2020-12-15 PPS School Board Work Session
District | Portland Public Schools |
---|---|
Date | 2020-12-15 |
Time | 16:30:00 |
Venue | Virtual/Online |
Meeting Type | work |
Directors Present | missing |
Documents / Media
Notices/Agendas
Materials
Five Year Forecast - Update 12.15.2020 (1) (74457f2d60d9ac12).pdf Five Year Forecast - Update 12.15.2020 (1)
Minutes
None
Transcripts
Event 1: PPS Board of Education Work Session 12/15/2020
00h 00m 00s
good evening and welcome tonight's board
work session
on um our budget goals and priorities
this meeting is being audio streamed
live on channel 28 and will be replayed
throughout the next two weeks
please check the district website for
replay times this meeting is also being
audio
streamed live on our pps tv services
website
um so tonight the board will be looking
at
some budget scenarios and um
superintendent guerrero would you like
to start us off
i'll start us off by turning the mic
over to deputy superintendent claire
hurts who's gonna
the focus of today's topic is to talk
about our five-year financial forecast
okay and so every time that we want to
talk about this financial forecast
the governor makes another announcement
about
resources so again we will continue to
refine as
new information emerges just as we
always do
so i just wanted to highlight that for
folks that while we're looking at this
today
um the governor has announced a special
session on the
21st and um but we're not bringing this
to an
action item uh until january
when we return after winter break so
that will probably all work out
all right so i want to thank you for
um continuing to work with us to refine
this
forecast and um i couldn't have done it
without our director
budget um nicole bassin who joins in
with me tonight and so we are going to
run through
some of the changes since the last time
we presented this publicly
and then we will um give an opportunity
well
we're going to ask um chair lowry to run
through
a couple of questions at the end one is
what are your questions after we've gone
through this
and the second will be what would you
recommend
we're showing originally we had four
scenarios
you're going to have one through four
again but
two has an alternate and then you'll see
a staff recommendation
so we'll run you through that and then
we'll we'd like to hear from you
what you would recommend okay next slide
please
so some of the things um
that just to highlight is that we're
looking at a 9.1 billion dollar
state school fund for the next biennium
for k-12 education
and that overall there is an average of
six percent per
savings for the biennium across the
state and that's important because
um pers uh portland is
not seeing quite as much they're one
percent because we've had historically
low
pers rates due to our bonded debt um
lowering our rates for the last 15 plus
years
we also are recognizing a 50 50
split for the state school fund from um
year one and year two um from the prior
biennium
running forward as they project current
service level at the
state level that makes 163 million
dollar difference statewide so that does
have an impact
on us having a hard time maintaining
current service level
in the um when we are starting at the
second year of the biennium rather than
a 50 50 split and then also reminding
you that
even before covid we had a predicted
through the psu um population center
uh that we would have a slight
enrollment decline
across the district so that we um
while this year we've had a drop of our
primary years
in due to the pandemic we're also as
we're recovering over this five-year
period you'll note
that even when the cobid pandemic is
finished our um
[Music]
our student enrollment is predicted to
decline
now again we will update probably post
pandemic
to see what those numbers will be
because an event of this type could
certainly impact
enrollment numbers over time next slide
please
so here are the revenue assumptions and
in this slide
i would show that we have also as
requested added two years of history
to compare to so you'll see in 1819 and
1920 that we have comparison years
so we can see that our state school fund
growth
um for the last three years
00h 05m 00s
have been over um over four percent
in the next biennium due to that per
savings we're expecting a little bit
over one percent
um growth in state school fund and then
we would return
back to what um once were posed pandemic
we would expect to get back to a more
regular cadence
and um again with the trigger of the
state
um the uh economic forecast from the
state
economist and that we would expect in
2324 to have
um somewhat of a recovery and employment
and thus um
again returning to um a higher um
resource collection throughout the state
and then
with our hopes and of continuing in our
predictions that it would be returned to
more of a four percent
cadence of um state school fund growth
on an annual basis
the um you can see in the admw that's
our enrollment with the extra weightings
you can see
that in the last three years that there
is
we're using what we would call the hold
harmless extended
admw because that would be years where
we're
showing decline in enrollment due to
um lower you know across the district
and that there's a stair-stepping with
the state
that as you have a lower enrollment
you're held harmless for one year before
they lower your revenue
so that gives you time to lower your
service level
to match the enrollment now we have not
uh projected a significant decrease in
um expenditures when we if we lose 450
or
800 students in a year when that's over
80 to 100 locations
over 12 grade levels there's just a one
or two
student here and there it's hard to
predict exactly
how much staffing would change and
most likely from one year to the next
there'd be little
staffing need changes when a class size
is going from 27 to 26 or another one's
going from 30 to 29.
