David Douglas outlines tiered plan to cover multimillion-dollar budget shortfall as federal grants face cuts

David Douglas School Board members heard a presentation Jan. 23 from district staff laying out updated revenue projections, a multi-tier reduction plan and looming federal grant uncertainty as the district prepares a budget for spring.

Superintendent/Presenter (identified in the meeting as Sebastian) told the board the district had been tracking a deficit and must ‘‘by law, balance it,’’ and described updated enrollment and revenue data that narrowed an earlier $22 million shortfall estimate. "We had about a $22,000,000" projected deficit previously, the presenter said; updated numbers and targeted freezes now put the likely reductions to balance the budget at roughly $6,500,000 in a best-case projection.

The presentation laid out four tiers of reduction considerations. Tier 1 would produce roughly $8.8 million through central-office, maintenance, transportation and school staffing adjustments, including class-size ratio changes that would reduce licensed teaching FTEs at elementary, middle and high school levels. Tier 2 would add eliminations such as building principals and assistant principals to reach about $11 million. Tier 3 and 4 would cut deeper into student-facing licensed staff and instructional assistants and reach as high as $13 million to $16 million, staff said.

Why it matters: District staff emphasized the decisions will affect personnel, services and classrooms. One presenter told the board, "In the school district... 85% of the budget from the state school fund is people," stressing changes will have personal impacts on staff and students. Staff also warned many potential reductions are only partially mitigated by vacant positions and attrition, and that bargaining-unit processes and seniority rules constrain how reductions would be implemented.

Key revenue and grant details presented - Updated enrollment: presenters said ADM/W figures reported in period 2 rose compared with last-year estimates, increasing projected state school fund revenue; the district reported period-2 ADM numbers are higher than earlier estimates. - State school fund assumption: staff said they are using the governor's recommended budget figure of about $11,360,000,000 as a working assumption but cautioned the final number will depend on legislative action. - One-time and other adjustments: staff cited a higher beginning fund balance than assumed, increases in local taxes, grant indirects and interest earnings, and moving eligible expenses into grant funds as drivers reducing the gap. - Title grants at risk: district grant managers warned that federal Title I allocations (this year's allocation cited at about $3.9 million) could face a 25% reduction under current federal proposals; that level of cut would jeopardize district-funded positions now paid from Title I, including student behavior specialists. The presentation said Title II, Title III and Title IV funds also face uncertainty and that the district has been transferring smaller federal grants into Title I to cover staffing costs for several years.

What staff proposed and the process ahead - Class-size targets and FTE: staff showed the math behind changing class-size averages (for example, an elementary average from 25 to 27 could free roughly nine licensed FTEs) and said changes would be enacted in the staffing allocation process the board approves this spring. The presenters stressed averages would increase and that student distribution is uneven across grades, which complicates exact impacts at individual schools. - Use of vacancies and attrition: staff repeatedly said many of the positions included in reduction scenarios are currently vacant; they promised the board data on how many of the identified FTEs are filled vs. vacant to better show real personnel impacts. - Timeline and legal constraints: staff cited ORS 294-426 (the local budget law referenced during the meeting) and said the budget committee may not deliberate on the budget document as a body before its first meeting; to avoid violating the law, staff labeled materials as "reduction considerations" rather than a proposed budget while the committee process proceeds. Staff also noted licensed-staff notification timing (renewal and reduction-in-force rules) and said they aim to give at-risk employees early notice before renewal letters go out.

Other funding and policy notes - Special education reimbursement: staff said a bill seeking to increase state special education reimbursement from about 11% toward 15% could bring the district an estimated $3 million–$3.8 million if fully adopted; high-cost disability reimbursement legislation could produce additional savings in the $1.7 million range if it advanced. - Technology and capital items: staff identified planned but unfunded priorities including Chromebook replacement (~$500,000), an online-academy curriculum licensing renewal (Apex, previously a 3-year cost of about $262,000), and a necessary phone-system upgrade, among other items. Those priorities may be trimmed depending on the final reduction level.

Board questions and next steps Board members asked for clearer counts of filled versus vacant positions among the proposed reductions; staff agreed to provide a breakdown and to explain how many eliminations would be actual layoffs versus not refilling vacant posts. Staff said they are coordinating with human resources to plan outreach and support to employees should reductions be required.

Staff said they will continue to refine numbers when the state provides updated school-fund calculations (staff said the State typically updates districts in late winter and that another update might come in February or March) and that they expect to present a proposed budget package in time for board review before spring break. The district also said it will continue legislative advocacy for school funding increases and for bills that would raise special-education reimbursements.

Ending: District staff characterized the presentation as a working launch of an evolving plan and encouraged continued board engagement. They offered to meet with board members individually or in small groups for follow-up discussions before returning with updated, more detailed financial and staffing counts.