The Silver Falls School District (SFSD) hopes to cut this year’s budget by up to $3 million as general fund reserves continued a steep decline that began in 2020.
Principals were asked to discuss potential budget scenarios with staff during December. Sarting in January the SFSD Board will receive detailed reports and regular budget updates. The goal is to begin restoring reserves that have fallen since the COVID-19 pandemic.
The 2019-2020 school year saw a beginning fund balance of $4.7 million. This year the beginning fund balance was closer to $800,000, according to SFSD Business Manager Steve Nielsen. This was below predictions of $1.5 million for this year. Seeing reserves drop into the six figures was a bad sign for the district’s financial health, said Nielsen.
“It’s been a ‘rainy day’ for 46 months,” Nielsen told the board during its Nov. 27 meeting. He gave a preliminary report on the need for reduced expenses.
He said before COVID the district was able to maintain a rollover of 10% to 12% out of an annual general fund budget of roughly $50 million. Now that figure is closer to 2%. As a matter of policy and best practice, he explained, the district must maintain an ending fund balance of around 10% of the general fund to avoid insolvency.
Nielsen said a significant impact on reserves was a 10% drop in enrollment at the start of the pandemic, with a corresponding drop in enrollment-based revenue. He said recovery has been slow, regaining roughly half of the students lost.
Also at play was damage from the ice storm in 2021, and the impacts of inflation such as an expected 17% increase in PGE rates starting in January. The district is also paying higher wages to employees under new contracts for the teachers’ and classified employees.
One unexpected-yet-welcome challenge has been an increase in the rate of more experienced teachers being hired for open positions. While these employees cost more, they also bring a high quality of education and Nielsen said this may be the district’s new normal.
For specific budget-cutting strategies, officials said they asked principals to look for solutions that fit the needs of their employees and building.
On a broader scale, Assistant Superintendent Dan Busch said they have become selective in how they fill vacant positions. Busch said there is not an official hiring freeze, rather the goal is to identify low-priority vacant positions and decline to fill them.
He said this could apply to teaching positions. The board will have to look at the impacts of increased class sizes as they make budget decisions in the coming months.
– Stephen Floyd
