001Good evening everybody and welcome to this work session of the Tigard Tualatin School District Board of Directors. Today we're going to um have our work session about proposed budget reductions, always a fun topic. So I'll turn it over to our superintendent. Take it away. Thank you very much. Um this presentation is actually the financial update. And then I'll have um uh the the the purpose of this presentation is really to give you some of the details related to our finances that then will support the presentation I give in the the general business session about our reduction in force plan. So with that said, I will um pass it over to our CFO, Director C. All right, thank you and we could launch the presentation, please. Oh, other one. Sorry, there's two tonight. All right, and
002thank you everyone for being here. Um we will So throughout the year um we've tried our best to provide budget updates in real time. Starting with how the long legislative session ended at the at the state of Oregon. We noted some final end of session internal reconciliation at ODE regarding how they were going to support specific grant problem um grant programs, excuse me. We then um entered the summer with the passage of House Resolution number one, which was the federal government's tax um overhaul, which had ripple effects through Oregon. At least initial assumptions, if you go back and read the Department of Administrative Services updates, at one point we were anticipating a $900 million budget hole to fill. And so, we've been attentively listening to economic quarterly updates, and we've seen that that original deficit
003has been chipped away, sometimes with one-time funds, part of reconciling the prior year budget, and then um during the short session, there was actually a decoupling of part of the federal tax reform, which will provide some revenues to the state, but there still is a potential hole. So, um that brings us to our school district. We were able to review the um current enrollment for Tigard-Tualatin this fall. We did miss our um enrollment projection. Again, our demographer noted other Washington County, North Clackamas, or sorry, Clackamas school districts experiencing unexpected dips, whether that was related to white-collar professional layoffs that happened at some of our larger industries. Um But, you know, we noted that, and then, of course, we like to look at our cohort change, noting that last year's senior class was at about 180
004students larger than our incoming kindergartners. So, all of that comes into play as we go into the second year of the biennial budget and talk about our anticipated 2026-2027 budget figures. So, here are a couple of um components just affecting our district. As I mentioned, we continue to see a decline in enrollment. Oregon has budgeted for 1/2 of 1% decline in enrollment, although you might have seen in the fall article um with the Oregonian that actual enrollment decline is about 1% statewide. So, we see them trying to exercise conservatism in how they're allocating weights system-wide. But, you know, our um decline was about 3% from the prior year. We continue to experience inflationary cost factors. I think we thought we were kind of seeing a cool down, then with current geopolitical events, all of a
005sudden we're again, you know, the PGE bill increase was planned, but there's other things that we're seeing that um are starting to rise again. And then again, I, you know, added to our slide this year, inadequate state and federal funding. We were chattering about title, you know, that was something that with the HR1, um not necessarily HR1, but the federal government's budget, there was a lot on the line in terms of IDEA, um there was more specifically certain title programs being all out eliminated. So, thankfully, the bipartisan um proposal from the Joint Education Committee saw some stability, but when we look at less than 1/2 of 1% increases nationwide for IDEA and Title I, we know that with roll up costs, that that is budget dust. And so, that is something that has impacted our
006school district as we have those programs and they're significant components of our special revenue funds as we saw last week when we shared a detail with our community budget work group. We also have unfunded education requirements. Um you know, I would also say unfunded labor relation requirements in terms of certain benefit programs for employees, but um thankfully, we were able to make it through the short session without too many of those, but we continue to grapple with things like paid family medical leave and unemployment during the summer and then just other components. We don't even know what's quite on the horizon with the education accountability act. And then finally, we continue to see an increase in student needs and special education legislation. So, that's setting us up where um some of the larger um trends
007impacting the district. Here is our updated staffing and enrollment graph. As we talked about last May during the budget message, Tigard-Tualatin hit its all-time high of student enrollment in the 17-18 school year about 12,552 students and we were staffed with approximately 1,190 staff. We have since um declined post-pandemic yet staffing has um increased at about 1,271. I do like to point out though that we do need to acknowledge that the um integrated guidance and the student success act was a significant investment in Oregon schools and so we should see some like you know we did increase programs and create special positions. So there were some more funds but specifically as we start talking about the general fund we um can take a look at staffing at that level but our fall count was 10,738 students
008the first week of October and that's what our demographer used to project future years. I like to talk about FTE because last to me we shared a few slides about what had happened budgetary being approved and then what actually happened at the schools and with FTE being a significant component of the school's budget I just want to make sure we're being transparent. So our budget of FTE among all funds was 1,263.21 and um we are currently at 1,274. Um three and a half of those positions are related to the bond program. So those weren't originally included in the budget but those have been added. We've also had um a couple special revenue programs such as food service um or other grants um increased staffing and then you might remember we did go above our reserve