so just um so we have not lowered
expenditures in that area um also
on the local you'll see that we have
both percentages and dollars
in this chart which was requested from
last time so you can see that
for the local option levy as well
you will note that the um
the local option levy has um
a growth that um in in a little while
that
while historically we've had some higher
percentages recently they've been
lower percentages and so that's what
we're projecting forward
and then also that our sia has gone up
to 31 million
so nicole please speak up if i'm
neglecting to
um um point out something that we had
intended to share with the board
okay claire just a really quick uh
clarifying question i'm sorry i think
you might have said this and i
missed it but in the state school fund
um um for
uh pps you know we're going from 513
million to 507 million but
but there's an overall growth of 0.56
percent is is that
doing going back to that split and the
pers issues or is there something else
going on there
um 0.56 over each year
to is because of the pers rate
because we're not realizing the savings
when they calculate current service
level they're counting savings
in every you know across the whole state
as an average
um but because we realize savings for 15
plus years we're not getting those
savings now so
um it puts us in a dilemma in terms of
um resources available to us right so
just for the public this is this is an
important point not to lose is that even
though the state school fund is
is growing pps is actually going to see
a reduction as a result of those
assumptions is that accurate
that's correct okay
well the current service level
it's it's not really a reduction because
it's still an increase in revenue but it
is
not enough to cover our current service
level because we're not realizing the
savings on the expenditure side
and essentially because our population
is declining slightly while the rest of
the state is growing
that would mean we get a smaller piece
of the pie of the state school fund
that's correct next slide please
so here are expenditure assumptions
again we've added dollars
as well as percentages in the history
and you can see that um
in terms of salaries you can see a
percentage increase over time
00h 10m 00s
um based on um contractual
obligations as well as
anticipated um in the future and then
looking at our pers rate you can see
that
in 1819 we had 2.82 while other
districts might have had
um in you know a double-digit number and
even into the 20 and the 20
range um and then we've gone um
fluctuated a little and this is based on
also
our pers bonded debt to refinance our
um pers costs and um so you can see
that we're going from 4.68 down to 4.11
and so that is about a half a percent
change rather than the 6
average across the state um
payroll costs you can see their
percentage there
across um historically and in the future
and then i would highlight the health
increase
where we had some in 1819 we had buy
down in
rates lower rates in our health
insurance in 1920 we
were not we did not buy down and we also
had some higher claims
which made a higher percentage and then
you can see we're anticipating about a
five percent
across across the future based on
historical trending
our charter school rate is based
specifically on what our state school
fund rates you can
see when the state school fund goes up
that
same percentage goes up for our charter
schools and then
um nicole would you describe the two um
sia dollar amounts at the bottom of this
chart please
sure um the biggest piece of this
um from the last time we chatted was the
the
economists were forecasting roughly
around 750 million that's bumped up a
little bit so that we'll actually see
closer to 780 million
over the biennium which um does equate
so current allocations 150 million for
this year
and we see 12.4 million of that so
we will have an increase in our sia
funding in the next biennium
in it we should see around 31 million
dollars a year
so in the current year we had moved some
of the sia
investments from um when they reduced
the funding
over to the general fund for this year
so the assumption
uh moving forward in the forecast is
that in uh next year we'll move
the original amount which was 9.8
million that we're funding this year
in general fund back over to the sia
allocation
and then we do have additional
investments that we're making within our
general fund that are
part of our strategies uh that align
with the sia funding so that additional
7.7 would be the additional funding we
have available
to move those strategies over into the
sia funds
and we had originally identified those
investments to be
um supported by sia it's just that the
funding came in lower
and the general fund came in higher so
we ended up having to move them but
we're
putting them back from from the to the
original
intent in our budgeting process next
slide please
so as these were some variables the
board had asked us to
share and so we show the value of a
local option value of one percent
increase is about a million dollars
a year and then we are forecasting three
percent
um that's our most recent experience um
and then the five percent is probably if
you
trended it historically um that would be
where it would end up on an annual basis
and then
if you just did a average over
all the years then it comes in much
higher but it's not something that is of
recent history
in in the local option but we wanted to
share those with you
and if we were looking to save one
percent
of um salary savings across
all employees that would be about three
and a half million
um in in year one and
as you go forward um and then the state
school fund
um admw increase pre-covered
because we in our projection we said
half of our students would come back in
the next
year but if they all came back um and we
went back to what our enrollment was
expected to be that would be an
additional 4 million
next slide please
so some of you had asked for uh numbers
and this is the
um simple roll-up of we started at with
2021 we started with 64.4 million
in our beginning fund balance we're
00h 15m 00s
anticipating revenue
of 678 million in expenditures of 679
million
um with you know a variance of a
little less than a million and our
ending fund balance would be at 63.6
million
now that projection there that we have
changes every minute of every day
so um just just to give you a sense of
what we anticipate but know that each
quarter we're giving you an update on
what those numbers
um are currently so we'll continue to
update those for you on
a quarterly basis so then you take that
63.6 million and you carry that forward
to the
2122 year and that becomes your
beginning fund balance
and i want you to pay attention to the
budget shortfall
line and 21 22. so when we look at
anticipated revenue and anticipated
expenditures we have a shortfall of
about 30 million
in 2122 and that carries forward
um you can see how much that shortfall
would be over time
for each year um still 30 million and
22.23
now we're showing as um
if we were not to make any reductions we
would run out of fund balance basically
at the end of
2223 and then in 2324 we would be in a
deficit mode so that's just to
give you a sense of how long our fund
balance would last it's certainly not a
recommendation of this staff of this
financial team
to do anything of the sort but
it just to give you a sense of how long
our fund balance would last
