By Stephen Floyd
The Silver Falls School District (SFSD) has been advised to cut $1.2 million from its current budget by June and $8.8 million for the next school year to correct a looming deficit and patterns of overspending.
During the April 8 meeting of the SFSD Board, officials received a financial presentation from Jackie Olsen, executive director of the Oregon Association of School Business Officials.
Olsen has been working with SFSD since early March after officials learned of a deficit that threatened June payroll.
Olsen reported the district is on target to overspend its budget by $4 million this year, leading to a projected cash deficit of $1.3 million. This was greater than an initial cash deficit projection of $825,000 in February.
Olsen advised a spending reduction of $1.2 million this year to address the deficit and to lay the groundwork for greater cuts the following school year. She also suggested the district implement a hiring and spending freeze through the end of the current school year.
Olsen said spending in the next school year’s budget needs to be reduced by $8.8 million. That reduction includes $3 million to match declines in revenues and $1 million to restore depleted financial reserves.
She said the district must also cover added expenses such as $4 million for a bridge loan, $500,000 for unemployment costs and $300,000 for public pension costs.
She said cost overruns were not the result of a single person, single program or individual school, but were “a district-wide problem.” Olsen said 56 separate accounts started the current school year in the negative, some by a few dollars and some by hundreds of thousands of dollars, as well as 13 grant accounts.
Olsen also reported the district has a recent pattern of overspending, including $770,000 in the 2021-2022 school year and $1.3 million in the 2022-2023 school year. She said correcting this habit will require cuts beyond those she proposed for this year and next.
Olsen also proposed policy changes and advised that the board start receiving monthly updates on expenditures, revenue and budget adjustments.
The board made no immediate changes to policy or to the budget. Interim Superintendent Joe Morelock said he would present the board with options after he meets with principals and union representatives. He warned that solutions will likely be difficult and unpleasant.
The board had planned to vote on applying for a Tax Anticipation Note (TAN), which would borrow against upcoming property taxes to cover this year’s cash deficit. Because the projected deficit changed, the loan amount needed to be reassessed. The board set a special meeting for April 11 to vote on pursuing the TAN. The meeting was after the Our Town print deadline. Coverage will be available digitally at ourtownlive.com after the meeting.
The deadline to apply for a TAN is April 15.