009and hired three additional teachers to address class size specifically at the elementary school. So we're about 10 more than budget but of course now we um are under a budget freeze and so we're not filling many of our vacancies that we might be having. Uh this has been an updated slide based off of the impact of a long legislative session. So we had a preliminary slide last year, but these have since been trued up. So since 2001, you know, um Director Zerschme d maybe two meetings ago commented that the state of education finance isn't really new. We continue to see a perpetual decline and even though we're thankful for the um Student Success Act and the additional funds we see, we can see that um for the 25-27 biennium that combined those uh the K-12
010allocation and the Student Success Act funds only comprise about 34.6% of the combined general fund and lottery funds. So um that is the reality we are living with as we provide services to students. So as we talk about reductions or just even balancing the budget, one of the first and foremost things we do consider is our reserve policy. The board has an established policy versus DBDB of 12% of operating revenue. So that's all resources except the beginning fund balance. So um it's comprised of three components, 5% for what you would consider a true ending fund balance, a 5% rainy day reserve, and a 2% operating contingency. We have habitually seen that decline in the 25-26 school year the board approved um operating at a 7% fund balance, which is the ending fund and the contingency
011together. So you can see how much we um drawn down since 2021. And um based off of our we're projected to end 26-27 at 8 and 1/2%. That's partly because of our improved results last year, which we're allowing to flow through to the fund balance, but then again to as we talk about um the district's plans, we do plan on um going to 7% again for 2026-2027. And then again this comment precedes me, it was inherited in the slide decks. At some point the board has um expressed a position that um 6% is the lowest the board would ever consider, which would be a 1% contingency fund and 5% ending fund. All right. So, this just shows how our um general fund is spent per student. So, that $196 million is our general fund um
012with the supplemental budget that the board approved in February. So, we can see um $16,738 per student not including fund balance, contingencies, or reserves. And of those functional costs, 84.2% is spent on staffing. So, a little less than last year, but still highly leveraged in personnel. So, as we talk about the 2026-2027 budget, um we talked about budget assumptions at our last meeting back in March. Uh we specifically saw the district fall out of correlation with the rest of the state in terms of district enrollment. We had initially mentioned that if we exceeded the state's um decline by 1%, that would be about a million dollars. The state though only recognizing a half of percent decline doubled that impact. So, that's why when we look at specifically revenue assumptions, we're about $5 million less than
013we were anticipating last May. Meanwhile, um you know, as we're planning ahead for the 2027-2029 biennium, we know that we still haven't There's still unremedied impact of HR 1. Most school district side accounts will expire, which provides rate relief, and that there are just other economic factors at play, um which means that our 2027-29 um biennium will also be have some challenges to address. So, we're going to go over the reduction plan, and you have a summary of that in front of you. At a high level, though, um we're approaching this um 5 and 1/2 million dollars among three different tranches. The first is a staffing net reduction, which is about 3.6 million dollars and accounts for 65% of the um solution to bridge the gap. So, we'll see here with licensed um the plan
014includes a 2.2% um total workforce when we look at those FTE. So, between um you know, part of Excuse me. One of the nice things about using ratio-based model modeling is that um when a school or a program declines, that school or program is adjusted, but it works the other way. That um when schools grow, there's also additions. So, what we'll see specifically in licensed is that there's some instructional and non-instructional reductions, some of it through ratio-based applications, and then others through program redesign, but we also have some additions. And specifically, um it's after hearing principals and just talking about the need of instructional coaches, that's one of the um things we're excited to propose to bring back. We also have some classified reductions, two of which are currently posted vacant, and I know Director
015Reed might talk more about actual staffing impact of this at a later time, but that's offset by ratio-based additions of 1.25, so a net change of 5 and 1/2. And then our manager group, so this doesn't include licensed administrators, has a net change of one, so at least proposed at this time. The remaining reductions, um, in terms of reducing expenses, are delineated here. Those comprise about $912,000 and are 17% of that $5.5 million uh, um, proposal. So, we can see school supplies and services being reduced, um, by a 5% and then we also have some partnership contracts that we're proposing reworking, a district office supply and service reduction, um, changing how we participate in the diverse educator pathway, and then renegotiating terms with our pending transportation contract. And then finally, that remaining amount, we are,
016um, if we've implemented a budget freeze, we anticipate some revenues to be better than for our current forecast that you'll see in the board packet. But, um, that like tightening up 25 26 and then cabinet continuing to do an ongoing program review will, um, bridge the remaining million dollars as we welcome students back next fall. So, this is, um, I know this will be detailed later tonight in the board report, but, um, for staff to, um, be proposed to reduce, the board would need to call a reduction in force, and we've delineated the two processes for both licensed and classified staff. As their contracts contain certain language about that. Are there any questions or I can go back to a slide if you'd like to take a look at it. Like general questions or specific
