The Coupeville School District is seeking community input that will be used to inform upcoming budget decisions, which are due by the end of July.

Parents, staff members, students and community members have until 4:30 p.m. on Monday, March 25 to complete an anonymous five-question survey, available in English and Spanish on the district’s “Budget Information For 24-25” page.

Currently, the district is expecting to make significant budget cuts for the 2024-2025 school year, which may amount to $1.66 million or more, according to Finance Director Brian Gianello. The district is current on a state financial “watch list.”

During a community forum held on March 13, Gianello said this projection might change and that the district may actually need to reduce spending by as much as $1.5 million to $2 million.

In the survey, the district asks what makes Coupeville a great place for students and staff, asks what questions remain and welcomes respondents to share “outside of the box ideas” to reduce expenses and address workload challenges.

The district will use community feedback to look at what reductions can be made and to develop a modified education plan for the next school year. A draft for the modified education plan will be completed by mid-April, followed by another community forum. The final version of the plan will be adopted on April 25. In the next few weeks, the district will also analyze contracts with labor unions.

According to information provided by Gianello, about 87% of the budget is dedicated to staffing and staff benefits. Board Member Nancy Conard said this means the cuts will mainly affect employees.

“Most of the cuts are going to have to be people,” she told the audience. “There’s just no getting around.”

Conard said employees were asked to give notice of their intentions to leave or retire, so the district can eliminate those positions by attrition rather than laying off people. She also expects some staff members will “juggle around” to make up for those losses.

Conard said the district wants to ensure that, if staff reductions are necessary, there is an understanding of what the consequences of each potential cut may be. This year, for example, the elimination of three paraeducators resulted in overworked staff and reduced support for special needs students.

The district got itself in this financial bind due to many reasons, including inflation, increased cost of staff, the loss of ESSER and CARES Act funds from the pandemic era, Washington’s prototypical funding model that does not adequately fund school districts, “optimistic budgeting,” untimely budget reports that lacked specificity and reduced state funding, according to school officials.

During the meeting, Gianello provided data showing the district’s use of the fund balance over seven years.

According to Conard, the district is required to maintain a 6% fund balance, which has not been happening. To restore the fund balance, the district will have to make more budget cuts in the future to keep up with rising costs and lower revenues. The upcoming budget reductions would restore 2% of the fund balance.

Currently, the district is on the Northwest Educational Service District 189’s financial watch list along with 27 other schools in the region, which comprises a total of 35 districts.

To avoid ending under binding conditions, which, according to a presentation by the Washington Association of School Business Officials happens when a district ends the year with a negative fund balance or needs to budget receivables collected in the future to balance its budget, the district has been borrowing money from its capital projects fund. The Office of the Superintendent of Public Instruction and the service district can dictate how districts with binding conditions can manage their money.

In a worst-case scenario, districts that can’t resolve their financial situation are dissolved.

The Coupeville School District is not under binding conditions but must pay back an interfund loan from its capital projects fund into the general fund that was approved by the board earlier this year. Gianello said the loan will be repaid when the district receives the levy funds in April.

In a previous meeting, Gianello also announced the need for another interfund loan transfer of $800,000, to be made in May. The district has up to a year to pay it back with interest.

The hope, Gianello said on March 13, is to be able to operate in the future without borrowing money.

Board Member Allison Perera said there would be months where no information would come out, but at the time it was fine because the revenues and expenses were about the same each year. When the pandemic hit, districts were given large sums of money for programs to help students weather the unprecedented health crisis, but then the funding dried up while many of the programs persist.

The “staff regionalization experience factor” determines how much a district is allocated based on the cost of living in the region and the staff’s level of experience. According to information provided in the budget’s FAQ page, this has resulted in a reduction of $260,000 between the current school year and the next.

Community members expressed their appreciation to Gianello and the board for working towards finding a solution and keeping the community involved.

“We can recover from it,” Conard said. “It’s not going to be fun, but we can.”