The Hermiston School Board approved its budget planning parameters at a meeting Monday night. Overall, the board planned for slight growth in the next year, but remained conservative in its spending limits.
The board assumed a growth of 50 Average Daily Membership weighted (ADMw). The ADMw is not the same as enrollment, but refers to the number of students in the district with the added consideration of how much money will be allocated per student based on various needs, such as special education or English language learners.
The board also approved a state school fund estimation of $8.871 billion, and $8,155 per ADMw.
Katie Saul, the district’s director of business services, said the legislature sets the state budget as a total amount for the two years of the biennium, and then has to decide how to split the funding over two years. For many years, 49 percent of the funding was allocated to the first year, and 51 percent to the second year. The split was to help districts with annual costs like salary or utility rate increases. In more recent budget years, Saul said the state has allotted 50 percent of the funds for each year. But this biennium, districts are lobbying to return to the 49/51 split. Saul said the even split makes it difficult for districts to plan for the second year, and often leaves districts without as much funding as they would like, or turning to deficit spending in the second year. This can lead to cutting expenditures, including staff positions.
Saul said although the current biennium’s budget was split 50/50, the funding was higher than expected and prevented a shortage for most districts. But she said that’s not something districts can count on, leading districts to push for more funding funneled into the second year of the biennium.
“While we may not have to make the significant cuts that other districts do, we are also not able to expand programs or offerings to support the additional growth,” Saul said.
The board approved an ending fund balance minimum of 10 percent. That money is set aside as a safety net, to meet various maintenance needs, and allow them to continue funding programs and staff in the event of an economic downturn. That allocation would put them at about $7.78 million with reserves, and $6.64 million without reserves.
The board voted to be able to access about half of its reserve dollars for funding shortfalls — up to $650,000 of its current biennial balance of $1.3 million.
The PERS reserve balance is $2.57 million, and the board elected to have access up to $500,000. In the 2019-21 biennium the PERS rate will increase by 4.88 percent, and more rate increases are expected in the future.
Saul said the district forecasts an expenditure budget of $64,152,499, and predicts receiving $63,439,383 in revenue. Though that means they would be operating in a deficit, Saul said that is not likely, because the district typically doesn’t spend all of its budget.