Good morning!

With just two and a half days left in the student school year, I think it is timely to share important information about our budget situation as we know it now, and what might be ahead for us in the future. And I hope to answer the question, “Were salaries cut or not?”

Those of you who want Just the facts, can read the first section. Those of you who like lots of detail, can browse through All the details.

The concluding thoughts are for everyone.

JUST THE FACTS

Our budget situation in short:

1. With what the state cut in funds for next school year, plus projected increased costs and locally negotiated obligations, we faced an $8 million problem going into 2011-12. To partially address that problem, the Reduced Educational Program (REP) adopted by our school board in April identified $4 million worth of cuts for next year. We avoided other cuts mostly by using the August 2010 Supplemental Levy funds and by drawing $2 million from our reserves (aka “the fund balance”).

This is the second year in a row that I have taken a calculated risk of not implementing a Reduction in Force (RIF). I take this risk on behalf of our staff and our students.

2. To date, our staff and enrollment projections show us with approximately a $1 million risk going into next school year because:

· Teachers on continuing contract must still be placed into positions for next year.

· We must hire for some specialized special education positions.

· Staff attrition is lower than our historic trends.

· Staffing “close to the bone” means we incur extra travel and time costs for staff on partial assignments in different schools.

3. The state cut some of the money it sends school districts to pay salaries for all staff.

4. In December, the Legislature took unprecedented action to impose midyear cuts for school year 2010-11. The latest economic forecast news means the Legislature may repeat that “unprecedented” action again next school year.

This school year, the midyear cuts were less painful for us because of local voters’ approval of the August Supplemental Levy. We can’t keep dipping into the reserves (aka “the fund balance”), asking voters for more relief, or counting on the Legislature to stop making more educational funding cuts.

ALL THE DETAILS

Our budget situation in detail

The Legislature did us no favors. Our local voters did. Because of their support for the August levy and because dedicated staff across this district have done work over the years to trim expenses, we have been able again to avoid a Reduction in Force of Certificated Instructional Staff (CIS).

Since before January, principals and staff have been examining and re-examining student enrollment projections and class registrations for next year to place students and staff in the right classrooms.

Our challenges, and our financial risks, are because:

1. With what the state cut in funds for next school year, plus projected increased costs and locally negotiated obligations, we faced an $8 million problem going into 2011-12. To partially address that problem, the Reduced Educational Program (REP) adopted by our school board in April identified $4 million in cuts for next year. We avoided other cuts mostly by using the August 2010 Supplemental Levy funds and by drawing $2 million from our reserves (aka “the fund balance”).

This is the second year I’ve taken a risk on staff and student behalf by not implementing a Reduction in Force (RIF). This year’s decision not to RIF leaves some continuing-contract teachers without classroom assignments for next school year. Their qualifications, while unquestionably fine, do not meet the criteria for the teaching positions now open in the district. This handful of experienced teachers remains among our teaching core, whether or not we have positions that match their certifications. This is a financial risk.
Some other key Certificated Instructional Staff (CIS) positions are highly specialized. These positions, mostly in special education, must be filled in the interest of the students and families who depend upon these teachers, and to ensure the district’s compliance with laws that guarantee a “free and appropriate education” for each student. This is also a financial risk.
Because we are staffing schools and programs so “close to the bone,” we are also incurring some extra costs for staff to travel from school to school to fill partial FTE positions. Those costs are less than the cost of having full FTE at each school, but the travel costs reduce the amount we save in next year’s expenses. This is another financial risk.
In other cases, we do have the right position for a particular staff person on a continuing contract, but the hours available for that position do not meet the continuing contract obligations. For example, we may have a contract for 0.6 FTE but only need 0.5 FTE for the position. This, too, adds to our cumulative financial risk for next year.

I am committed to maintaining the educational momentum underway because of many years of your good work. I am committed to retaining as many of our experienced and well-qualified staff as possible. I am committed to the legal and moral obligations of having specialized staff in highly specialized positions. Thus, I have undertaken approximately a $1 million financial risk going into next school year’s budget.

And … we are vulnerable next school year to another round of midyear budget cuts by the Legislature. The latest economic forecast shows that the legislators’ hoped-for rainy day fund will essentially be wiped out by the end of the state’s two-year budget. You may have read or heard some of the media and editorial discussions about another special session for the Legislature to consider further budget reductions.

Each one of us must remember that we are not alone in this situation and that many, many, MANY other districts are making much more painful cuts and decisions than we have faced so far.

Were salaries cut or not?

When I say “the Legislature did us no favors,” I’m speaking in part of the confusing political rhetoric of cutting “teacher and classified salaries by 1.9 percent and certificated administrator salaries by 3 percent.” The legislative rhetoric did not take into account that “administrators” are both classified and certificated. Legislative actions left local districts with little time to problem-solve and much political distraction from needed emphasis on end-of-year student success.

The Legislature does not cut classified or administrative “salaries.” What they cut are “apportionment formulas” which drive money to school districts. School districts by law negotiate contractual agreements, including salaries with local bargaining units.

State funding “formulas” never have paid the full market cost for school district staff, nor have they taken into account each district’s unique program needs. What the state Legislature cut was not “salaries,” but the amount of money it sends districts. In this district, no salary schedule adjustments will be made except in collaboration with the district’s bargaining units.

The Legislature does indeed prescribe the teachers’ base salary schedule. It also holds districts accountable to pay based upon the base salary schedule. Also, many teachers in Washington school districts, including ours, have a second salary schedule (the TRI schedule) which is funded locally. So, the Legislature’s actions have led to bargaining in many of the 295 districts across Washington state. We have begun this process here in Everett Public Schools as well.

Our budget choices must balance the needs of students with a calculated financial risk

Our K-12 long-term strategies to increase rigor, expectations and the number of students graduating are working!

In Everett, our “higher expectations” have been paired successfully with “high support.” For example, many high school students need increasingly higher level courses because of their achievements in earlier grades. Others need support to meet those increasing expectations and to successfully graduate.

I wrestle with whether to increase elementary and middle school lunch prices by 25 cents (a measure identified in the Reduced Educational Program) or provide math support classes in high school.

I face the challenge of staffing our largest elementary school with an assistant principal or offering enough sections of social studies for each student to meet college entrance requirements.

I hear the concerns parents have about student transportation to and from school and weigh the cost of adding more bus routes with the cost of support systems for students off trajectory for grade level success or graduation.

CONCLUDING THOUGHTS

These choices are not easy to make, nor are they the only difficult choices. Our school board and I take full responsibility for them. We make them thoughtfully and with the advice and input of many, including our Fiscal Advisory Council. I am sharing this with you so that you have solid information and the “big picture” in mind when others ask you questions.

This is a heavy message for so near the end of the year, when you have so many details and projects to finish before the students leave on Friday. Many of you have told me that you appreciate this kind of information – even though you may not be able to read it all in one sitting or on the same day it is sent. Because I am committed to keeping you informed, and because school business and school news does not break for the summer, it is important that I share these thoughts and this information, even at this very busy time.

One of the core values of our district’s new strategic plan is a belief in learning and working together, the value of diverse views, and the power of collective wisdom. Working together on our financial challenges is essential. It is one of the many ways I count on working with you and on your behalf in support of our kids.

Please stay tuned for more information. I plan to share a few more thoughts with you before you leave for a well-deserved summer break.

Very truly yours,

Gary