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Budget News

Board Adopts 2014-15 Budget, Saves Taxpayers $6.5 Million by Refinancing Debt

At their meeting on Tuesday, June 24, 2014, the Hillsboro School Board unanimously* adopted the 2014-15 budget, which adds $6.2 million for hiring teachers, providing additional classified support, and adding one instructional day back to the calendar, among several other things.  (*Director Cañas was not present at the meeting; the vote was 6 yes, 0 no to adopt the budget as presented.)

 

In the same motion, they set the Permanent Tax Rate (property taxes for education) to support the General Fund, and set the Debt Service Levy amount (additional taxes to pay off previously approved bonds) to support the Debt Service Fund.

 

Notable is the Debt Service Levy, which is higher than initially proposed due to an opportunity to refinance a portion of the District’s outstanding bond debt at a significant long-term savings to taxpayers.  When taxpayers approved the District’s last bond in 2006 for the construction of new schools, those bonds were sold in two series: Series 2006A and Series 2006B.  The Series 2006B bonds are structured as “callable deferred interest bonds,” so they may be prepaid prior to their maturity dates, which are currently in 2025 and 2026.  Refinancing those bonds now will save taxpayers approximately 34% or $6.5 million in net present value (NPV), and can be accomplished while keeping the total bond levy rate stable for the next four years.

 

“It is very exciting and rewarding to adopt a budget that begins to restore funds to our system,” notes Board Chair Kim Strelchun.  “Having the opportunity to refinance outstanding bond debt to save taxpayers money is another bonus—it shows the District’s fiscal responsibility and provides predictability to our community over the next four years.”

 

(Click here to see more information about the bond refinancing.)

 

Board Approves 2014-15 Calendar Change, Will Postpone Budget Adoption

At their meeting on Tuesday, May 27, 2014, the Hillsboro School Board unanimously approved a revision to the previously adopted 2014-15 school calendar to restore Friday, March 20, 2015, as an instructional day.

When the District was budgeting for the 2013-14 school year and looking at forecasts for the biennium, it was considering negotiating with the licensed employee union to achieve five furlough days in each of the 2013-14 and 2014-15 school years to make up for anticipated budget shortfalls.  However, Gain Share money received from the City of Hillsboro and Washington County allowed the District and union to agree to just two furlough days each year.

 

Over the course of the winter and spring of this year, the cumulative effect on the District’s 2014-15 revenue—as a result of last fall’s Legislative Grand Bargain, a revision to the poverty calculation for schools, and updates to the 2012-13, 2013-14 and 2014-15 State School Fund estimates—became clearer.  By mid-April, calculations indicated the District would have revenues that were $6.2 million in excess of expenditures.

 

On Thursday, May 8, the Hillsboro School District Budget Committee, composed of the Hillsboro School Board and an equal number of appointed citizens, unanimously approved the 2014-15 proposed budget, which included allowing the District to add back one of the two furlough days to the calendar, hire teachers, and provide additional classified support, among several other things.*  That night, they also set the Permanent Tax Rate (property taxes for education) to support the General Fund, and set the Debt Service Levy amount (additional taxes to pay off previously approved bonds) to support the Debt Service Fund.

 

The following week, the District was contacted by its underwriter about an opportunity to refinance a portion of the District’s outstanding bond debt at a significant savings to taxpayers.  When taxpayers approved the District’s last bond in 2006 for the construction of new schools, those bonds were sold in two series: Series 2006A and Series 2006B.  The Series 2006B bonds are structured as “callable deferred interest bonds,” so they may be prepaid prior to their maturity dates, which are currently in 2025 and 2026.  Refinancing those bonds now will save taxpayers approximately 34% or $6.5 million in net present value, and can be accomplished while keeping the total bond levy rate stable for the next four years.

 

To satisfy procedural guidelines around actions of the Budget Committee and public notification in advance of the Budget Hearing, the District will reconvene the Budget Committee on Tuesday, June 10, to discuss the refinancing option and corresponding new Debt Service Levy amount, and then will announce that the Budget Hearing will take place on Tuesday, June 24.

 

Board Ratifies Agreement with Teachers, Adds Three Days Back to Calendar

At their first meeting of the 2013-14 school year on Tuesday, July 23, the Board voted unanimously to ratify the tentative agreement with licensed staff and add three of the proposed five budget reduction days back to the school calendar.

