Olympia School District

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Administration Budget Proposal

2011-12 School Year

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Overview• Budget Challenges

– Enrollment Decline– State Budget Reductions to Date

• Assumptions and Deficit Projections– House and Senate Proposals; Basis for Planning– Balance Sheet

• Steps to Developing the Budget• Policy Recommendations to Solve for Deficit• Reduction in Force

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Recent Financial Challenges

• State funding reductions have forced Olympia School District (OSD) to cut expenditures year-after-year.– In the last 5 years, OSD has cut programs by $6

million.

• Total revenue (state, federal, local) in the current school year is $1.2 million less than 2008-09 SY.

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OSD Has Already Belt-Tightened• We are the 33rd largest district, but our teachers’

income is ranked 106th in our state.• Our administrative costs are below average. If we

expended the statewide average amount on administration, we would spend $653,000 more.

• We have saved $640,000 over 2 years on utility costs.• We will do more to reduce costs and protect

classrooms: switch copier contracts, reduce utility costs further, furlough administrative staff, for example.

• More belt-tightening will not save the millions needed.

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Financial Challenges for 2011-12 SY1. Enrollment is slowly declining, generating less in

state funding.2. $2.7 million in ARRA Stimulus funds (provided over

2 years) have expired.3. State Reductions already enacted:

a) State has confiscated 14% of OSD reserve ($671,000).b) State has increased class size at K-3 by 2 students (4th grade by a

partial student); reduces state formula funding.c) State has confiscated $1.9 million in EduJobs federal funds (by

reducing state funds by $1.9 million).

4. State law caps local levy collections; in 2012 OSD cannot collect all of levy approved by voters.

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OSD Enrollment is Declining

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Highlights of Major Changes to OSD Funding

$ in Thousands Governor House Senate

1 Reduction to Reserve ($671) ($671) ($671)

2 K-4 Class Size Increase ($850) ($850) ($850)

3 Add Back K-3 Class Size for Madison/Garfield $0 $48 $119

4 Operating Transportation $464 ? ?

5 Transportation Depreciation (TVF) ($530) $0 ($530)

7 Gifted ($82) $0 $0

7 3% Salary Reduction $0 (Freezes Schedule)

$0 (Freezes Schedule) ($999)

8 Alternative Learning $0 ($493) ($247)

9 Total ($1,669) ($1,966) ($3,178)

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State-Funded Class Size2009-10 SY After K-4 $

Eliminated OSD Negotiated

Half-day Kindergarten 23.11 25.23 23

Grade 1 23.11 25.23 23Grade 2 23.11 25.23 23Grade 3 23.11 25.23 25Grade 4 26.07 27.00 27

Grades 5-6 27.00 27.00 27(5th)/28.7* (6th)Grades 7-8 28.53 28.53 28.7*

Grades 9-12 28.74 28.74 28.7**Represents historical staffing allocation formula; Overload is variable by content.

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Olympia School District

OSD 2010-11 Ending Fund Balance

$ in Thousands 2010-11 SY EFB

1 Budgeted 2010-11 Ending Fund Balance (September 2010) $4,949

2 Reserve decline Attributed to Enrollment Decline -598

3 Reserve Decline Attributed to State Reductions Already Imposed

-711

5 Other Small Adjustments +64

6 Revised Anticipated Ending Fund Balance $3,704

7 Percent of Expenditures 4.3%

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Olympia School District

Bottom Line for OSD in 2011-12 SY

Estimate as of 5/2/11, assuming House-proposed budget:

• Budget deficit of $2.364 million to solve for 2011-12 SY.

• Lowest reserve in OSD recent history.

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BUDGET DEVELOPMENT STEPSWhat are the steps to develop the budget?

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Developing the 2011-12 SY Budget1. Identify our revenue for 2011-12 SY.2. Identify the cost to provide generally the same

program in September 2011 as providing in March 2011—Maintenance Level Budget.– Includes increases in budget that are not policy driven,

e.g., utilities inflation.– Includes reduction in budget to reflect prior Board intent,

e.g., elimination of one-time funding items in 2010-11.– Includes reduction in budget to accommodate enrollment

decline or student-based staffing changes, e.g., special programs fewer use of paraeducator hours.

3. Identify and solve our deficit.

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Major Maintenance Items• Enrollment decline drives lower staffing

– 8.2 fewer elementary staff– 4.0 fewer secondary staff– 1.7 fewer special education-endorsed staff

• Utilities, $72,000 higher• Transportation fuel, $105,000 higher• Insurance, $58,000 higher• Take 1-time expenditures out of budget

– August 2010 workshop day– 3 free Full-day Kindergarten classrooms – $20,000 for safety investments

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ADMINISTRATION RECOMMENDATIONS

What steps does the Administration propose to solve the deficit?

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Goals• Retain services to students where ever possible.

– Prioritize academics, especially math and reading intervention.

• Keep kindergarten class size as low as possible in light of state increases in class size funding.

• As small a reduction-in-force (RIF) as possible.• Retain Board policy for a 3% reserve.• Include a contingency fund for inevitable Fall

adjustments.

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Highlights of Administrative Proposal

• More efficient bell schedules to reduce transportation costs.

• Continued progress to improve access to aligned intervention materials for math and reading to help struggling students.

• Expanding emphasis on math and science at the middle school level.

• Kindergarten class size of 23 or lower.

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Highlights of Non-Classroom Reductions

• Administration, 3%.• New bell schedules, more efficient transportation,

$130,000.• Athletics and Activities; $72,000.• Custodial hours and substitute custodians; $115,000.• Building supplies by 10-15%; $100,000.• New Fees: Preschool, on-line education, zero-period

courses, breakfast/lunch.• Facility rental fee increases; $21,000.

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Highlights of Student and Classroom-Related Reductions

• Reduce PATS by adjusting start and end times according to new bell schedule; 1 hour, 20 minutes reduction in service per week.

• Reduce preschool teacher time devoted to home visits and extra planning.

• Increase elementary class size by about 2 per class in grades 1-5.

• Increase secondary class size by 1.3 students per teacher; average of 30 per teacher/section.

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REDUCTION IN FORCE

What number of certificated instructional positions are being eliminated? How many OSD employees will be impacted?

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Reduction-in-Force Reconciliation

Anticipated as of 4/18

Anticipated as of 5/3

1 Enrollment and Grant-driven -20.0 -20.0

2 Budget Deficit-driven -37.4 -20.5

3 Total Reduction-in-Force -57.4 -40.5

4 Open Positions 25.7 27.0

5 Remaining Reduction -31.7 -13.5

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QUESTIONS