White Salmon school district budget woes ignite community concern

Several factors are involved in the district’s funding problem, White Salmon Valley Superintendent Sean McGeeney said, including a decline in enrollment, the departure of one-time emergency pandemic funds, and changes to the state’s overall education funding formula leading to an increased burden on local districts to fund employee benefits.

“There’s all these pieces that have been coming together, and it’s unfortunate that all of them have come together to truly create this hurricane effect on the budget,” McGeeney said.

At a meeting of the White Salmon Valley School Board, McGeeney and ESD 112 Superintendent Tim Merlino, and ESD 112 Financial Director Gavin Hottman joined the district’s board of directors to discuss how the district got here and what will come next in their financial planning process.

Decline in enrollment

Annual Full-time Enrollment (FTE) in a school district is the primary driver of the state’s funding allocation to the district. It’s not the only factor in a complex formula managing state allocations to local school districts known by education officials as the state prototypical model. Additional factors include community poverty levels, special education needs, and local cost of living.

Since the 2019-20 school year, the district’s full-time student enrollment (FTE) decreased by more than 150 students, from 1,228.76 to 1,089.93. The decrease in students meant a decrease of around $1.28 million collected by the district in the current school year, McGeeney said.

The decline in enrollment has been noted across the state in several school districts. McGeeney said many factors are at work in explaining why the district has lost so many students. A sharp decrease was noted at the onset of the pandemic, and McGeeney said that enrollment has not returned to its pre-pandemic levels since then.

“The governor was incredibly clear about giving the order not to lay off staff because the kids are going to return. Unfortunately, the phenomenon has been that the kids haven’t all returned, probably for a myriad of reasons. So here we are, three years later, short about 160 kids from where we were back then, and we still have the same staff levels,” he said.

One-time COVID-19 funds

The district was supported through the COVID-19 pandemic through a mixture of additional federal and state funding mechanisms that have up to this point been discontinued. Since the 2019-2020 school year the district has received around $2.2 million through a combination of federal ESSER (Elementary and Secondary School Emergency Relief) funds and additional state funding to cover the gap created by decreased enrollment at the very beginning of the pandemic and during the 2021-2022 school year when students returned to the classroom.

McGeeney said the school district is on track to exhaust these additional funds by the end of the year, and currently is not expecting any additional relief funds through either the federal or state government.

Excluding those one-time additional funds, McGeeney said the district had been spending into the reserve fund for the past three years. From the start of the 2020 school year to the end of the 2022 school year, the district had spent close to $3 million over the district’s revenues excluding those additional relief funds.

“What I’m trying to highlight in this piece is that our ESSER money from COVID-19, with these additional dollars, have been masking the impacts of our district finances for over the last three to four years,” he said.

ESSER funds were used for COVID-19 mitigation and prevention, continuity of services, and to cover learning loss. The district used those funds, for example, to sustain the one-to-one technology initiative launched during the pandemic and supported student’s learning during the transition from remote to in-person learning. It also was used to maintain the level of staffing, both faculty and support (also known as certificated and classified), because, as McGeeney said in a follow-up email, that “the district received messaging from state officials about not reducing staff from the onset of the pandemic until fall of this current year, in the hopes of students returning to schools.”

The district is on track to use the entirety of its reserve funds, which saw a three-year high of more than $3 million in April 2021, by the end of the school year if no action is taken by the school board and the district’s administration. McGeeney said he was shocked to learn that it could be depleted within the year. He said he planned to earmark some ESSER funds for the 2023-24 school year. Within the budget reductions plan will be $300,000 earmarked for reserve funds to keep the district away from going into a negative balance. If the district goes negative, the state will enact oversight on the district’s fiscal policies.

Hottman said the state artificially balanced the budget with one-time funds, and many districts are seeing similar findings where they have had to use more of those one-time funds than they had originally planned.

Changes at the state level

Compounding the funding issue are recent changes to the state’s education funding formula. Known as the McCleary fix, named after a landmark ruling by the State Supreme Court to affirm the state’s responsibility to fund education, the legislature overhauled its funding formula with changes that McGeeney said come at a loss to the district.

A state-mandated raise for all educators in recent years and changes to the state employee benefits system, which now applies a greater share of the cost to local districts, has meant a 41% increase in costs for the district over the last five years while revenues have increased 14.5%, McGeeney said.

The bottom line

Ultimately the expenses are outweighing the revenue the district is taking in each year. As of Jan. 31, 2023, the district is projected to bring in $17.7 million in revenue while spending around $19.9 million for this school year. This overage, combined with inflation costs, a loss of one-time COVID-19 funds, and a predicted $300,000 replenishment of reserve create the $3.72 million target for reduction.

There are a couple silver linings to note. District voters overwhelmingly approved a capital levy that will bring in around $2.8 million over the next three years to continue the one-to-one technology ratio first employed during the pandemic, and which will also cover infrastructural and other technology-based upgrades.

District officials also were approved to join a transportation cooperative among ESD 112 schools, which will bring in additional funding in the low six-figures.

