District may use reserves on deficit

Washougal School District superintendent Mary Templeton doesn’t mince words when talking about Washington’s new funding model for education.

“McCleary is not adequate to fund our schools,” she said of the school-funding case known as “McCleary” that required the state legislature to adequately fund Washington’s public K-12 schools. “The decisions that were made, I don’t believe they were intentionally meant to be negative, but they’re not fully funding basic education. That’s the reality. We are not immune to that. So the question is, ‘What do we do about that?'”

Templeton and her staff are working to find the best answer to that question. Right now, their response involves a four-year plan that centers on using the school district’s reserve funds and what Templeton calls “belt tightening” to reduce the district’s budget deficit, projected to be $888,155 for the 2019-20 school year.

Last year the Washington Supreme Court accepted the state’s new school-funding plan, ending the McCleary case, a years-long court battle over how to fully fund schools in an equitable manner. The decision increased the state school levy to $2.74 per $1,000 in assessed property value while capping the levies local districts can collect at $1.50 per $1,000 in assessed value.

“Next year is our big challenge,” Templeton said. “(We want to) figure out what we need to do internally to start looking for efficiencies.”

The schools chief said district leaders in Washougal are trying to determine if they are using every dollar to most impact student achievement.

“As we think about efficiency models at this time, based on the financial situation, it actually is a benefit for us because it will let us look at everything across a $44.5 million budget (for the 2019-20 school year) and say, ‘Is every dollar effective and efficient?’ And that’s going all the way from my budget down to the copy paper budget. We’re looking at everything. That’s just our reality,” Templeton said.

WSD held in reserve about 14 percent ($5.9 million) of its budget for this school year. That number is projected to drop to about 11 percent in 2019-20; decreasing to a little less than 11 percent in 2020-21 and about 10 percent in 2021-22.

Templeton said the district’s reserve has been up to 17 percent of the budget in years past, but has been gradually decreasing in recent years.

“This is going to be a much more dramatic reduction,” she said of the projected reserve depletions. “Over the course of the next four years we’re going to start using that money. Ten percent is about average for what school districts keep on reserve. That’s what we’re shooting for. Ultimately, it’s about $2.4 million of our reserve that we’re going to spend on this equalization for the four-year plan.”

Templeton gave credit to the WSD board of directors for helping the district accumulate a reserve fund — or a “savings account,” as she calls it — big enough to “provide enough time for us to figure out these efficiencies.”

“We’re also blessed to come out of a strike situation with a community coming together,” she said. “Those are two critical pieces for us.”

The exact details of the “belt tightening” will be seen in June, when the 2019-20 budget is presented to district board members for review.

“Dr. Templeton hasn’t really been specific about the ‘belt tightening,’ but for awhile we did have a freeze on all building budgets,” said Eric Engebretson, president of the Washougal Association of Teachers. “They’re working out a way to move the marbles around, and not in a bad way. (Templeton) is doing what she needs to do.”

Templeton has said the district will not cut staff positions for permanent employees in 2019-20.

“Everybody who’s a permanent employee is going to be with us next year, and I’m committed to that,” she said. “I feel like if we’re not going to find a way to value our staff, it’s going to be hard for us to move forward. Now, with that said, if we were to get to a different circumstance than we have in this moment in time, (reductions are) a possibility for the future, but that’s not what I see for us. That’s not what I’m planning for next year.”

Engebretson said he’s glad to hear that from the district’s superintendent.

“Typically, Washougal carries a higher reserve than other school districts of similar size. We’ve been in pretty good financial shape,” Engebretson said. “(Templeton) and I agree that the McCleary decision is not perfect by any means. Hopefully, the Washington Education Association and Washington State School Directors Association are backing bills in the senate and house that would restore the levy piece. That’s the biggest obstacle. I know a lot of districts blame their deficits on teacher salaries, but it’s not just the teacher salaries. If the levy swap (can be changed), I honestly believe the lines on the charts will even out or swim the other way.”

Templeton has also talked about the importance of continuing to pay teachers “market rate.”

“I’m happy to see that, because we lagged behind for many years,” Engebretson said. “There were some tense times last summer, but it all worked out. I think we offer a pretty darn good salary package for people to come out and join the Washougal School District.”

The teachers’ union president doesn’t foresee too many new-teacher hires in the coming years, however.

“Unfortunately, the hiring is going to be less than it was last year. We hired about 35, 37 new teachers last year. That won’t be happening again,” Engebretson said. “Plus, with the districts around us laying teachers off, unfortunately there’s going to be a fight for the few open positions.”

One of the main budget challenges for WSD is its enrollment, which has decreased in the last two years. The district budgeted for 3,030 students in 2018-19 and will end the school year with about 2,985. That figure is projected to drop by another 4 percent, to 2,873 students, in 2019-20.

“Enrollment is the biggest and most important driver of funding,” said Kristine Grindy, the district’s business services director. “Recent enrollment has trended down a bit due to declining birth rates and recession. Basically, fewer kids equals fewer dollars to spend. We anticipate that we’re going to budget to a conservative enrollment in 2019-20 as well.”