 

The District has been negotiating with the teachers’ union, Hillsboro Education Association (HEA), since December 2012 for a successor collective bargaining agreement to the one that expired on July 1, 2013.  On July 15, 2013, the District bargaining team reached a tentative agreement with HEA for a new three-year contract.  The main points of the tentative agreement are as follows:

  • 2013-14
    • Step movement for eligible employees.
    • Eliminate current Step 2 of the salary schedule and create a new top step that is 2% higher than the current top step.
    • Two budget reduction days: November 27, 2013 and March 21, 2014.
  • 2014-15
    • Step movement for eligible employees, beginning with the 5th paycheck of the year.
    • Addition of 2% to the new top step of the salary schedule, making it a full step.
    • Two budget reduction days: to be identified.
    • Addition of $25 to the insurance cap, raising it from $1,050 to $1,075.
  • 2015-16
    • Salary and insurance re-opener to coincide with the new biennium.

There were also several changes to the language of the contract, including the District’s ability to transition to electronic personnel files and the addition of four hours for elementary fall conferences.  For more information on the language changes, please see pages 61 and 62 of the Board Packet.

 

The initial budget proposal for 2013-14 included five budget reduction days to help address the District’s revenue shortfall.  On June 6, Washington County Board of Commissioners Chair Andy Duyck and Hillsboro Mayor Jerry Willey held a joint press release at which they indicated their willingness to devote $10 million of their Gain Share* money for the next biennium to Washington County Schools.  Hillsboro’s portion of that allocation will be approximately $1.2 million in 2013-14.

 

Gain Share money, in addition to a portion of the savings from licensed staff retirements, was used to add three of the five proposed budget reduction days back to the calendar.  The remaining savings from licensed staff retirements, along with delayed step movement in 2014-15, was used to pay for the creation of a new step on the salary schedule and add to the insurance cap.  Therefore, all changes were affected within the previously-budgeted amount for licensed staff in 2013-14 and 2014-15—a great result.

 

The District is extremely grateful to the City and County for their willingness to devote Gain Share money to schools.  Maximizing our students’ instructional time is of the utmost importance.  Students will now be in school 173.5 days in 2013-14 (172 for elementary students).  Oregon’s guideline for number of school days is 175, which is approximately 4 days short of the national average of 179.  Thanks are also in order for all members of both the District’s and HEA’s bargaining teams for the hard work, dedication, and spirit of collaboration with which they approached negotiations. 

 

*Gain Share is money that local taxing authorities receive back from the state as a result of tax abatement agreements with large employers.  In Hillsboro, both Intel and Genentech have entered into Strategic Investment Program (SIP) agreements with the City and County, allowing them to pay less money in taxes in exchange for their significant investments in their physical plants.  The income tax collected from employees who are new to those companies as a result of the investment is held separately by the state—half is kept at the state level, and half is returned to the local taxing authorities.  For more details, please see the information sheet on Washington County’s website.

 

 

Budget Committee Approves 2013-14 Proposed Budget

Use of $2M in discretionary reserves will save teaching positions

 

At its meeting on Thursday, May 9, the Hillsboro School District Budget Committee approved the proposed budget for the 2013-14 school year.

 

The Committee, which is composed of all seven members of the School Board and an equal number of appointed citizens, listened to information presented by administration and asked questions over the span of more than two hours before voting unanimously to approve the budget and impose and categorize the tax rate as defined by law.

 

As presented, the Proposed 2013-14 Budget did not include the use of any discretionary reserves to help fill the $8.5 million gap between revenues and expenditures.  However, after reading his budget message, Superintendent Scott, acting on feedback and suggestions received from members of the Budget Committee, recommended that instead of using $2 million of discretionary reserves toward completing high-needs facility maintenance projects, those projects instead be paid for out of Construction Excise Tax (CET) funds, and that the $2 million from reserves be used to offset increases to the staffing ratio—which had been proposed to go up to approximately 31:1 with a loss of 38 full-time equivalent (FTE) licensed positions.  The $2 million infusion will save approximately 22 FTE licensed positions, for an overall loss of approximately 16 FTE licensed positions due to increases in the staffing ratio (commonly referred to as class size).  The other recommended reductions to licensed staff, totaling 12.2 FTE will not be affected; therefore, the total proposed licensed FTE reduction is 28.2 (down from 50.2).

 

Human Resources will now revise staffing allocations accordingly and re-release those to schools. 

