With cost expected to rise $3 million, district is seeking community input during upcoming budget process

PMG FILE PHOTO - Like many other school districts in the state, Newberg is facing budgetary cuts that will effect students and teachers alike.

On the heels of an unexpected enrollment drop at the onset of the school year, the Newberg School District is proposing to cut $4.3 million from the 2018-2019 budget.

In response to the lower enrollment, the district scrambled to cut $1.5 million in a manner of days, but with its budget process set to begin in March, officials are seeking input to help them prioritize its spending.

"Going into the first budget committee hearing, we want to make sure that everybody understands the current financial picture," district communications coordinator Autumn Foster said. "So this is really just the first step in the budget process."

The district said a few different factors are necessitating the cut, including an adjustment to its state school funding for 2018-2019 tied to the enrollment decline and rising costs in salaries, benefits, transportation and utilities. Officials cited those as the two main causes for an expected $3 million shortfall, but the district also intends to set aside an additional $1.3 million to boost its ending fund balance (EFB).

The EFB fell to approximately $372,000 at the end of the 2016-2017 school year and restoring it to $1.3 million would make it 2.5 percent of the overall budget entering 2018-2019.

The board of directors is formulating a policy that would set a target goal for the EFB, with the Oregon School Board Association recommending schools setting aside 5 to 7 percent to help provide stability and absorb unforeseen costs or reductions in revenue.

"Having a strong ending fund balance keeps funding ripples from turning into waves," Director of Finance Ilean Clute said.

Foster added that Newberg's state funding has been negatively adjusted by approximately $500,000 in each of the past two years. That contributed to the low EFB, as did the district's choice to use 50 percent of its biennial school funding this school year.

In most years, the district budgets 49 percent of that money for the first year of a biennium, but last spring opted for 50 percent in order to offset expenditures related to revenue corrections, salary increases and to boost the EFB.

The enrollment drop in the fall has helped put the district back in a similar position this year, although the funding gap is certainly bigger.

"We cut lean in the fall," Foster said. "We weren't real aggressive with the cuts because school had already started and we made all of that happen within a nine-day period because students were already in school. We knew this year we were going to have to be frugal the whole year because of that, because we cut lean. Looking ahead to next year, we're trying to be a little more proactive and that's where this ending fund balance situation comes into play."

In addition to the normal budget committee hearing schedule, the district is planning to host forums to solicit feedback from staff and the community, although what form those will take and when they will be held has not yet been determined.

"We want everyone to have a voice in this process," Superintendent Kym LeBlanc-Esparza said. "We'll work together to make certain our budget is a reflection of our district's priorities. We plan to actively engage with staff and our community to help prioritize spending."

The local teachers union, the Newberg Education Association, worked with the district when it made its cuts in the fall and will do so again. NEA president Gail Grobey said it has already been a trying year, though.

"The September piece, for a lot of teachers, felt like the rug being pulled out from underneath us," Grobey said. "It immediately set the stage for a lot of anxiety, especially for our new teachers. But where we sit right now, I think there's just a huge amount of stress around it, a lot of worry around it. We're very protective of our new teachers and conscious of those who are entering into the career and wanting to be very supportive of them."

Both Grobey and district officials stressed that the spending cuts should be made in a way that least impacts students and that maintaining class sizes has to be a priority.

With 85 percent of the district's costs tied to salaries and benefits, she added that all other spending will have to be scrutinized in the coming months.

"I think it's such a huge number that it's going to be very challenging," Grobey said. "We're looking at a really tough path and that's everybody."

The district board of directors approved the budget calendar at its meeting last week, with the budget committee set to gather for the first time March 20.

District staff will officially propose a budget to the committee May 1 and the board is scheduled to vote on a final budget June 12.

The budget committee does have one vacant seat for Zone 7, which is represented by board member Debbie Hawblitzel. Anyone interested in the position should call Gregg Koskela at 503-554-5041.

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