HRCSD Prepares 2020 – 2021 Budget
The proposed 2020 – 2021 budget for the Hood River County School District was presented Tuesday evening May 5th in an on-line public meeting to the Budget Committee comprised of county resident volunteers and the school board. The budget was presented by the district’s award winning Chief Financial Officer (CFO), Saundra Buchanan, with background details provided by other district cabinet members including the Director of Curriculum & Instruction, Neely Kirwan, and the Director of Human Resources, Catherine Dalbey. This team along with other cabinet members, school administration officials, and the school board have been part of the ongoing district operations for many years. Those years of experience are helpful as the budget process for the year ahead is challenging with significant unknowns regarding the impact of Covid-19 on State School Funding.
The proposed budget is aimed at preserving current staffing, service and program levels. However, the presentation also noted the high likelihood of less state school funds than previously anticipated. The CFO noted that in response to the likely reduced state funding, the proposed budget includes a portion of “reserved funds” saved by the district over the past several years. The inclusion of these funds will at least partially fill anticipated gaps between actual State School Funds and the budget costs to maintain current staffing and programming levels.
The meeting included a presentation by the Curriculum Director reviewing the past five-years of the District’s Mission (Excellence, Every Student, Every Day), and 20/20 Vision for the Future (Every Student Graduates with the Knowledge and Courage to Learn, Serve, and Pursue Their Dreams). This included a review of student outcomes compared to the 20/20 vision goals. Seven goals were reviewed including items such as reducing student absences for K-12, reading and math skills, on-track to graduate, and college course enrollment. The Curriculum Director noted the district’s success on this plan that was started five years ago with at least five of the goals attained or on-track to attainment and the remaining two showing significant improvement. Details of the 20/20 vision presentation can be found in the 2020-21 Proposed Budget presentation document on the district website.
The CFO presented a review of the district’s financial accountability excellence. The district earned its sixth consecutive unmodified opinion from external auditors with zero findings – the highest commendation possible. The district was awarded Certificate of Excellence in Financial Reporting by the Association of School Business Officials for the past two completed fiscal years. The district was also awarded Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association. Thanks to these financial achievements, the district’s Standard & Poor’s bond rating was raised to AA- from A+ in January 2019.
The CFO reviewed district progress on 2016 bond levy capital projects (new construction and improvements to every facility in the district). The CFO noted that county tax payers are receiving $79.3 million of project work for $57.175 million of bond debt. This is nearly 140% of value of completed work for the tax payer original investment. This premium is the result of several items including: $8.6M bond premium as they sold for more than par value due to district high S&P bond rating; $4.5M state matching grant; $4M state seismic grants; $1.85M interest on bond investments, and: $3.2M from revenue from the district from sources such as the construction excise tax. The CFO reported that the bulk of project work has been completed but with the premium several additional projects are underway including High School CTE facilities, HRMS improved security entry facilities, and Wy’East seismic improvement.
The remainder of the budget session was notably gloomier looking ahead at the 2020-21 budget year. The actual amount of funding from the State School Fund is unknown, but it was reported that Governor Brown has already alerted state agencies to assume at least 8.5% budget reductions. The next state economic forecast is due on May 20 and will start to shed more light on the future. The CFO noted that the HRCSD 2020-21 proposed budget includes equivalent staffing and programming as the past year.
New to this budget is an amount marked as reserved for future expenditure; this is intended to provide funds to help plug anticipated gaps in state funding. The CFO noted the actual amount of such gaps are unknown and it remains to be seen if district reserves saved over the past several years will be sufficient. The reserves are the result of HRCSD Board of Directors policy recommended by the prior superintendent several years ago requiring a 5% budget reserve (5% of total annual budget held in reserve for future challenges such as state budget cuts). In fact, the Board policy set 5% as the minimum but held 8% as the goal. The past several years of success with this policy will now be helpful in filling some of the anticipated future funding gap.
In conclusion, the budget committee approved the proposed budget as presented. It was discussed that unknowns exist regarding the state budget but state law also requires this budget process to proceed. Approval by the committee is one step in the process, which must be followed by school Board review with public comment, and final Board approval (scheduled for a June 10 School Board public meeting). Should state school funds allocated to the District decline as a result of economic inactivity across the State, District staff will make recommendations to the school Board for future budget modifications, if needed.