 

The School Board still needs to adopt the Approved 2013-14 Budget; this is anticipated to occur at their June 11 meeting.  It should also be noted that the Legislature has not yet approved the 2013-15 K-12 budget, which could come in at, below, or above the $6.55 billion number our proposed budget was based on.  In addition, the five furlough days included in the proposed reductions still have to be bargained with our licensed employee union.

 

2013-14 Draft Budget Information Shared

Approximately 35 people were in attendance at the Listening Session at Brown Middle School on Thursday, April 25, to hear Superintendent Scott explain the projected budget realities for 2013-14. Click here to see the presentation he shared.

At an assumed statewide K-12 funding allocation of $6.55 billion for the 2013-15 biennium, along with $200 million in PERS employer rate reductions, Hillsboro School District is looking at a gap between revenues and expenditures of nearly $8.2 million next school year. This will be the sixth straight year of cuts for the District, which has reduced $61.3 million from its General Fund budget since 2008-09 to deal with shortfalls.

A list of the recommended reductions is available here. It is likely with this proposal that the District will go into layoffs; the full extent of the layoffs will not be known until all resignations and retirements have been received and Human Resources has a chance to determine staffing implications.

The public is reminded that the Legislature has not yet finalized the budget and there is still time to advocate for additional K-12 funding. Please contact your elected officials to let them know your position on educational funding.

 

Join Superintendent Scott and our Local Elected Officials for an Education Town Hall 3/21

 

Join Representatives Ben Unger and Joe Gallegos, Senator Bruce Starr, and Superintendent Mike Scott for an Education Town Hall on Thursday, March 21, from 7-8pm in the Century High School Lecture Hall (2000 SE Century Blvd., N225).  Learn more about the progress of the 2013 Legislative Session, bills that would affect education, and current thinking around the statewide K-12 budget allocation for 2013-15.  Questions will be taken via lottery system; Spanish translation will be provided.

 

 

Sequestration Update - March 8, 2013

The Oregon Department of Education sent out this update on the status of federal-level sequestration today.  It appears that sequestration cuts of 5% will affect our funding for IDEA (special education), Title 1 (low income) and other programs in the 2013-14 school year if nothing to reverse sequestration takes place in Congress.  If reductions are also made to the funding allocation for these programs (as compared to 2012-13 funding levels), the estimated net effect could be reductions of up to 10%.

 

Superintendent Scott Releases Budget Message - March 5, 2013

Superintendent Mike Scott prepared a message in response to the announcement of the 2013-15 proposed budget by the Co-Chairs of the Joint Ways and Means committee.  The Co-Chairs' budget calls for a $6.55 billion revenue allocation, and an additional $200 million in PERS Employer Rate decreases, for K-12 education.  The proposed allocation would result in a shortfall of more than $8 million in Hillsboro in the 2013-14 school year. 

 

Legislative Priority Discussion and Advocacy Training Event

The 2013 Legislative Session is currently under way. Many bills will be put before elected officials that will either directly or indirectly affect education, so we urge staff, students, parents, and community members to familiarize themselves with the issues, understand where to go to track progress in the session, and know how to advocate if they so choose.

Legislators from both parties have expressed how important it is to their decision-making process to hear from their constituents, and it doesn’t have to be time consuming or intimidating to do so.

Please join us on Monday, February 11, from 6:00 to 7:30 p.m. in the Liberty High School library (21945 NW Wagon Way, Hillsboro 97124) to learn more about some of the top education concerns and how to effectively advocate for change.

Spanish translation will be provided, and patrons from surrounding communities are welcome to attend as well.

This is a non-partisan, information-only event.

 

Hillsboro Holds Legislative Briefing

On Wednesday, January 9, Superintendent Mike Scott and the Board of Directors held a briefing with local elected officials on the Board’s priorities for the 2013 Legislative session.

In attendance were Senator Bruce Starr, Representative Ben Unger, Representative Joe Gallegos, Representative Jeff Barker, Hillsboro City Council President Aron Carleson, Washington County Commission President Andy Duyck, Washington County Commissioner Greg Malinowski, Field Representative John Valley (U.S. Senator Jeff Merkley), and Field Representative Ryan Mann (U.S. Congresswoman Suzanne Bonamici), along with several staff, Board, and Budget Committee members.