McGeeney said fiscal policies have changed at the administrative level, including limiting overtime spending as well as ensuring that funds are accounted for before being spent.

“I think there was a shift in philosophy when I got here around how we manage budgets, and so with folks knowing their total allocation, they just needed to make sure they maintained themselves in their allocation, that they didn’t go over,” he said.

With these additional measures employed he said that the impacts of the funding gap have started to be reined in.

Budget projections are preliminary given that the legislature will be in session until April 24. In the meantime, the district will be advocating to legislators for help filling the funding gap, and will also be holding stakeholder input sessions, an exact date to be determined. A budget reductions plan will be finalized towards the end of April.

“What’s really going to be uncomfortable for all of us is that we’re really in a two-month waiting period until we know anything definitive and then it will be a mad dash,” McGeeney said. “I will be engaged with you in the stakeholder listening sessions. I will be there engaged with staff.”

Proposed calendar changes

In addition to the budget discussion held last Thursday, a proposed change to the district calendar system was made public. McGeeney, along with district staff on the calendar committee, concluded to convert the district calendar from a trimester, five-period schedule to a semester schedule with seven-period days. The superintendent said the new schedule will have more flexibility and reduce staffing, bringing an estimated savings of $350,000 to $500,000.

“The semester, seven-period schedule is the only school calendar format that can facilitate all the programming for learning for students and maintain a balanced budget for the upcoming school year,” he said, adding that he reserves the responsibility to administer the district’s instructional program and business affairs, including making changes to the educational structure.

Despite the board’s hesitation towards approving the calendar, which may have been in response to concerns expressed by the public in regards to the seven-period system, McGeeney clarified that the board’s vote would ultimately affirm a start and end date to the school year, and would not involve the more comprehensive changes to the bell schedule. The board continued to table the calendar discussion to next month’s meeting.

Discussion

Board Member Laurie Stanton called for transparency moving forward in upcoming budget discussions.

“When everyone who has something at stake when there are decisions being made that affect a person, they need to be involved in that decision making process,” she said. “Even if the ultimate outcome is not anyone’s favorite, if they are a part of the process of making the decisions — and not just the next day told about the decisions — I think we as a community can continue to be a community, even when the outcome sucks.”

McGeeney said that every option is on the table to consider how to overcome this hardship.

“I want to hear ideas,” he said. “I like innovation. We’re going to have to think creatively to solve this. And we’re going to have to solve this together.”

Board Member Tracy Rushing called for accessibility to the information that district officials have at hand.

“I love that many of you have already felt empowered to reach out to us individually. But I think that we do need to be providing a more streamlined pathway for you to be giving us that input, so that it’s not adding to your plate,” she said. Rushing added that she encourages the public to contact their legislators to advocate for education funding.

Board Member Peter Harkema said he was not satisfied that the district has fully understood how they got to this point.

“If we can’t sort of take a clear-eyed view of how we got here, we run a risk of replicating this situation, and I think it’s really important that while we deal with the present crisis, we have a dedicated, thoughtful sort of view of how the hell we got here … and we can’t do that unless we look to the past,” he said.

Board Member Pat Dempsey affirmed that the district and community at large prioritizes a quality education for students. “Our main goal is to make sure that we prepare our kids for life afterwards. And a key element in that is a strong staff,” she said, adding that the state’s education system is “terrible. It’s been a terrible system for many, many years.”

Dempsey, who is a retired teacher, said that the district’s heart and soul is the staff. She called for including all stakeholders in the decision-making process. “We wouldn’t be the great district we are without everyone in the room and others.”

During public comment, multiple people online took to a Google spreadsheet to voice their concerns. In the room, teachers and staff alike expressed concern about the past and anxiety over the future.

Metal shop instructor Chris Hipskind said he was not aware of faculty input on the changes to the bell schedule, and expressed concern that shorter class times would result in a diminished opportunity for students’ education.

“When students have the opportunity to be active in these ways more learning happens. But this type of learning takes time,” he said. “A seven period day, with its very short periods, places students and staff in frustrating situations seven times every single day.”

Social Studies Teacher Peter Knowles said he was troubled by the uncertainty of how the district ended up in this situation, and how “artificial barriers to communication seemed to have compounded the problem.”

Fifth Grade Teacher Andrew Curry said he expects that the board do “your fiduciary duty in a timely, transparent, and effectual manner and take significant action to remedy this situation.”

Columbia High School Health and Spanish Teacher Caitlin Cray took a different approach. She compared each school year to pregnancy.

“I see us caring for the baby we collectively birthed on the first day of school, and are still caring for in spite of having learned in January of serious complications regard the birth of next year’s baby the following school year. Please do not resort to shame and secrecy and isolation when problems in this upcoming school year’s healthy birth become apparent,” she said. “I don’t know when people knew what, but if we’d known sooner, we could have taken action with our legislators. We could have more than four eyes on every contract, and every discretionary administrator’s salary. We could have looked at a lot of things from August until now.”