Kent School District officials last week instituted a spending and hiring freeze to help curb an estimated $15 to $20 million budget shortfall.
The freezes, which are expected to save the district up to $4.5 million a month, will last through August and help ensure a positive general fund balance going in to the 2017-2018 fiscal year, which begins Sept. 1.
“While the district will honor all current contracts, non-essential spending has been curtailed and any new contractual arrangements or cost impacting spending or event planning is being carefully reviewed at the district level,” district spokesman Chris Loftis said in an email. “This will impact schools and departments in many ways but should not have significant impact on the exceptional teaching and learning in our classrooms.”
Mike Newman, the district’s chief business officer, outlined the freezes in a April 6 meeting with the district’s leadership team, which includes principals. Superintendent Calvin Watts sent an email to district staff on April 7 explaining the changes.
“Over a year ago we identified challenging financial trends,” Watts said in the email. “Our KSD revenue streams continued to fall short of meeting expenditures, and we took quick and decisive action. The fiscal health of KSD made it necessary to institute a spending freeze last spring for the remainder of that school year. It was a good first cost-saving step. Earlier this year, we reduced our materials and supplies budget by 20 percent. These cost-saving measures made a difference, and we are still not where we want to be or need to be financially.”
Lower-than-predicted-enrollment growth and delays in resolving school funding issues related to the McCleary decision contributed to the shortfall, Watts said.
“At the same time, rising costs in materials and supplies, investments in programs, lowered class sizes, new or replacement equipment and regular increases in compensation have added significantly to our annual expenditures,” he said.
The hiring freeze means that no open positions for the current school year will be filled. The district is not laying off any employees, and all current staff will continue to be paid.
“If there are responsibilities that need to be done, people are going to have to wear some different hats because we cannot afford to hire any more people,” Newman said in a video of his presentation to district leadership.
The district will hire new employees for next school year, although each position will be looked at closely before it is filled.
“Since our personnel costs account for over 85 percent of all expenditures, regular evaluation of staffing patterns must remain a key strategy to remaining a sustainable operation,” Watts said.
The spending freeze stops the purchase of all non-essential materials, supplies, textbooks and software, as well as out-of-district travel not already approved, overtime, extra hours and special projects. The district suspended purchasing cards used by schools and departments for incidental expenditures.
“Necessary repairs and facility maintenance and services required to keep students, staff and buildings safe will continue,” Watts said. “All required assessments and testing as well as the scheduled mandatory categorical program spending requirements will be done.”
The district will continue to provide transportation and breakfast and lunch to students.
The spending freeze only affects the district’s $346 million general fund. The tech levy, capital projects, transportation/vehicle, debt service and associated student body (ASB) budgets will not be impacted.
A $252 million bond measure approved by voters in November for capital improvements, including the construction of two elementary schools, cannot be used to cover operating expenses, Watts said.
“Our bond revenues are restricted to capital projects and cannot be used to hire staff, or pay for instructional materials or other important expenses needed for the daily operations of our schools,” he said.
The district plans to provide more information about the freezes and the district’s financial situation at public meetings later this month.