Kent School District leaders are using federal relief funds and plan to count on employee attrition to help cover its general fund shortfalls over the next couple of years.
The Kent School Board heard during an April 27 budget work session by Ben Rarick, district executive director of budget and finance, that Congressional funds approved as part of the American Rescue Plan Act in response to COVID-19 will help balance the budget that was $16.7 million short in January due to higher revenues than expenses.
For February, the fund balance is back up because of the district’s use of federal funds known as elementary and secondary school emergency relief fund or ESSER. Kent will receive nearly $100 million in those federal funds, distributed over four allocations. The district has until the end of the 2023-2024 school year to spend the money.
“As it’s shaping up now, ESSER funding will support us through the end of the 2023-2024 school year,” Rarick said. “In 2024, the problem gets real immediately.”
That problem of expenses exceeding revenue caused massive problems for the district in 2017-2018 when its fund balance dropped to a negative $6.9 million.
The district’s sitting fine right now with a February fund balance of $51.9 million, up more than $10 million from January. Th district’s use of $14.3 million in federal relief funds boosted the budget.
“We are in a strong situation and we want to try to stay that way rather than repeat some of our past stumbles in that regard,” Rarick said.
That’s why district staff proposes to reduce classroom teachers by about 42 positions through attrition for the 2022-2023 school year. If enough teachers retire, go to other districts or leave the profession, the district won’t need to fire anyone.
District staff expects to reduce about 30 positions at the elementary level and 12 in the middle schools with fewer students at those grade levels. Enrollment has remained steady or up at the high schools, so at this point those grades will retain the same number of teachers.
Rarick said not replacing lost staff will help toward a stronger financial picture when federal funds run out.
“It’s a thoughtful step down approach,” he said. “We could go more deliberative (make job cuts), but we want to preserve (more staffing) as well and long as we can.”
Rarick said it becomes a debate of waiting until 2024 to make large cuts or take smaller steps over the next two years to reduce staff costs.
Prior to Rarick’s explanation that steps need to be taken prior to 2024, Board President Leslie Hamada had asked how much time did the board have to make moves.
“I am focused on the future,” Hamada said. “We are going to be cautious about staff, but funds are coming to an end, so at what point do I get nervous?”
A drop in student enrollment is leading to fewer dollars for the district as state funds are based on enrollments. As of February, Kent is at 23,680 students, a drop of 1,819 students from two years ago.
District staff projected an enrollment increase for this school year, which also impacted the budget.
“The thought was we lost students due to closed buildings (because of COVID-19),” Rarick said. “We thought we would get students back because we would open buildings, but it took longer to open and we didn’t see an increase when we opened.”
Director Michele Bettinger had concerns about the focus on attrition rather than trying to retain teachers.
“I have a hard time with attrition, which means losing teachers,” Bettinger said. “I have a hard time with how attrition meets our core requirements.”
The board will have a third work session June 22 on the 2022-2023 budget when Rarick said the numbers on expenditures and fund balance will be updated. The board is scheduled to adopt a budget Aug. 24 prior to the start of school in September.
Public hearings about the budget will be set for late June and in August, Rarick said.