Parkrose board warned of tight finances as special-education costs rise

Parkrose School District officials told the school board on Sept. 22 that the district’s cash reserves and near-term budget outlook are strained and that rising special-education placement costs are a primary driver.

At the meeting, district staff said Parkrose is operating on thin margins after drawing down its beginning fund balance and facing lower state revenue forecasts. Superintendent Michael and business staff outlined the immediate problem: the district needs roughly $1.7 million each month to meet payroll and other obligations, and current available fund balance is well below that level.

District leaders said special-education costs — especially for students placed outside district-run schools — have risen sharply and are compressing the operating budget. “We have right now 7 kids that are placed at that site. Each one of those kids are a $157,000 a piece. And the state department of education only gives us $11,000 for that one kid,” the district’s business presenter said, citing an example placement and the gap between placement cost and state reimbursement.

Why it matters: Parkrose’s leaders told the board the district is close to a level where, if revenue does not hold or improve, the district may need to consider difficult choices such as personnel reductions or other cost-saving measures. Staff emphasized that enrollment trends over the next several weeks will affect available revenue; the district currently reported enrollment above its budgeted projection but said that must hold to materially improve the outlook.

What officials said: Superintendent Michael summarized the finance picture and noted recent revenue movements at state level that reduced forecasted funds to local districts. He said district leaders have already reduced costs but warned that larger steps may be needed if revenue does not materialize. Business staff presented an eight-year analysis showing the district’s beginning fund balance dropped substantially from roughly $5 million to near $1.1 million over recent years, and the most recent reported ending fund balance is about $725,000.

Business staff and the superintendent identified three near-term drivers: (1) lower-than-expected state revenues, including a roughly $100,000 decrease in the student-investment (corporate tax) account relative to the spring projection; (2) growing costs for special-education outplacements and related contracted services; and (3) rising nonpersonnel costs such as transportation and contracted services.

Special education and restraint reporting: The board also received routine special-education and “all-ed” program reports. District staff said the district partners with several outside alternative and special-program schools and that capacity and compliance are monitored through required site reviews. Separately, staff reviewed the district’s restraint/seclusion reporting under state law (referenced at the meeting as SB 963 and ORS guidance). For the prior school year staff reported 23 restraint incidents involving 15 students; district staff said there were no seclusions reported for that period. Staff described training and prevention work the district offers, including non-crisis intervention (CPI) training and regular retraining for staff.

Board and community context: Board members asked about athletics, facilities and whether a future levy or bond should be pursued. Superintendent Michael and business staff said the district will present more detailed results from last year’s levy effort and a facilities assessment at an upcoming work session; they noted capital and operational needs compete for limited community support and that the district must weigh whether to pursue an operations levy (to support ongoing services) or a capital bond (to address facilities).

Votes at a glance: The board took several routine actions tied to the business meeting agenda, approving budget committee vacancies, the proposed budget calendar for fiscal 2026–27, the superintendent’s review of the student/family and staff handbooks for 2025–26, and the 2025–26 site councils. Those motions were approved by voice vote; the transcript records the motions passing but does not record numeric tallies.

What’s next: Staff said more precise November/December revenue results will clarify the district’s cash position. Board members asked for further information and said they expect budget planning and any potential recommendation for ballot measures to be a major topic for upcoming work sessions.