next side pete please this is a goal
that was set
formally in policy and we've kept the
same standards from
going from uh up building our fund
balance up to ten percent at one percent
per year
and uh showing that uh we're
slated to end the year at six percent
this year
and carrying forward to 24.25 reaching
10 percent
we are ahead of that and we have been
for the last
several years with a realizing
um savings during the year um certainly
last year we made some significant
savings and we've gotten up to
the nine percent fund balance that's
also to help us
get through um these uh pandemic years
in recession
next slide please
so here is um the scenarios that we have
presented to you
now i'm going to ask nicole to run
through this first one
the um we have laid it out a little bit
differently
um if you look at the bottom two lines
you can see what the fund balance is
each year and then the projected fund
balance percentage-wise each year
and so i'm gonna with that turn that
over to
nicole sure so you can see at the
the first row where it says um well the
first row we added the years so that
would make it much easier to read but
the next one
actually has the budget shortfall so
that aligns with sort of the summary
from up above for each of the years the
next
one will tell you information on the
prior year identified reductions so
in the forecast the assumption is that
those reductions that we identified to
balance the budget in the previous year
carry through in all of the years so
the next row talks about the fund
balance that we would use
in each scenario to help balance the
budget
so it's important to note that in each
of the scenarios we are using a portion
of fund balance it's just
uh the only variance is how much we use
in each of the years
so we have uh the first subtotal which
is the annual reductions that are needed
at the high level
those are the big ones the 20.7 million
in next year
the sia funds available is that taking
into account of moving those uh
original investments that were planned
out of sia over back
into the available resources so we have
a revised shortfall of what we would
need to balance
the general fund budget in each of the
scenarios so you can kind of track that
along
and then as claire pointed out you have
the fund balance for each of those years
and the percent of that as a whole so
you can kind of get a feel for what each
scenario would leave us
so revised shortfall if you look at the
totals column
in that scenario we need over the five
year window 18.3 million
to balance the budget and then we would
be left with 30 million
30.5 million as our fund balance which
is four percent of our general fund so
those are kind of the high pieces and
there is a summary uh
area as well that will kind of highlight
those
i don't know if we want to walk through
next slide please
and in your report you will notice
there's
an analysis paragraph on each scenario
00h 20m 00s
and so the next one is
very similar in in terms of layout
and what i would highlight is this one
it starts with our nine percent
uses two percent in the first year um
and then grows back up to the eight nine
and ten percent by 2425
it would come at a cost of 26.9 million
reductions over five years
and i would draw to your attention that
the 17.7 reduction
in million in 2223 is something
that we would want to try to smooth out
better with a possible different
scenario
next slide please nicole add anything
at any point in time please
okay and here this one is a little bit
this is the revised scenario two
where we go down to seven percent in the
first year and stay at seven percent in
the second year
and then continue to grow and um
back up to the 10 and you can see that
that would use 34 million
and it would require 34 million in
reductions
but it does smooth out the re reductions
over
smoother than the prior scenario to
and it does get us back to a 10 fund
balance at the end
um can i just mention um
in this memo
on page six um
it says that the board has established a
goal
in 2017 to reach a 10 percent general
fund balance by 2025.
um so in in the existing
policy it no longer has
a specific date by which the board
um sort of mandates reaching a 10
reserve um and
we we had a date in 2016 there was a
date
and then we we revised this policy in
2019
precisely to give more flexibility
in the use of reserves in the event
of revenue shortfalls
so i i think it's important to
remember that um
we are not necessarily we have not
mandated for ourselves that we must
achieve a 10 um fund balance by 2025.
correct um and the purpose of this
conversation
of having a five year forecast is to
make sure we're having that conversation
with our board
about what the goals are for the fund
balance and
certainly um while this is the first
time we've done that with the board
in in our recent memory um
that's something that we'll be returning
each fall to give an updated projection
and ask you to make those decisions
about uh
setting a goal on fund balance as we
work through
the budget process in the spring so that
the intent is to
finish this work in december i know
we're creeping a little bit past
winter break which is fine in order to
prep us for
our january through april may
budget process next slide please
and on this one it's maintaining a seven
percent fund balance as an option
and you can see that it would again be a
26 million dollar reduction
and it does smooth it out um
better than scenario the original
scenario two
and um it does um end
with a seven percent fund balance
and the next scenario please
and this one is um starting at nine
percent
and um uh maintaining an eight percent
fund balance
and would um equate to another
also 26 million in reductions
and it does um have a larger amount up
front and then you can see that in the
remaining years the amount
is much lower and
[Music]
so it is it allows us to keep our
maintain our fund balance and also keep
a very similar amount of reductions over
time
having um that pers correction
um in the funding formula there's
um i think the staff has an interest in
seeing
us uh correct our service level
00h 25m 00s
to match up to the funding level that is
now been brought forward is current
service level from
from the um state school fund
calculation next slide please
so here are some unknowns right so we're
going to make our best
estimate and the board's going to make a
recommendation and then we're going to
do our budgeting but these are things
that we're still
um need to consider are that could
impact this decision-making process
one is that um in um the work that we
need to do going forward
so the governor is holding a special
session next week we don't know
what that might hold for us um in k-12
but we certainly are going to be
listening carefully
and we have the co-chairs budget
generally comes out after the next
economic forecast
in and towards the middle to end of
february
and then we have um a k-12
advocacy groups um asking for a 9.5
billion for state school fund and that
would be an additional 31 million for
the biennium
for pps and
we also have the needs of
our you know our students that we've
lost
quality education time with their
teachers and
we in terms of instruction and we just
need some acceleration
we're not sure what those will be and
how much those will cost yet
but we need to recognize that that's
sitting before us as we
recover from this pandemic
and um next slide please