017questions based on what you were what you were looking at cuz um I wanted to see if if you go back one slide. Uh one more, sorry. Oh, sorry. Thanks. Oh, no. Sorry, Thor. Could you please show slide number I'm sorry about that. That. Yeah. Uh so of course you know I was going to ask about the diverse educator pathway. Uh I'm wondering what that reduction in that is for and if and how much uh are we left? Are we still participating in that or if you could just give me more details on that? Yeah, for the trajectory. Sure, I can uh answer that for you. Um so uh with the diverse educator pathway, much of that is what we use for um the student uh scholarship portion where they would do summer work um
018which they get a certain stipend for that. And then also another part of that is for staff. Um at this point in time uh two things are happening. One, we're in we have been just reducing. And so we are unable to really place staff into positions because we just don't have the space. So we're investing, but we have nowhere to put them. So therefore that investment goes somewhere else, right? Um the other piece in our recent um uh agreement with the union over the reduction in force, uh you know, we have the the law the HB um that allows for us to um keep linguistic um and cultural expertise and it gives three criteria. Um you know, one of them being linguistics. Uh the other one is a pathway. And then the third one which
019we tend to say that everybody has is that you work with you know a group um that has high needs. Well, um the union was not in agreement with um accounting for the pathway. So, even if we got someone in, the reduction in force um would not They would not be protections for those that are in pathways. So, right now we have to think about how we will get at that differently. Um we are still able to provide support services to individuals in terms of like application, you know, how to apply, programming support. Um we're able to do those pieces, but we are not able to provide the financial aspect um at this time. Does that reduction then eliminate the program essentially or is are still It eliminates the the financial support, but it does
020not eliminate the technical support on like navigating processes and uh programs. Okay. Thank you. Yeah, I have a very similar question about a few other of the areas. So, the family partnership advocates, um I see a reduction of one. What percentage of that of our existing family partnership advocates is that? How many do we have currently that we're reducing one from? I just want to get a sense of the scope of the reduction. Is it like one out of 10, one out of 20? Yeah, so we have about um 11 and it's going to bring it down to 10. Okay. And then similarly for the culturally responsive liaison and coordinator, is are those the only two positions we have like that or are So, those are good questions. So, actually those positions are being eliminated
021out of the general fund, but then they're going to be covered by a different funding source, a grant, for those positions. So, just look at it that way. Yeah, we still have the the people, just they're going to be covered under a different um funding source. Okay, that makes me very happy. And then finally, um with the building specialists, the two floating building specialists, how many building specialists do you have? >> So, those are unfilled positions. Okay. >> There's no one in them. Perfect. That makes the cuts a little bit easier to swallow. Thank you. Yes. And a lot of these cuts I'm sorry. Mr. Chair, a lot of these cuts will will um be absorbed through attrition. Or the majority of them. I know we've had difficulties um with transportation services before, so just
022interested in um how we're able to save $200,000 on transportation. Not that I'm not all for it if it can be done. I'm just I'm just curious. Yeah, that's an operational cost that I'd have to go to Director Montagon and get back to you on. Okay, no problem. I've been working with that. So, we'll bring the contract to the board. So, we went out for bid and um you know, a lot of times when you're reestablishing a contract, um most of the responders like offer a new fleet. So, um with consultation with our council, after we um started contract negotiations with a successful proposer, we started to ask about how we might be able to see some efficiencies and specifically in their monthly fixed cost. So, switching our bus ratio from 84 passengers to 77
023passenger buses, looking at potentially um reviewing routes. We're not at this point like recommending reducing routes, but reviewing those and then um specifically, you know, a lot of our buses sat idle for about 2 years because of COVID. So, our initial useful life of those buses are actually in really great shape. So, just even deferring the fleet maintenance for a couple of years, we'll be able to see annual savings in our fixed cost. Okay, thanks for all your work on that. Yeah. And everyone else that contributed. Yeah, thank you to Director Jarvis. Well, you asked a couple of them, so that's great. Also, because I love thinking of things in new ways, thank you, Len, for explaining the idea around we're investing in people that we can't then actually placed, because I think that's one
024of those things that we don't kind of see the other side of, and that's super helpful. Um so, thank you for that. Um relative to a couple of the And if this is something that's like TBD, or you'll explain more later, you can say that, too, but I was curious about the health center reconfiguration kind of program redesign, and sort of what that might look like, and then relative to some of the um the partnership contracts, is that like Urko? Is that some of those CBOs that we will be either find And And then I guess the follow-up question is, will those be covered by any of the grants that you were mentioning kind of before that we might be able to find funding for from another bucket, or are those going to be just
025reconfigured, or kind of closed for now? So, I can't really speak to the partnerships. That is part of the equity department, and Xenia be able to answer that. Um but it is Urko, like for example, is one of them. Um I do not I am not aware of those being covered by other grants, but we would need uh Dr. Antu to explain that. And then you had What was your other question? >> The What the program redesign, or reconfiguration of the health center piece. You want to take that? Go ahead. Yeah, so we're just in initial conversations. So, specifically, one of our two health centers requires financial support, and that used to be paid out of a special revenue fund, which has been depleted over time. And so, this was something that was going to
