The Oak Harbor School Board approved its 2010-2011 budget on Monday, Aug. 30, and has already began preparing to tighten the district’s belt by several notches next year.
The 2010-2011 budget includes an ending fund balance of $2,039,895, which is about $1 million less than last year. And that’s not the only reason for concern.
Gov. Christine Gregoire said that after September’s dismal state revenue projection, she may have to cut or eliminate state levy match, which means Oak Harbor could lose $800,000.
Additionally, the federal Impact Aid funding level has not yet been approved by Congress, and Superintendent Rick Schulte thinks it may be frozen at the 2009-2010 level, causing a $500,000 cut in revenues.
Meanwhile, expenses have increased in multiple areas for the district. Utility costs have gone up, but the district hopes to balance that expense through new energy conservation strategies. Furthermore, because the state is decreasing the employer’s contribution rate into retirement funds, freezing staff salaries and increasing monthly health premiums, insurance costs for Oak Harbor have gone up by nearly $65,000.
The district has again avoided laying off staff, but will nevertheless see a reduction through attrition.
“Overall, I think we’ve done a really outstanding job,” Schulte told the school board. “We will be experiencing the downside of reduced staff, but we have been able to do that without laying off people. We’ve been fortunate to have a cooperative staff. We have people doing new things, and people doing things they haven’t done for several years.”
In a message to the board, Schulte described the budget as fiscally sound but unsustainable without new resources.
“Expected reductions in Impact Aid revenue, categorical programs revenue and reduced enrollment revenue will interact with increased unfunded expenditures for utilities, retirement, salary and health benefit increases to make future budgets more difficult,” Schulte said in a written report. “Unmet needs remain in maintenance, classroom instruction and staff compensation. The end of stimulus funding after two years is expected to require further staff and budget cuts.”
Board members believe next year’s budget shortfall could be severe and therefore are trying to remain flexible.
The district is proceeding with construction projects. The next big items on the district’s capital projects list regard the transportation office, garage and bus yard and replacing Oak Harbor Elementary.