Superintendent Scott kicked off the meeting by discussing the Hillsboro School District budget situation and projections for the 2013-15 biennium based on Governor Kitzhaber’s proposed allocation to K-12 education. He then shared the Board’s 2013 Legislative Priorities (to see the full Legislative Priorities brochure, click here or visit the Budget Matters webpage):

  • Support stable and adequate funding for education.
  • Support PERS reforms that are deemed constitutional, lead to long-term stability of the system, and value current, former, and future public employees.
  • Oppose or modify laws, mandates, or reporting requirements that do not come with the corresponding funding for their implementation.
  • Revise legislation that places an undue or unreasonable burden on public schools.
  • Support education funding at the federal level that aligns with mandated program delivery.

Finally, a brief discussion ensued around effective advocacy efforts. The elected officials in attendance agreed that the two most effective elements of advocacy are a common message, and personal stories from constituents.

The advocacy sub-committee, led by Communications Director Beth Graser, will be scheduling some information and training events in the coming weeks for parents, community members, and even staff who are interested in learning more and taking an active role in advocating for education in this legislative session. Stay tuned to the website for more information, or feel free to contact Beth directly via e-mail or phone: 503-844-1772.

Superintendent Budget Message 12/6/12

Following the December state revenue forecast and release of Governor Kitzhaber's budget for the 2013-15 biennium, Superintendent Mike Scott prepared a budget message for staff, parents, and community members.  The message outlines the Governor's proposal for K-12 education and what it would mean to the Hillsboro School District.
 

Board Adopts Priorities for 2013 Legislative Session

At their meeting on Tuesday, November 27, the School Board adopted five priorities for the 2013 Legislative Session: Funding—Support stable and adequate funding for education; PERS Reform—Support PERS reforms that are deemed constitutional, lead to long-term stability and sustainability of the system, and value current, former, and future public employees; Unfunded Mandates/Reporting—Oppose or modify laws, mandates, or reporting requirements that do not come with the corresponding funding for their implementation; ORS Restrictions—Revise legislation that places an undue or unreasonable burden on public schools; and Federal-Level Advocacy—Support education funding at the federal level that aligns with mandated program delivery.  These priorities will become working tools for conversations with elected officials from the Hillsboro area, and with legislative leaders in key committee assignments and leadership roles at the state and federal level.  The use of consistent priorities also makes it possible for individual Board members to participate in the process while maintaining a common voice with their fellow Directors.  Additional details are available in the 2013 Legislative Priorities document.

 

Board Adopts 2012-13 Budget, Tables Local Option Levy Ask


At its meeting on Tuesday, June 12, the School Board officially adopted the budget for 2012-13, which included a previously unexpected additional $852,271 from the state, and agreed that a local option levy should not be placed on the November ballot.

News of an additional disbursement of over $852K to the Hillsboro School District came just one day after the Budget Committee unanimously approved the Proposed Budget for 2012-13 in May. The money was a result of revised estimates to the 2011-12 State School Fund in three areas:
  1. Additional allowances for the number of students above the 11% cap receiving special education services;
  2. Additional allowances for students in Foster and Neglected Delinquent Care; and
  3. An addition to the per-student (average daily membership—weighted, or ADMw) disbursement due to declining enrollment in the state.
The additional funds were used to restore ten elementary teaching positions, which brought the average staffing ratio at elementary schools down from 30.6:1 to 29.8:1. These additional funds, along with response to an early retirement incentive and contract concessions from licensed staff members, a reduction of classified hours across the District, five reduced days from the 2012-13 calendar, and other reductions, allowed the District to balance its budget without laying off any non-temporary licensed employees. In addition, all classified employees were offered positions. This is an amazing result given the many years of consecutive budget reductions the District has faced as well as the dire situation districts around us are facing, and is a testament to the hard work and collaboration of all staff and Board members.

Prior to the regular session, Board members heard a report from consultant Rebecca Ball of DHM Research Associates on the results of a public opinion poll conducted to assess potential support for a local option levy ask in November 2012. The firm placed over 10,000 calls in the span of three days in late May to complete 300 twelve-minute phone surveys of registered voters who closely match the demographics that would be expected to turn out in our area during a presidential election.

The poll showed that just 51% of people would vote for a local option levy if the election were held today, while 43% would vote against, and 5% were undecided.

Additional questions revealed that a majority of people who indicated they would vote against the levy would do so because of personal financial concerns—they are against property taxes in general, have too many taxes, or don’t feel they could afford it. They also revealed that a majority of all voters are generally supportive of public education and are concerned about the financial situation our District faces. Finally, they indicated that people would like more information about how the District manages its finances and how any additional money would be spent before making a final decision about whether or not to support a local option levy.