so the staff is recommending scenario
four and
the um reason we are doing that is
because it would maintain an eight
percent fund balance in the end and it
does take the
reduction sooner so that it means that
we have smaller reductions in the
remaining years
and it tends to snowball when you don't
take the reduction up front into
snowballs into larger reductions in the
following years
so that's our kind of our mindset and if
you bring the next
slide up and of course we're going to
listen to it
the board has to think about all of this
just wanted to
provide a summary of all the scenarios i
know it's a lot of
numbers on the page you can see the
staff recommendation on the bottom
and um what we've brought forward to you
is
at the end of each year what the fund
balance
dollar-wise would be what
percentage-wise it would be and the
amount that would need to be reduced
each year
by each scenario so it's an easy way to
see all of it at once
and um so we're recommending um
that may start you know
using some in the first year and then if
you look
in uh we'd have 13 million in reduction
in
2122 and then it goes down to four
and pretty even and three and six for
the remaining years so when we look at
having to reduce
26 million in three of the scenarios
it's the same
dollar amount but when you look at the
difference of what the fund balance is
and also the amount of reductions that
you have to make each year
that's how we made our decision on
recommending this
scenario with that i'll move to the next
line
and at this point we want to turn it
over to
our board chair and
ask we want to make sure we get
questions answered from the board
and then also are wanting to hear from
our board members what they're seeing in
the scenarios and what they
would recommend um for the budget
if you know what goal to set for the
budget and and why
so let's can we go ahead and leave that
slide up so that we can have the
question
well uh let's actually um
see one another for this part and then
we'll go back for the second question to
the slide
um do you all think we need to go in
order with questions or do you think we
should just popcorn it
board members thumbs up for order
thumb sideway for popcorn
all right popcorn great um
maybe it looks like you have a question
i know i do amy go ahead
go ahead and leave with your question i
was i was going to just say
you know i'm still wrestling with this
idea that in scenario four the
recommended one we would have cuts the
first year when we just talked about
learning loss and so it feels like
year one is when we should cut nothing
because we're gonna have kids back in
classrooms and
we're gonna need to sort of like do some
additional work so i just
just wondering about how that sort of
00h 30m 00s
resolves
in knowing we actually might need to
invest more in year one to help get
students
back into school culture back into the
flow of academics so one of the things
that are still being discussed at both
the state and the federal level is
additional resources
to respond to the to covet in the
pandemic so that is one of the reasons
that we're at this point staying with
uh scenario four and uh as a
recommendation
because uh it does um it
i do hear you that the need is great
um and i also hear a lot of advocacy
both at the state level and at this
federal level for k-12 education
superintendent guru i think that's right
uh deputy hurts i i think you heard
claire say at the outset that this is
an iterative process uh we're hopeful
that the advocacy and
a change of in administration uh does
prioritize public ed and k-12 and that
that trickles down
through the states and oregon and to us
eventually
so these these are still a little bit of
moving numbers but
on principle when you see the notion
of retaining that fund balance
percentage
gives us a steady trajectory which
hopefully will only improve in the
coming weeks and months
okay so we're kind of hoping that the
federal government swoops in
and does the right thing okay
so okay well
and i would say there is also um
that you don't have to pick one thing
you could say it would be this scenario
unless this happens or it would be that
scenario
if this happens right so you guys can
have caveats and ranges
right well the other
the other thing with regard to that
claire is that we have
we have variables on both sides so i
think what you're asking us to do
tonight is outline a general approach
and generally speaking um i
can get on board with this
recommendation because
it decreases the
the aggregate amount of reductions that
we'll have to do
over time by taking a hit
up front um but
it also uh you know
keeps our reserves at what i would
consider a reasonable level i do
i do back to our conversation um two
weeks ago when we discussed this
um it does feel a little bit like the
tail wagging the dog and
and trying to figure out um what what is
our
overall philosophy going to be regarding
our reserves
when we don't have data that
informs um a strategic
you know initiative around how to
address learning loss
and what kind of interventions and
additional services we're going to
um but that's through no fault of our
own i mean we just don't know that yet
um we don't know what's gonna come forth
from the state we don't know what's
gonna come forth from the feds so we've
got puts and takes
um so i i think for the way i look at
this personally i
just i'm trying to get myself
comfortable with a general
approach um and then
um we have a lot of opportunities in the
future to talk about
um where we need to spend and where we
may need to cut
and i don't think landing on a
particular approach
regarding our reserves
ties our hands with
how we're going to address learning loss
and and and where we might need to
make investments and cuts
other questions from board colleagues
uh yeah i have a couple questions um
so i'm i i'm looking at the projection
uh revenue assumptions and and then
expenditures and shortfalls
um so if i understand correctly
um because we were expecting
enrollment declines um
over the next five years um
our revenue even absent coveted
um and recession we would be looking
at um some decline
in state school fund revenues is that
correct
that's correct okay um can you give me
some sense of kind of the order of
00h 35m 00s
magnitude
of the um revenue reductions
based on the enrollment rejections
it's not very significant is what i
would say in
when you look when you're looking in the
hundreds of millions it is
um but we can get you a specific number
yeah i mean a ballpark number would be
fine
but where i'm going with this
is they're projecting that
um we're going to have an economic
turnaround
um for the 2324 biennium
right but at that point we're looking at
um significantly higher
shortfalls
in in 2324 a shortfall of 38 million
24.25 almost 50 million
25 26 6 63 million
um and that's during a period when
where wherefore they're forecasting
an economic turnaround so um
can so me through that so the one thing
that
um that doesn't when we're when you're
looking at just that straight
chart when you have a shortfall in one
year of 30 million
and you don't do anything to correct it
by making reductions
then that carries through into the next
year so
that shortfall continues to grow over
time
because you've never made the correction
to the service level meaning
lowering your expenditures so if we were
for instance to take out that 30 million
in that first year then those numbers
