4.15 are classified staff, one is an administrator for the alternative education program and one is a manager in transportation.

Licensed staffing is increasing in special education, alternative education, sixth grade and elementary music. Classified staffing is increasing in special education and English as a second language.

To meet the first priority, Darling said, the budget continues to support AVID, ASPIRE, CTE and other support programs. In CTE, it will set aside $40,000 for the Vocational House Fund. The program should be self-sufficient with the sale of the home constructed during the program, but the $40,000 is meant to ensure the success of the program.

The budget will set aside $400,000 for textbook adoptions in social studies in all grades, and $50,000 is earmarked for classroom furniture for new classrooms as part of the grade reconfiguration at several schools.

Middle School funding for athletics will increase by $31,000 to $446,000 as it expands to include basketball.

In the second priority area, the budget sets aside $250,000 for the PERS reserve fund, increasing the reserve to $1.4 million to help pay future PERS expenses. Darling told the Budget Committee she is hearing that PERS rates will increase about 6 percent in the next biennium. The budget also boosts the transfer from the General Fund to the Nutrition Fund from $50,000 to $100,000 to cover increasing staff costs an the Community Eligibility Provision, which provides free meals to students at qualifying schools.

In facilities, the third priority area, the budget earmarks $100,000 for security cameras and infrastructure in schools; $150,000 to develop a long-range facility plan; $250,000 to roofing projects; $75,000 to the Track and Turf Fund to help pay for new turf in the baseball and softball infields; and a bump of $50,000, for a total of $300,000, for bus replacement.

The proposed budget is based on a projected 80-student decline in student enrollment for 2018-19, from 4,260 to 4,180 students.

Darling said she projected enrollment by moving every class up one grade, subtracting this year’s senior class and averaging the past four years of kindergarten enrollment.

School Board Chairman Tom Oliver said he would like to see that projection increased, in keeping with where enrollment has been in recent years, noting that with the larger beginning fund balance, this is the right time to assume more risk.

That would in effect increase budgeted revenue – by more than $700,000 for 80 students – for the next school year. If the district did not budget for it and enrollment remained where it is, the additional funds would be added to the ending fund balance for the budget year and become the beginning fund balance for the following year.

“In a roundabout way, what I’m trying to say is I’d like to see us  spend more money,” Oliver said.

He suggested allocating the increase to the PERS reserve and hiring additional staff to cut class sizes.

He thinks based on past enrollment figures and the amount of building that enrollment will remain at a similar level, he said. “That money does no good for our kids when it’s sitting there in the bank. At what point does our (adverseness) to that risk not beneficial.”

Darling explained that boosting the enrollment projection allows the district the authority to spend the money connected to enrollment levels.

She said it makes her nervous though.

If the enrollment and funding do not appear, Oliver said, he would expect the district to be disciplined enough not to spend it.

“Staffing is up in every category,” Hess said. With fewer students, “that should drive better service for kids.”

Oliver asked Hess how far off class sizes are from the correct size.

Hess said they’re about six students over, similar to districts around the state, noting that Albany and Corvallis have larger class sizes but larger than they were 15 years ago.

The sweet spot, Hess said,  is 23 students plus or minus four or five.

Committee member William Barish said that teachers will want larger increases when they begin bargaining next year than in their current contracts.

“If we have good ones, I’d like to keep them, and I’d like to pay them to stay,” Barish said.

Committee members agreed they would like to see the projected enrollment increased, and Darling said she would return with several proposals.

Committee members present at the meeting were Oliver, Barish, Sandi Cox, Terry Deacon, Kris Latimer and Jeff Vandiver. Michael Martin, Richard Borden and Nick Brooks were absent.

The committee elected Cox chairwoman and Deacon vice chairman.

The committee meets next at 6 p.m. on April 26 in the Santiam Travel Station,750 3rd St.

The proposed budget may be inspected between 8 a.m. and 4:30 p.m. Monday through Friday at the Lebanon School District Office, 485 5th St.