Silver Falls School District deficit likely worse than originally projected
The deficit at the Silver Falls School District will likely be worse than the $1 million that originally was projected, school board members were told during a special meeting to discuss the financial woes and removing a bond from the May election ballot.
Board members heard more during a March 21 meeting about the $825,000 deficit and unexpected expenses and learned additional revenue shortfalls had been identified.
“You are at over a $2 million shortfall,” said Linda Darling, a senior analytics advisor with Frontline Education, a provider of school administration software. “This is extreme.”
In addition to the earlier projected ending fund balance deficit, there is a potential $1.1 million Elementary and Secondary School Emergency Relief (ESSER) fund deficit and a $600,000 shortfall for high-cost disabilities funding, Darling said.
She and Jackie Olsen with the Oregon Association of School Business provided a parallel analysis and forecasts at no charge, said acting superintendent Dan Busch.
Darling and Kim Doud, Silver Falls School District's new financial director, both noted some other sources of revenue were projected to bring in more money than had been budgeted.
But Doud said the board needed to understand they did not expect district revenue to come in at the budgeted amount of $53 million.
“We do not believe those positive excess revenues … will fully offset these deficiencies,” Doud said.
Busch told the board the district is partnering with Willamette Education Service District to dig into the financials and will continue to update them with findings.
Next steps and taking cost-saving measures
Busch said the school board's most urgent action needs to be determining a target reduction amount.
“We have to figure out how we can reduce expenses in the 23-24 school year even before the April 8 board meeting,” he said.
Doud also recommended the board approve a tax anticipation note, to pull money from the state in anticipation of future revenue. The money would have to be repaid with interest.
An analysis presented to the board said a tax anticipation note for $3.36 million issued in early June would have to be paid back in December at an additional cost of $42,084.
“We do not have any other option right now besides this tax anticipation note,” Doud told board members. “But to be clear, this tax anticipation note is not the only action that needs to take place. We cannot right this ship without additional actions.”
Doud told the board the district already has taken immediate cost-saving steps including:
Reducing floating substitute teachers in schools
Leaving vacant positions unfilled
Filling mid-year resignations with internal transfers
Delaying the purchase of middle school math materials
Silver Falls school board approves removing proposed bond from ballot
The board unanimously approved removing from the May ballot a proposed $73 million bond, to replace Silverton Middle School and address building issues in Silverton High School.
The decision was made with the assumption that the district’s financial position could impact the borrowing rate. Board members also agreed community trust would need to be re-established before asking for support of a bond measure.
Voters last fall rejected the $138 million bond to replace Silverton Middle School and undertake major repairs and upgrades to the other 10 school buildings in the district.
Second acting superintendent to take over
The board also was told that Busch, who was named acting superintendent when superintendent Scott Drue resigned on March 13, was not interested in that role long-term. He has been assistant superintendent since 2019, prior to Drue's hiring in July 2020.
Board chair Jennifer Traeger announced that during a discussion about the superintendent vacancy.
After discussion, the board voted unanimously to appoint Busch and board member Owen Von Flue to work on an intergovernmental agreement with WESD to have its superintendent, Joe Morelock, become acting superintendent of Silver Falls School District through the end of the budget year, which is June 30.
Dianne Lugo covers the Oregon Legislature and equity issues. Reach her at dlugo@statesmanjournal.com or on X @DianneLugo
This article originally appeared on Salem Statesman Journal: Silver Falls School District deficit likely worse than anticipated
