The Chewelah School District board and administration held a community forum on March 27 to discuss the financial state of the district and upcoming budget cuts. The following are questions submitted by attendees during and after the meeting, along with answers from the administration:
Several questions were directed towards the impact of the “McCleary Fix”
Chewelah School District receives funding from the State through a complex formula that includes calculations based on enrollment, numbers of students identified for a variety of programs (including Special Education, Vocational and LAP just to name a few), and student demographics (poverty, second language, etc.).
The “McCleary Fix” was the Legislature’s response to the State Supreme Court’s order to meet its statutory program of basic education. This additional infusion of dollars became part of the School Apportionment formula that is disbursed by the Office of Superintendent of Public Instruction (OSPI) on a monthly basis that is constantly changing and updated as our enrollment and demographics change. The “McCleary Fix” dollars are not a special funding source but part of the overall funding from the State. Working back through our financial statements and attempting to identify what our full year School Apportionment would have been without the “McCleary Fix,” our best estimate is approximately $545,000.
Figure out how much of a pay cut teachers would need to take and ask each teacher to take that amount in pay cuts?
The District worked through difficult negotiations with employee groups that resulted in contracts deemed fair and equitable by both parties. The District is obligated to pay the negotiated salaries and benefit costs. The District can only reduce the number of staff in order to reduce overall staffing costs.
Why did the March 7th letter to the Board state a $215,000 deficit for the remainder of the 2018/19 year?
This is the approximate dollar amount that the District would need to reduce spending by to meet the Board goal of a seven percent reserve in the current fiscal year.
In slide 7, are the staffing numbers FTE or actual “bodies?”
The staffing numbers are in FTE (Full Time Equivalent)
Why did insurance costs increase more than anticipated last Spring when the budget was developed?
The District works with a local broker in order to ensure that the District has adequate coverage but at the most competitive rates. We are currently using United Schools Insurance Program which has over 150 members which allows small districts like ours to buy insurance at lower rates than we could individually. In August 2017 Fred Lee and HUB International were hired as Chewelah School District’s Property & Casualty Broker of Record to assist the district in controlling insurance premiums and coverages.
Renewal premium for 2016-2017 – $102,998.44. HUB/Lee was not Broker of Record for District Renewal premium for 2017-2018 – $93,932.21. First renewal with HUB/Lee as Broker. Premium represents a 9% reduction, even though USIP experienced “a minimal rate increase.” Lee completed physical inspections and valuations of all facilities, property and autos. We corrected values on the insurance policy which resulted in reduced Property values by $8,340,525, and reduced Auto values by $833,934 on the insurance policy. Reduction in values represented a reduction in the annual premium of $9,066, not considering the Pool rate increase. This reduction in premium is realized each and every year. Service Fee for HUB was $7,045 (7.5%).
Renewal premium for 2018-2019 – $102,943.99. Without the services provided by HUB/Lee in 2017, this premium would have been approximately $116,696. The USIP Board approved an overall rate increase of 9.5% for 2018-2019. This increase was the result of national inflation, significant losses in the State and nationwide affecting the insurance market, and the USIP’s overall loss performance in the previous years.
Is the District transportation in the red or the black?
The District receives funding for student transportation based on a formula that includes miles driven, student ridership and bus depreciation. The District projects that our funding and expenditures will balance for the year.
Where did the money come from and how much did the District pay for consultation of facilities?
The District worked with McKinstry and the Dept. Of Enterprise Services Energy Program to complete an investment grade audit of our facilities as a requirement to apply for a Dept. Of Commerce grant. This grant is still under review and has yet to be awarded. In addition, the District used this same information to apply for a Rural and Small Schools grant that was not awarded, but the District can reapply next year when additional state funding is made available. The District is obligated to pay up to $45,933 for the audit to McKinstry if the energy cost saving measures meet the criteria and the District chooses not to use McKinstry in performing the improvements.