School District Works to Balance Budget With Needs

— from Orcas Island School District Office —

The School Board has approved the budget for the coming school year “with reservations.” Before adopting the budget, they voiced deep concerns over the necessity of dipping into the reserve (basically our savings account or rainy day fund) in order to fund it. The board has spent the better part of a decade building this fund and adopted a Minimum Fund Balance Policy calling for a reserve of one month’s expenses.

Why is this such a big deal when there’s still money in the bank?

Imagine this: You work hard to put money away, just in case something happens. You finally have enough in reserve to cover one month’s expenses. Then the water heater needs replacing… and the dentist’s bill arrives… and your kids want to go to camp. Suddenly, you’ve used nearly two weeks’ worth of that cushion. Sure, you have more than half your savings left, but the car has been making funny noises and the boss has been talking about ‘restructuring’ at work. Your comfort level drops several notches.

So what can you do? You cut back where you can… and you put new spending on hold until your situation is clear. Some things will just have to wait.

Our School District General Fund expenditures average nearly $850,000 a month. Payroll alone accounts for over $600,000. OISD has to maintain a reserve to ensure that these critical expenses are securely funded until we know exactly what the ultimate impacts of the State’s new funding plan will be. It is the only responsible thing to do.

[perfectpullquote align=”right” cite=”” link=”” color=”#810912″ class=”” size=””]So what can you do? You cut back where you can… and you put new spending on hold until your situation is clear.[/perfectpullquote]

Funding for our schools is flat in the coming year, and expenses continue to climb. Even using a chunk of our reserve funds, it is unclear whether we will be able to bring back all of our teachers. That means tough decisions are required to insure we can continue to offer the best possible programs for our students in the Fall.

Using the ‘fund balance’ to balance the 2017-18 budget will cause the reserve to fall below the minimum required by the school board. A bigger concern is whether the district will have to rely on the reserve again in 2018-19 to balance its budget.

District leadership is working to address the challenges the new funding plan presents, to ensure that the situation does not become dire, as it once was ten years ago. The School Board’s priority is the success of all students. As always, when they deliberate their budgetary decisions, they will put the needs of students first.