would drop
down significantly and if each year we
were responsive
to making reductions and on our
shortfalls
you those numbers would be much smaller
and that's what you're seeing in the
later on scenarios
so this is just a straight um
but our current service level as it goes
forward
but what we know is that we would not we
would make reductions
and so those numbers would become would
go down
so the numbers in these charts
represents
um an assumption of stable expenditures
yes okay
in that chart yes okay
okay so all right last question on this
um i understand that even
with uh some declines in enrollment
um that would not necessarily translate
into significant
sort of commensurate declines in
the necessary level of expenditures to
serve the students that we have
right okay
can you quantify that for me in any way
like
is it so if you have a teacher of a
of a hundred thousand dollar cost it's
actually higher than that but
we'll just use that for easy and then if
you're saying you have
um let's say 25 teacher
25 students per teacher at 100 000 and
then you're taking out 450
students you can't you're not going to
necessarily have what is that 4 8
12 16 18
we're not going to reduce 18 teachers
because they don't come out in even
increments in the classrooms across the
district does that help with
yes okay
okay thank you
any other questions scott
scott you're not muted but we can't hear
you so i don't know
what's going on with your
your sound there still can't hear you
nope
maybe leave and come back
you were working earlier i heard you
talk earlier
can anyone hear him no i'm trying to
read his lips but no luck
i think he's leaving him gonna come back
okay michelle i saw you on mute did you
have a question or were you just going
to tell scott we couldn't hear him
i was going to tell scott that we
couldn't hear him my question's mostly
been answered
through the question that you raised i
was curious if we'd heard
or it were anticipating with that
scenario for any
00h 40m 00s
additional federal stimulus coming our
way
fingers crossed by the end of the year
still working on it
this work excellent
thank you claire yes all right
you're back we can hear you it's been a
weird technology night
10 minutes ago my screen went completely
dark and i had to shut down and restart
and
good times
so one thing director de depass and i
have in the past
discussed uh enrollment projections
and what's happening with housing uh in
the future
um so it would be
helpful to get some more
definite data on uh
construction of family-friendly units
going forward
because she and i had i mean it was a
it's a really good discussion but we
need the data and then uh
we'll we'll figure out who who was
writer we're both right
don't we have a new um demographic
projection yeah moment projection coming
from psu in january claire
yes that includes all the um permitting
and all the new housing starts
it does there's a link into there yeah
there's a link
to um the one we received last year in
the
memo so you can look at that but yes you
are right um
we should have a new one out early
january is what we're hoping
and and that's good uh and that doesn't
include
um anything that isn't permitted
but uh is likely to happen
over you know the foreseeable future
uh that's one of the strengths of the
psu projections is that they are really
grounded on what's actually happening
uh and it's also uh one of the
weaknesses
is that there might be things in the
works
that aren't anticipated that are really
more speculative
that aren't included in that uh
so that's one thing um
second thing is um and again we're
wrestling with
what's a conservative uh projection
going forward
and what's out there that's like the
federal
additional federal funding that may be
out there
and it seems like for us to go ahead
with uh what i'm what i'm hearing
is on the one hand where we should be
conservative but on the other hand we're
kind of thinking
that the federal the feds will in part
bail us out
um and i
that that seems to be a bit of a
contradiction for me and how we look at
the future
and that we should construct a scenario
of
assuming that there's going to be very
little if any fed
bailout um and how we would act
and another for if there is a you know a
reasonable projection for a fed bailout
and those are going to be two very to me
two very different
uh paths going forward and a third
way of thinking about this i'm really
concerned
i mean i mean uh i agree with director
constand that
just looking at the numbers the prudent
thing to do
is to make early cuts um and
keep us in a relatively good financial
position going forward
at the same time as director lowry uh
chair lowry has pointed out
we have immediate needs that are
enormous
so i think splitting the difference on
that
would be to spend down reserves
earlier quicker for those
temporary short-term programs that we
wouldn't build in going forward
a greatly expanded summer program for
example
for maybe one or really two summers
going forward might really be needed to
catch
a lot of kids up and we should think
about
so that wouldn't carry into a long-term
expenditure pattern
but would address the huge
needs that we're going to have
so that's just top of mind thinking
00h 45m 00s
and we would still have to make those
reductions like if we did that for two
years we'd still have to make that
correction in that third year
right but that that's that's different
from um
saying hey we're going to not cut
teachers for two years
and then having to have a huge teacher
cut in year three
we're talking about programs that are
kind of above and beyond
the core classroom
i uh sort of weighing in on this because
i think this is a really
it's a really interesting conversation
about how we respond to the pandemic
and i think maybe one of the things
that's important to keep in mind
is the limited role that one individual
school district can have
and so what i hear you know people
saying and i'm totally on board is
there are huge needs there's there's
there's you know a great article i read
the last couple days about the need for
a marshall plan right around
you know children's education in this
country and i think everyone on this
you know uh in this district would agree
with that
but i think it's worth recognizing as an
individual district we
cannot provide the funding for that like
like it is just
beyond our fiscal capacity and i'm sort
of reminded of back during the
great recession when you know there was
some stimulus but not not nearly
what we needed and and some local
governments including you know ours
around here
started saying well we have to come up
with local stimulus um
and we did some studies with echo
northwest right about what that would
take and and the reality is that
it's impossible right so even no matter
how much political will there is to do
that
the reason why we need the federal
government to step in is because the
federal government is the only
government with the resources to do that
the state a little bit more but but
still somewhat limited in terms of of
the need to balance its budget and of
course we are you know um
legally bound you know to balance our
budget so i i want to be a little
careful well i
absolutely support the need in in these
you know coming out of this pandemic to
invest in our children
if state and federal resources don't
come in i think we need to be honest
with the public about the fact that we
