Yakima School District officials say next year’s budget puts a priority on keeping classroom teachers, though they’ll need to pull about $15 million from reserves to balance it.
Associate Superintendent Scott Izutsu, who oversees district finances, told the Yakima Herald-Republic the district has “enough money each month to pay the bills,” but added the district has work to do to keep budgets in line in future years.
The Yakima school board unanimously approved a budget Tuesday with about $235.6 million in revenue, and $249.9 million in expenditures. District officials said the plan is to use about $15 million in reserves to put the district at a $10 million ending fund balance, roughly 4.2 percent of the annual budget.
The following year, the district would go into the red if spending remains consistent.
Board members expressed concern over the waning reserve funds.
“It is troubling to me that we are this low,” Martha Rice said. “It makes me kind of nervous.”
If budgeting continued in this direction, she said, education services in the district and throughout the state would “screech to a halt” after this coming school year.
A budget surplus of 5 percent is considered sufficient by the Washington Education Association. Legislators unsuccessfully attempted to create an 8 percent minimum for end fund balances this past legislative session.
The $15 million imbalance is significantly higher than the $1.1 million excess of expenditures in the $235 million 2018-19 budget. Contributing factors include salaries and benefits exceeding state allocations, declining student enrollment, increases to legal costs in the district, a cut to funding based on K-3 student-teacher ratios and changes to state and local funding, according to the district.
No teachers have lost jobs, but there have been reassignments due to declining elementary enrollment and positions lost due to retirements and resignations.
Superintendent Trevor Greene said salary raises during negotiations in the past year led to minimal retirements, which “certainly helped our retention.”
Districtwide, there are roughly 30 fewer full-time equivalency Yakima Education Association positions budgeted for this coming school year than last year. This reduction comes as enrollment has been on a gradual decline since the beginning of the 2016 school year. There were 16,163 students then, compared to 15,962 expected in the coming school year.
“Keep in mind the concept has always been to try to not touch the classroom,” Izutsu said. “There are other districts that are experiencing the same thing (budget imbalance), but they have made more significant reductions, so we’re trying to put that off as long as you could, so we were able to do that through these other pieces that naturally occur.”
Part of the budget gap is due to changes in state funding that capped local levy income at $1.50 per $1,000 of property value as part of a “McCleary fix” last year to address a court order on an imbalance in state funding of basic education, instead contributing more to districts at the state level. The cap was then lifted to $2.50 per $1,000 in property value for most districts this legislative session.
But increased funds for districts like Yakima, which originally approved a $3.05 tax per $1,000 in property value, cannot be collected immediately.
In light of that, many districts across the state are facing budget gaps.
In the Spokane School District, which is roughly twice the size of Yakima with 30,000 students, 325 layoff notices came earlier this year.
So far, Yakima has avoided the same fate.
But Greene said the district will have to make hard decisions to be solvent in coming years.
On Monday, the district severed its relationship with food services provider Sedexo in an effort to reduce costs through in-house food services, for example. The district is facing a $1.1 million deficit in this area alone.
“We have to make changes,” he said. “We’re OK with what we have as far as the situation that we find ourselves in now, but next year we’re probably having a different conversation.”
He intends for it to be a transparent and collaborative process with community members and staff at all levels. An email address for budget-specific inquiries has been established at email@example.com.
Central office staff
Some changes already underway include more efficient central office staffing, he said. The district decided not to hire a deputy superintendent when Cece Mahre resigned in June to work for a curriculum development organization. Greene is absorbing some of her responsibilities.
Still, the district has budgeted for 31 director positions, compared to 28 last year.
Izutsu said two of these positions are federally funded, meaning they won’t create new costs for the district. And administrators said these roles are necessary and, in some cases, come at a cost savings.
An assistant superintendent of human resources role will be filled after a year of vacancy.
An in-house legal counsel is also being hired in light of high district legal costs to reduce liability, increase trainings and represent the district in court, said district communications director Kirsten Fitterer. These hires are expected to reduce district expenses, such as legal fees.
Still, they emphasized that the central office runs on a lean staff.
According to OSPI records provided by Izutsu, the school district had the lowest central administration expenditures statewide for districts between 10,000-20,000 students in the 2017-18 school year, accounting for just 5.3 percent of general funds.
“We can’t be so lean that we stop offering the services that we need to our employees, community, and of course students,” Greene said.
But if more teachers were brought on, school funding would actually improve, said Yakima Education Association President Steve McKenna.
This year, the state implemented class ratio compliance, providing less funding to districts that did not have an average ratio of 17 students to each teacher in Kindergarten through grade 3.
The district has an average of 20.6 students per teacher across these grade levels, according to Fitterer. While the district still receives funding for being below a 24-student ratio, this enforcement removed roughly $5 million that the district relied on in previous years.
Izutsu said the district did not have the physical capacity to have class sizes that small, and that adding portables to do so would be costly.
But McKenna said doubling up teachers in existing classrooms is one potential solution.
“They don’t have any plan to address the class size money from the state by lowering class size, leaving (money) on the table,” said McKenna. He said by hiring enough teachers to put two in a classroom and meet the ratio goal, the district would receive at least $500,000 in surplus funds through the state, minimizing the deficit. He said there is no restriction on multiple teachers in a classroom. It would also help address student discipline problems among this age group by having more authority figures in each classroom, he said.
“That would help some of the discipline problems,” McKenna added. “That’s a concern I’ve been bringing to them for roughly a year now.”
But Izutsu said with Yakima’s salaries above the state funding model, this approach would not likely benefit the district budget. Accessing those funds, he said, is unfeasible for most districts — including Yakima.