Approved budget results in $13.4 million deficit
Approved budget results in $13.4 million deficit
Posted on 08/29/2019

The Puyallup School Board has approved a $324 million spending plan for the 2019-20 school year that results in a $13.4 million deficit. Implementing this budget will result in a sharp decrease of the district’s fund balance over the next four years.

Directors unanimously voted to approve the recommended budget during the August 19 school board meeting as presented by Director of Business Services Laura Marcoe. The board action followed the second public hearing on the topic.

The budget development process was initiated in the fall of 2018. Enrollment projections were carefully considered, input regarding the State budget was obtained, and a district needs assessment was conducted. As a result, members of the school board were given a preliminary budget in a presentation made on May 24, 2019.

On August 5, the first of two public hearings were held for the purpose of presenting the Superintendent’s recommended 2019-20 budget and for providing the public an opportunity to make comments. On August 19, board members approved the budget.

Regarding general fund revenue, key points include:

The budget reflects a significant decrease (nearly $10 million) in levy revenue due to the first full year of collection related to a new state levy cap.

General state revenues are higher due to increasing enrollment, the salary and benefit increases based on the Implicit Price Deflator (formerly a “cost of living adjustment,” or COLA), health benefit increases, and funding for one additional day of certified professional development.

These factors have led to an overall funding increase of less than one percent.

Regarding general fund expenditures, key points include:

Implementation of new health benefits per the School Employee Benefits Board (SEBB) and Washington Paid Family & Medical Leave ($6.6 million increase).

Step increases in employee compensation, state salary and benefit increase pass through, and bargaining commitments ($10 million increase).

Operational increases ($1.8 million).

These factors have led to an overall expenditure increase of six percent.

Cost-saving strategies in the proposal include a reduction of some teaching positions. For the 2019-2020 school year the district decreased certificated instructional staff by nearly 50. However, staffing was increased by 22 positions to meet State class size compliance in grades kindergarten through three in order to maintain current funding levels.

Despite the budget challenges, the approved budget provides for a restructuring of programs for highly capable students, as well as the addition of a Kindergarten Academy, and the expansion of the Dual Language Program.

Director of Business Services Laura Marcoe provided a comprehensive report of the proposed budget using several visuals which can be viewed on the district website. This graphic presents the general fund expenditures for 2019-2020 by category:

 general fund

Director Michael Keaton thanked Marcoe and the business department for their “extremely well-prepared presentation,” stating it was easy to understand and very straightforward.

Superintendent Tim Yeomans also thanked the business office staff with particular appreciation for accountant Amie Day who recently caught a sophisticated effort to defraud the district of $2.7 million. “The internal controls of the business office really saved the day. It was a big deal for us . . . an amazing catch.”

In response to the current budget deficit of $13.4 million, Dr. Yeomans reminds stakeholders that “Half the deficit is due to the State’s implementation and underfunding of the School Employee Benefits Board (SEBB) plan. The district will be in a deficit situation over the next four years. During the 2019-2020 school year, we will be seeking opportunities to increase revenues through legislative actions, potentially run a supplemental levy, and identify additional expenditure reductions.”

The district will be reviewing classified and administrative positions and seek further staffing reductions through attrition.

forecast

In reference to the $13.4 million deficit Marcoe used the above graphic which shows a sharp decrease in the district’s fund balance noting, “The four-year outlook indicates the district will need to make adjustments moving forward in both expenditures and revenues to bring the budget back into sustainability.”

To view all slides used in the budget report, visit the PSD website.

To view all minutes of School Board Meetings, and read Board Highlights, a publication posted after each meeting click here.