will not
be able to provide the services that our
children need coming out it's it's not
like
if they don't come through we can move
things around in the budget and make it
work
we can put a couple band-aids on a on a
wide-open wound right but it's it's not
it's not going to stop that bleeding so
it just kind of gets back to the
importance of needing that that that
federal
bailout um the other thing i'll say yeah
i just i and i this is not so much a
question as a statement but i think it's
important to talk about
and and and staff in the memo you know
talk a little bit about the importance
of reserves um
and i think sometimes that does get lost
in the public debate and when we talk
about reserves they sound like oh that's
you know
um that's just a rainy day fund it's
really nice and and we can tap into it
at any time
i mean the reserves really are there for
a number of reasons and bond rating is
one of them and that that is important
right
although i actually put that as sort of
secondary tertiary importance
although with with the bonds that we
have in place um keeping a good rating
saves us tens of millions of dollars um
in interest costs over the life of those
bonds so
it is very important but more important
is actually having the resources
to respond to true emergencies and i
think i don't want to lose sight of the
fact that
as a result of this pandemic we are
spending down our reserves so the rainy
day fund is being spent
um sort of as we as we balance these
short-term needs
and there are other unknowns out there
that may come our way
and and again we as a government have a
fiduciary duty
to ensure that our budget is balanced
and to not i mean i
you know i thought the current service
level chart is really helpful because it
essentially says
in year three we will have violated a
number of laws right if we take no
action
we will have violated a number of of of
of literally
local budget laws um that cannot be
violated
um and so that's the reason why we need
to take some action
but but those reserves of which we
already as a district are under reserve
so
so also included in the memo you know is
gfoa recommendation and it's sort of
noted that
you know a government should have at
least two months of operating reserves
that's about 16
um we're significantly below that
already and while we've been making some
steady gains
i think it's worth starting out we are
in an under-reserved position
um i will just note that a government um
one that i'm familiar with at metro
was not in an under-reserved position we
were actually in a very over-reserved
position
and those reserves are gone and that's a
good example and i think one a lesson to
be learned
that um even even when you are exceeding
some of those national standards um you
can be hit with things that were just
unexpected we never ever ever expected
that conventions would come to a halt
completely we never ever expected that
concerts
would stop for a year we never expected
that the governor would shut down the
zoo for
you know a few weeks or a couple months
you know completely so
well we talk about you know these issues
and whether we should sort of spend down
the reserves or
00h 50m 00s
increase them remember we have to keep
something in case some additional
catastrophes hit
you know over the next you know a couple
of years you know if we have a building
that literally a roof collapses right if
we have an earthquake if we have other
things
we also have a fiduciary responsibility
to maintain reserves for those
situations as well so again not a
question so much as a statement but
um i'll just sort of leave it there i
never expected that i would get to drive
through the oregon zoo in my car
and yet that's happened so a little bit
like you have fun
isn't it fun i know okay okay uh the the
plug is over but man it's fun
all right other questions sorry go
only to comment of course we're we're
trying to be prudent here with
money in hand and try to you know
as we develop a multi-year strategic
plan resource manage accordingly
you know what we have available to work
with and we expect
some uh covered relief perhaps and
i just uh sent directors
the latest council wrap up dated
yesterday
around some provisions that we're hoping
you know
get entertained uh in this stimulus bill
but just from my conversations with
chancellor carranza or superintendent
buettner or ceo
jackson in new york la and chicago what
they're referring
to is a much grander sustainable
funding mechanism for k-12 and so
you know that could take the form of
actually
investing in all the title programs it
could mean
congress actually for once funding to
a reasonable level idea special
education services
you know delivery model that you know is
really
um you know you're having to earmark you
know
a pretty massive investment for for most
districts
uh it doesn't enjoy the level of federal
funding that it should so
there there are some levers that would
bring relief uh to what we have to work
with but those things
they still remain uh to to be in the
dialogue hopefully
uh uh to to sort of capture people's
imagination to do the kinds of
work that we would love to do and to
actually engage in this conversation
around
an educational recovery because for us
right now it's
well how can we be efficient what
nickels can we set aside to
to really sort of put attention to to
our students who've been impacted during
uh this school closure um so you just
have our best thinking here but of
course
there's we don't want to rely on what
uh is an unknown right now but there's
possibilities
uh in the future
just a final comment i i realize
bond rating is important in terms of
saving money
i do find it somewhat of a travesty that
the bond rating agencies
uh were shown in the 2008 financial
crisis to be completely
compromised and corrupt
and when when was the last time a major
school district
defaulted on bonds um
and it's uh it's not a pretty place to
be at their mercy
all right any other questions before we
move on to
the next question which is um the big
one
about what we're thinking about
scenarios nathaniel did you have any
questions
okay um could you put the slide back up
just so we see the verbiage of the
question you're asking
it's as you review the scenarios which
scenario would you recommend to
determine the general fund balance for
the 2122 proposed budget and why
so that's our question it's coming back
up on the screen and i think we'll just
go
through in um in a kind of everybody get
a chance uh
list cara sent me a new order
which is very exciting it's um based on
when our birthdays fall in the year
so um we will start then with director
depos
whose birthday is in january so uh
director deposta do you have a scenario
a response to this question as
you review the scenarios which scenario
would you recommend to determine the
general fund balance
for the 21 22 proposed budget and why
i am in favor of senator scenario 4
because it's the stock recommendation
and also
um as superintendent guadalupe just
mentioned he did
share a report that talks about the
advocacy
happening at the federal level that i
feel
helps us address some of the things that
00h 55m 00s
you brought up chair lowry in terms of
the significant loss of learning kids
have experienced the last nine months
um so i i'm i'm happy with scenario four
and by the way the birthday question it
is a big one
we're not we're not saying which year
