School district ponders how to pay bills next year

At their last meeting before winter break, members of the Sisters School Board were challenged to start thinking about how the district will budget next year to meet its financial obligations.

The discussion was facilitated by board member Christine Jones to help the board give direction to the budget committee.

Before offering her analysis, Jones stated that her calculations are only estimates.

"I don't want to be quoted as saying these are the definitive numbers for revenues and expenditures next year," she said.

Based on input from Sandy Tartaglia, the district's business manger, Jones noted that the district could next year expect an increase of about 5 percent in its State School Fund grant, about $500,000. But that number probably won't hold up.

"In reality we're going to get less, because they're (the state is) going to take money out for the drop in enrollment we have this year that we didn't figure into our projections last year and because we're projecting a decrease in enrollment next year," Jones said.

Considering these factors, Jones estimates an $80,000 increase in the general fund, with an increase from local option funds of about $60,000.

"Our increase in revenues next year may be $140,000," she said, noting that this figure is only a best guess and the magnitude of error could be significant.

On the expenditure side, salaries and benefits account for about 75 percent of the district's general expenditures. Next year's salary bill, because of the district's contracts with both its certified and classified employees, will increase by at least 3 percent and the health expenditure portion will increase more than that, Jones told her fellow board members.

Jones estimates that if the district realizes an increase in revenue of $140,000 next year, about $40,000 will go to paying the necessary increase in salaries.

"We might get $100,000 in additional revenues that we don't have this year," Jones said.

Board chairman Mike Gould noted that $100,000 equates to about a one percent increase in the general fund.

The district also faces increases in utility and food costs and must cover the costs of capital expenditures. Funds additionally must be budgeted to pay the interest on the $2.1 million in Full Faith and Credit Obligations that were issued earlier this year; after five years the district will have to pay back both principal and interest on these obligations.

Next year's scheduled repayment to the Oregon Department of Education (ODE) of funds the district was overpaid because of the disallowed homeschool program at Sonrise Christian School (now Sisters Christian Academy) must also be calculated into the equation.

Jones suggested one way to cut expenditures: "We really need to take a serious look in the next few months at nutrition services where right now we are transferring from our general budget $100,000 to support the school lunch program."

This money is in addition to federal monies the district receives for free and reduced subsidies.

"We are losing essentially $100,000, and every parent I talk to finds that an absolutely staggering amount...," she said.

In the next weeks the board must weigh the advantages and disadvantages of using monies from the general fund or drawing from funds it is receiving from the sale the Lundgren Mill property or to dip once again as it did this year into its PERS (Public Employees Retirement System) reserve fund to reimburse the ODE and pay back the debt incurred from the Full Faith and Credit Obligations.