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Superintendent eyes balanced SKSD budget

South Kitsap School District officials have grappled with budget deficits for several years.

But first-year superintendent Michelle Reid is determined that trend will end.

“It’s kind of like our home budgets,” Reid said. “If I want a snappy new car, I need more money in my checking account than I currently have. If I don’t have that then I need to keep driving the car I have for a while longer.”

SKSD’s latest financial report, which ran through February, shows the district will have about $92.5 million in revenue from state, local and federal sources. Its estimated expenditures are almost $91.3 million, but that figure does not include about $1.1 million in transfers to the debt service and capital outlay funds. That pushes SKSD toward a balanced budget when those monies are accounted.

“The goal would be to break even,” she said. “It will be progress not to spend into the fund balance.”

In August, Reid had Debra Aungst, a former Puyallup School District administrator, perform a review of SKSD’s finances. Aungst’s report stated that the district’s “current financial condition clearly calls for immediate attention.” She was referring to a specific category state education officials  use to measure each district’s financial health. Using the state’s matrix, SKSD was three steps away from a financial warning. Among the state’s 295 school districts, 270 were in better financial shape than SKSD.

“We have more stability right now than we have previously,” she said. “I know last year was a bit of an anomaly in terms of, if you will, the little bit of the budget chaos. I think we’ve kind of put that to bed.”

Another area where Aungst’s report cited for concern was the district’s fund balance. During the 2009-10 school year, SKSD’s fund balance was $8.6 million. Reid said that fund balance, which is set at 3 percent of its revenues, had a balance of $4,861,586 at the beginning of the school year. She said it is projected to grow to $4,954,949 when the school year ends. Reid said she wants to increase the fund balance to 3.5 percent of its revenues in the future.

Smaller fund balances create issues for school districts if they need to address cash flow needs.

“We’re continuing to work at rebuilding our fund balance and being fiscally responsible,” she said.

Reid also believes SKSD can accomplish that without sending out any reduction-in-force (RIF) notices to educators this year. In May 2013, the district’s school board approved RIF notices of more than 68 full-time positions, including more than 61 teaching slots. Fifty-seven people received layoff notices May 15. All but 16 were called back because of retirements and resignations from other positions.

“I don’t believe that we’re going to have to do a formal RIF process this year because there are enough people that transfer and retire in any given year,” Reid said.

She also has changed the structure of the district’s cabinet. Reid said that used to be limited to the superintendent and that person’s assistants. Now, she said it includes those positions and the directors of different programs and support departments throughout the district.

“This year one of my commitments was to make the cabinet a broader cabinet,” Reid said. “I think that’s really helped our conversations and decision making about when someone retires or leaves, we can have a conversation about whether we can absorb that position or function. We’ve really worked hard as a team to help put us in a responsible financial position.”

She believes the district’s financial issues have been addressed to a point where other areas can receive more attention.

“We can focus back on our work, which is doing the best job possible for children,” Reid said. “I think that’s where our focus this year has shifted back to.”

 

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