Given those results, the knowledge that November will have a very crowded ballot, and that there is typically a “sucking effect” of support for ballot measures that increase taxes as elections draw nearer, the Board agreed with staff’s recommendation not to move forward with a local option ask at this time. They also agreed that a committee of staff, Board, and other interested parties should convene to strategize on how to better communicate with our community on the issues surfaced by the survey. If you are interested in participating on the communications committee, please contact Communications Director Beth Graser via e-mail or by calling 503-844-1772.


Budget Committee Approves Proposed Budget on May 10, 2012



The Budget Committee, which consists of all members of the School Board and an equal number of appointed citizens, met for their official review of the 2012-13 Proposed Budget on Thursday, May 10, at 7:00 p.m. in the Administration Center Board Room.  After electing a Budget Committee Chair, Helen Noonan-Harnsberger, the Committee heard the Budget Message from Superintendent Mike Scott, and an explanation of the information contained in the Proposed Budget from Chief Financial Officer Adam Stewart.

Prior to the meeting, Adam and his team received several questions about the Proposed Budget and provided answers, but there was also time during the meeting for additional questions and discussion.

Most of the discussion centered around the inadequacy of funds available for K-12 education throughout the state, an acknowledgement that we are trying to select the best of bad choices, recognition that the forethought and conservatism of past Boards has allowed us to mitigate the effects of continually declining revenues, and a desire to start the budget planning process even earlier next year and engage in tough conversations about what we will be able to provide to students moving forward.

The Budget Committee approved the Proposed Budget unanimously.  The Proposed Budget will now advance to the Board for an adoption vote on Tuesday, June 12, 2012; that meeting will begin at 7:30 p.m. in the Administration Center Board Room and is open to the public.  To see the detailed list of cuts for 2012-13, please click here.

Licensed Staff Negotiations Could Help With Budget Gap for 2012-13



A tentative agreement was reached with our licensed bargaining unit on Thursday, April 5.  That agreement has various components, but the most pertinent ones for the purpose of discussing necessary budget reductions for 2012-13 are the provisions for five reduced calendar days (already reflected in the adopted 2012-13 calendar) and a delayed implementation of step increases on the salary schedule for licensed staff members who are eligible.  Those items, if passed by the licensed membership and approved by the Board on April 24, will result in the following savings:

Savings from 5 day reduction - Licensed staff:      $1,608,469
Savings from delayed step - Licensed staff: 1,398,000
Savings from 5 day reduction - Classified: 539,366
Savings from 5 day reduction - Administrative & Supervisory/Technical  ___185,735

Total

$3,731,570

In addition, the budget for our online school, Hillsboro Online Academy, was revised to reflect a District contribution of just $125,000 instead of $200,000.  That $75,000 savings, added to the above, brings the total adjustment to our budget gap to $3,806,570, leaving a remaining gap of $4,343,430 for the Board and Budget Committee to consider.
 

Community Budget Meetings Being Held at Each School



As the spring has progressed, the District has gotten clearer about its budget deficit for the 2012-13 school year—$8.15 million.

In early February, all eyes were on the state’s March revenue forecast (released February 8) and the first even-year session of the Legislature for cues about the state of the budget.

The revenue forecast was down $35.1 million, which brought the total shortfall since the close of the regular legislative session in 2011 to $341.1 million. Since $460 million had been set aside by the state to absorb those shortfalls, the Legislature determined no further reductions to K-12 budgets were required for this school year; as long as the next five revenue forecasts of the biennium (ending June 30, 2013) don’t exceed that $460 million cushion, K-12 schools can be reasonably assured they will receive the money that was allocated to them for the biennium.

Based on that information, the District calculated the gap between anticipated revenues and expenditures for the 2012-13 school year to be $7.65 million. We also know we need to spend $200,000 on our new online school, Hillsboro Online Academy, and $300,000 for technology replacement in our schools, which brings the total shortfall in Hillsboro to $8.15 million.

District staff have been sharing information about the budget gap with our Board, Budget Committee, and principals, and our principals are now sharing information with their staff, parents and community members. We want to make sure all our patrons understand the state of the budget and have an opportunity to share their thoughts on system values and priorities as we endeavor to make reductions in the most responsible, sustainable way possible.

For more information and to see a list of school-based budget meetings, please review the presentations, FAQs, and other documents on this page.  Please also plan to attend our upcoming Superintendent Listening Session on Thursday, April 19, 6:15-8:30 p.m. at Poynter Middle School (1535 NE Grant Street, Hillsboro).
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