026be absorbed through the general fund if it was going to continue. So, we're in really preliminary operate um discussions with the group. One of the things we note though is that um specifically that center offers some ancillary services that aren't required by the school, like aren't required of a school-based health center. So, the financial payment we pay helps provide those services. And then, the other thing that they're workshopping is looking at hours of operation. So, no final decisions made as we're still trying to meet with community partners and put together balance the budget. Though, that's that's one of the things we've started to consider. And specifically wanted to run by parents last week at the um community budget work group. Thank you. Can we go back to the staffing and enrollment slide? Um just wondering
027what our thinking is. We've lost, you know, 2,000 or so students. And yet, our staffing kind of like it was going up. I can't see the graph from Yeah. Yeah, so enrollment's going down, but staffing is still either constant or increasing. I know you probably can't I mean, maybe you can offer some uh guidance based on what you know now, but um shouldn't we be seeing the trend like kind of mimic enrollment? Yeah. That's the That's the idea. And And I'll um give a broad overview and then allow HR and and um our CFO to respond as well. So, in 2021, that's when we across the state we received ESSER funds. And with those ESSER funds, a lot of that was not ported There was limitations on what you can spend that money on. So,
028most districts poured their money into staffing, knowing that at some point that ESSER money would sunset. And when that money sunset, um we would have to find a way to um trim down the number of staff members that we had because it wasn't sustainable. The same time, we um some anticipated enrollment going down as much as it did, but not didn't really anticipate the impact that the loss of enrollment would have. So, we're hiring people to mitigate learning loss. Um we're hiring um extra support staff in in classrooms to support students with their transition back to school, whether there's a level of behavior acuity or academic needs. And those all really added up. And so, what we've been trying to do for the in the time that I've been here since it sunset, that basically
029the year I arrived, is to gradually taper down on the number of staff that we have. Some of it is reflected in our ratios. So, um our ratios are are favorable um compared to probably what they were several years ago. Um we do know that having lower ratios are probably beneficial to students, but at the same time, what we have right now doesn't appear to be sustainable. Um we're also looking at um programmatic reviews really thoroughly in terms of what our students' needs are now, especially moving future forward between, you know, 2026 and 2029. And then we'll modify what those positions are. We've seen that reflected in the number of instruction centralized instructional doses that we've had in the last few years, but it's something that we need to continue to use data, community input,
030um input from our leaders, and of course the board to make um really intentional decisions around how we're going to reduce the number of staff and still maintain um a high-level instructional services for our students. Couple questions. Um, I I just want to check. It sounds like there's there are no plans to fully close either health center though, right? So, um, what's going to happen I believe is the board's going to take a vote on some information related to the health center. Um, right now, uh, if we withdrew our funding from this the health center, uh, it we don't know if that the health center would be able to stay open or not without our our our support. So, that's something, um, maybe Director C has more information on. Yeah, we're actually meeting with them
031tomorrow. Um, so, you know, they've also experienced a decline in funding with um, different grants and opportunities. And so, without making a commitment on their behalf, um, at least the third first pass was that, um, the financial support the district provided helped, um, maintain all of like their current service hours and the level of services. So, it could be that it would be open for a fewer hours with fewer services. We're still discussing the impact. Okay, thank you. Um, and then my other question, I think this isn't the first time I've seen this, uh, these slides. Um, I believe there might be a slide on, um, classroom sizes. Um, and so, looking at this graph, this is looking at, um, enrollment versus all staffing, which includes a lot of different roles. Um, I believe the
032class sizes are not changing significantly with these adjustments. Is that correct? We only made, um, adjustments in grades three through five, increasing those by one. And that was the only bit that occurred. Okay, thank you. Do we So, I know that we are expecting to, um, mitigate some of the impact with attrition. And do we have any idea at this point or when might we have an idea about Is that the million-dollar question? And how much that's going to how much attrition we're going to have? I can tell you that all of the elementary classroom is absorbed through attrition. Um and including the reduction to behavior specialist, um we can uh move those individuals into positions. Um these are individuals that have uh learning specialist endorsements, so and we have openings, so we'll be able
033to absorb those. It's going to be the secondary. Um there's going to be some positions, and I think that's where we'll have some actual individual impact, but other than that, um you know, the the the dean role, all of those things can be absorbed. Does anybody else have any questions, comments, concerns? All right. Well, in that case, thank you so very much for providing us all that information. It's not good to see, but it's good to know um what the plan is going forward, and we will uh readdress this during our regular meeting. And so, for now, I will adjourn this work session, or recess, excuse me, um until our regular meeting at 6:30. Yep. We'll collect these from the school level.