Superintendent outlines priority'based budget reduction process amid declining enrollment and reduced reimbursements

Superintendent Claudia Hillman briefed the board on the priority based budget reduction process the district will use to identify recommended reductions for the 2025'26 operating budget.

Hillman said the district has recruited more than 60 community volunteers plus six students from the District Youth Council to serve on multi'week teams that will meet to generate and vet ideas. She outlined the timeline: three community committee meetings in February (the first scheduled the evening after the board meeting), a public community meeting on March 11 to review proposed reductions with the full community, a presentation of revised proposals at the April 14 board meeting, and final action to set budget targets at the April 28 meeting.

Hillman said the district faces three primary pressures: declining enrollment driven by lower birth rates and a limited housing inventory; new or expanded state and federal requirements; and state funding changes. She cited specific fiscal impacts that administrators have quantified: an anticipated reduction in special education cross'subsidy reimbursement because the state is prorating the program to about 95%, producing roughly $525,000 less revenue than expected; a potential $217,000 liability if the legislature does not fund summer unemployment program costs for hourly workers; an estimated $174,000 employer payroll cost tied to the state family medical leave payroll tax; and a TRA increase estimated at about $225,000.

Hillman emphasized the distinction between capital (bond) funding and operations, noting that the recently passed bond referendum will not be available to cover operating deficits because state law separates those revenue streams. She also reviewed open'enrollment figures and student movement: traditional district-to-district open enrollment shows the district receiving 489 nonresident students while 292 students open'enrolled out to other traditional public districts; larger counts of students leaving the district (867) include charter, online and private school enrollments and homeschooling and therefore reflect sources beyond traditional open enrollment.

Board members asked about committee materials and data. Val Merdersdorf explained the budget packages to be provided to committee members: summary tabs, line'item detail, position FTE and hours (no staff names), and participation details for activities with revenue. Hillman and Merdersdorf said administrators would convert community ideas into actionable reduction recommendations and return those proposals to the board after committee review. Hillman said special services (special education, EL, Title, health services) are constrained by federal/state maintenance'of'effort requirements and could not carry a pro rata reduction, so the district redistributed roughly $700,000 of that target to other teams to reach the overall $6 million goal.

Hillman asked the community and committee members to approach the work with an open mind and respect. The board did not take action at the meeting on specific reductions; the resolution authorizing administration to make recommendations for program and position changes (required annually to enable potential staffing changes) was considered and passed later in the meeting.