we're just saying where
in the course of 12 months does your
birthday fall because
i'm telling you it's a big number and
it's an important one so
anyway move on to the next person who is
a february birthday
student representative shu
uh yeah thank you um i
i don't know honestly i feel like
i could do to um hear a lot more
background
on this and um why we're making
some of the assumptions we're making and
uh
well honestly what some of these
acronyms mean as well
um i i mean
yeah best not to speculate beyond that i
think
um and maybe we can find a time to get
you a little more in-depth briefing
about some of this before
the meeting on the fifth so claire why
don't you and i touch base about that
tomorrow during agenda setting
great yeah that would be good great so
we go from february and then we jump
all the way to june and director bailey
that's great except i'm september
i think perhaps you meant the ice good i
met director
god it just was getting all ready to
unmute and then you gave it over to
scott i thought oh christian
enough okay director scott not director
bailey
sorry you guys really need to have
different names okay we'll get on that
um yeah you know actually i'll go i'll
go through them a little
um i i have i have real concerns about
scenario one i i wouldn't i wouldn't
support that i think a four percent fund
balance is
is um is not um responsible um
as a government to sort of plan on um so
i wouldn't i wouldn't in favor of that
and and well i i appreciate and i
actually um
i should have said overall i really
appreciate the scenarios that staff put
together and the recommendation i think
it's a helpful
uh tool for walking through this um i i
i like the idea of
of maintaining our focus on on that 10
target and i will also point out 10
is still a little bit low um but i do
think it's appropriate at this time to
pause
on that and and and i like the fact that
we're going to be coming back
um every year to um you know to take
another look at this right and
and we can it's it's a it's a moving
target and a moving forecast and so it's
not we're not setting something in stone
for five years we can we can adjust
but i think it's it's it's okay to pause
on that um and between scenarios in
three and four you know there's not
there's not a right answer in any of
this um
but i do i do uh agree with staff
recommendation
um to to sort of maintain and i think
the selling point for me is that
under scenarios three and four both of
them we have to cut 26 million dollars
scenario one um cuts it a little bit
earlier um
which allows us to again maintain a
little more fund balance which i will
point out then
allows us to actually potentially use
that fund balance in later years
um particularly if the economy um starts
kicking up there would be more resources
potentially available
um and scenario three takes that same
amount of cuts um but but you end up in
a worse financial position so
so you're cutting 26 million either way
but after five years you're ending up
in a worse position i think there's some
value in cutting early and
and i think the other thing i will say
and staff said this but just to
reiterate um
the lesson coming out of the great
recession is that governments that did
cut early
um were more successful in the long run
they were more resilient and they
actually
bounced back quicker and so even though
they're short-term pain and it's hard to
sell that
um to the public um we know
looking at that experience that those
governments ended up
they ended up cutting less because they
made some of those ongoing cuts early
and were again able to bounce back more
quickly so um i think there's there's
something to be said there as well
however i will i will carry out all this
by saying you know we need to keep our
eye on what's going on
at the state and federal level and as we
get into the actual budget decisions
um you know i think this is a good
framework for staff as they put together
the proposed budget but i think as a
board we can be looking at that and
adjusting as we go through the process
all right i'm july so i'm next um i
um and i like scenario three despite
what uh director scott just said about
it leaving us in a worse financial
position
i i um i think i could be convinced
on scenario four if we get uh federal
um stimulus money to um help schools i'm
just so deeply concerned about what it's
like if we
starting back in the fall with
01h 00m 00s
substantial cuts so i'd like to spread
those cuts more evenly out over the
first two years rather than having such
a big cut in year one
um so i prefer scenario three to
scenario four just for that reason but
if we were gonna get some federal
assistance then i would be easily moved
to scenario four
but that's my rationale for that is my
concerns about
the impact on students returning to
school
after a very difficult
year of being out of school all right
um next we move to september and while
we've already set out nope sorry august
next we move to august
and that is director moore
um thank you um
so i'm kind of where
chair lowry is um
i am i am not entirely
sanguine about the likelihood of
um genuine relief coming from the feds
um hope springs eternal but it usually
gets dashed
in washington um
so i would um
i would i would maybe
[Applause]
um yeah maybe
i i'm being drawn to scenario three
with the um with the caveat that
if if we do get some federal funding
that's actually significant
that we could build back
any reserves that we have used um in the
short term
um i'm also a little concerned about
year two
um because i think there's you know
there are going to be
increased student needs um
not just next year but um probably well
into the following year and
as well um
and while i'm a huge proponent
of um robust reserves
um i am
we need to balance it against um
you know this is the functional
equivalent of of a roof collapsing
probably several roofs collapsing um so
um i was a huge proponent of the policy
came out of cbrc when i was
when i was um co-chair of it um
so i don't lightly say that
this might be a time to dip into
reserves
but it's there for a reason and i think
we can be prudent
and responsive at the same time
and finding that balance is critical
um i guess my my final thing is um
i am actually more perturbed about what
appears to be
a structural deficit um
that that we're going to be looking at
in perpetuity
if the state continues to use its
current practices on establishing
both current service level and um um
state school fund appropriations um
just the sim i mean correct me if i'm
wrong
because i may well be but it seems to me
um
they used to they used to divide up the
allocation
by uh 4951
um which took into consideration the
um you know inflation rates from one
year to the next
um and for the last few biennia they've
been using the 50 50 allocation
which gives a a false appearance of
sufficient funding
when in fact it's a structural deficit
of somewhere between two and three
percent in year two
um so i would like us to be
respectfully aggressive um
with the state in addressing some of the
the structural issues that are
exacerbating a general
insufficiency of financial support for
public education in the state
there you go
all right i know director bailey is
excited because we're moving to
september but actually director brim
edwards birthday
falls before director bailey's in
september so director brim edwards
thank you and i'm sorry i um haven't
been able to get my camera
01h 05m 00s
to work um yet so um
what's the date we're going to um take
action on this
january 5th january 5th um
so a lot can happen between now and
january 5th
um so i
um i'm really reluctant to land on any
scenario um you know weeks out when
we're in the midst of major
major governmental transitions
um
if i if i had to start with a scenario
i'd start with scenario four
however i'm going to go back to what
deputy superintendent
heard i think offered at one point that
we could add some caveats and criteria
um and you know
not and customize something um
my biggest in addition to a government
transition i think we are missing just a
huge
p i feel like we're sort of backing into
this
and missing um in an ordinary year i
think this would be an absolutely
um prudent
course to take to be setting these
targets and you know
um taking um being good financial
stewards of our resources
and keeping a reserve um but i think
we're just in an extraordinary time and
i'm concerned
um that right now we don't have any data
about
the learning loss that is occurring
the data we got last night was
not pps data and
in addition um you know i'm wondering
about
the students that we lost um
there were yes there were a fair number
from kindergarten but there were a lot
from
first grade to eighth grade and what do
those students
need and so i'm i'm hesitant to say
like i'm willing to put a stake in the
ground and work backwards
to here's here's here's what we can
provide versus what is it that we need
to provide
and work the other way um so if i had to
give an answer today
it would be you know scenario four with
some
with some adjustments and customizations
but
my thinking is going to be very fluid
and it's going to be
very much informed by what i think
may be the gap or what we know about the
gap and what may be
required and i want to hear from the
superintendent on
sort of what it would take to
accelerate students um
on to back onto a path of being on on
track so
um my thinking's gonna be fluid over the
next
several weeks and probably months
okay and as director scott did say we
are revisiting these as
as more information comes through all
right we are
finally to back to director bailey who i
tried to call on for june
um director bailey what uh what
uh scenario would you recommend um
none of them um i'm closest to
why um agree with uh director brim
edwards in normal times
uh scenario four would be
where i would be but these are not
normal times not anywhere close
so i'm in a a modified one
that looks at lower reserves
even more aggressive spending early
because of the immediate need we have
over the next year maybe two years
and to ignore that i can't i can't
ignore that
[Music]
and if we do get uh
more federal funding great we can do a
budget amendment
and keep more in reserves um
but i'd rather look at it that way
rather than
a more optimistic viewpoints and then
have to do a
well uh oh the feds didn't come through
all right and director constand with a
november birthday ringing in the end of
our year here
um what scenario would you recommend dr
constance
again i see this as just really the
purpose of this
is to give our budget staff guidance
on how to begin the process of putting
together our budget they have to start
somewhere so we're giving them general
guidance
01h 10m 00s
on our our our foundational
piece of the reserves i think there's a
lot of room for
um all the variables to come into play
um i'm generally comfortable with
scenario four
i think with regard to um
the uh bigger bigger uh
reduction in year one relative to year
two
i think our needs are going to be just
as great um in terms of addressing
uh student needs and and learning loss
in year two as well so
um i think it makes fiscal sense to do
that in
year one but um yeah we just need to be
very
open to uh all the variables that are
going to come into play but i say
uh go forth make these assumptions about
where we want to keep our reserves i
appreciate everything
rita said about this long journey that
the district has had regarding
our rainy day fund when i came on the
board it had been
after a series of years of just
dwindling reserves and we had a lot of
difficult conversations
about creating a policy and putting the
stake around
in the ground about being more fiscally
responsible and a lot of collaboration
with the
cbrc a lot of advocacy from
the cbrc members to really address
the need to have a healthier reserve
fund so
i like the fact that we're treating this
conversation with such
seriousness and not just
not just looking to drain that that um
pool of funds and we'll just have to see
what
how all the other variables come into
play
all right uh deputy hertz um
what else do you need from us in this
work session tonight
um i've heard lots of great
thinking around this and i really
appreciate that this is the first time
we've had this conversation in this
district for some time
and having staff and board um
uh come together around different
scenarios and
of course um can i've taken notes of
what each one of you
have said and in terms of um working
then with
board leadership on what we need to
bring back in january
so that's my plan from this point
if i could just add chair lowry to
deputy hertz's comments there
uh director broome edwards just brought
this up and i know the board feels
similarly around
it's going to be really important that
we get some system snapshot of
student learning at this point and we
hope to have that
at the mid-year point because you're
right we have some finite resources
and we want to be able to really target
those interventions and the recovery
that's going to be necessary
for students we know have been impacted
so we know the costs there
are going to be finding ways to
extend learning to increase
instructional time so that's some
targeted summer
programming we know that's going to
require some additional intervention
and and materials in the coming school
year uh probably some staffing to really
support
uh those school communities that we know
uh
had either decreased participating
participation rates or
uh just weren't as engaged as we would
have hoped
so you know for all those reasons i know
that we all want to be data informed
uh as we have these conversations about
our resources and so
so stay tuned for more discussions on
that
all right anything else before we close
this work session
all right thank you all for taking the
time to invest again in this work
um i know we had had some time slated in
a meeting last
meeting but didn't get to everything we
needed to so um this was a way for us
really to dive into this deep work for
the board
so let's take a 13-minute break and i'll
see you all back at 6 in our regular
Sources
- PPS Board of Education, BoardBook Public View, https://meetings.boardbook.org/Public/Organization/915 (accessed: 2023-01-25T21:27:49.720701Z)
- PPS Communications, "Board of Education" (YouTube playlist), https://www.youtube.com/playlist?list=PL8CC942A46270A16E (accessed: 2023-10-10T04:10:04.879786Z)
- PPS Communications, "PPS Board of Education Meetings" (YouTube playlist), https://www.youtube.com/playlist?list=PLbZtlBHJZmkdC_tt72iEiQXsgBxAQRwtM (accessed: 2023-10-14T01:02:33.351363Z)
- PPS Board of Education, PPS Board of Education - Full Board Meetings (YouTube playlist), https://www.youtube.com/playlist?list=PLk0IYRijyKDW0GVGkV4xIiOAc-j4KVdFh (accessed: 2023-10-11T05:43:28.081119Z)