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Board presses staff on special education funding, reserves and substitute wages amid rising costs
Summary
Board members sought clarity about special education funding assumptions, proposed reserve uses, and a staff recommendation to add $2 million for substitutes and reduce assumed turnover savings; staff said additional targeted reserves and contract mixes were included but the district would still not reach full staffing formulas.
Board members asked detailed questions on May 27 about how proposed budget adjustments would affect special education service levels and staffing.
What staff presented: staff said the FY26 proposal includes additional budgeted amounts for special education placement and contracted services: $7,000,000 for nonpublic placements, about $1,100,000 for additional contracted services, and $1,750,000 set aside for strategic improvements in special education. A board member asked whether the budget assumes ongoing increases in identified students and Individualized Education Program (IEP) needs; staff replied the budget includes assumptions but will not staff to full formula.
Substitutes and turnover: staff recommended increasing the substitute teacher wage budget by $2,000,000, saying substitute overages have exceeded budget expectations by at least $3,000,000 in recent years and can no longer be absorbed. Staff also recommended reducing the assumed turnover savings by $3,100,000 (adding $5,100,000 to funding needs when combined with the substitute increase). Staff explained some special education turnover savings did not materialize because salary savings were redirected to contracted services needed to meet students—urrent IEPs.
Board concerns and operational answers: board members pressed for clarity on how many of the positions proposed for reduction are currently vacant, whether reductions would primarily be absorbed through natural attrition, and how human resources would minimize layoffs. Michael Carson, human resources executive officer, said staff would attempt to place affected certificated employees into vacancies when possible, consider working out-of-certification placements and use professional development and induction for provisional certificated staff. Carson also said he would provide follow-up data about annual vacancy and retirement patterns to help the board assess how many reductions might be absorbed without layoffs.
Reserve policy and health fund: staff explained general fund balance projections (unassigned balance about $6.9 million) and board policy 40-70 target at about $12 million (1%). Staff said they recommended using $2 million of unassigned balance, acknowledging this would leave the district below the policy target. On the health fund, staff described about $17.9 million in balance with approximately $9 million already reserved for incurred but not reported claims and an actuarial projection from Gallagher that FY26 claims could be about $5.6 million higher than previously estimated. Staff recommended a $3 million draw from the health fund with "reservation," citing the county—xecutive's verbal support if the health fund runs short.
Legal and compliance limits: board members repeatedly reminded staff that special education is a legally mandated service and that cuts must not reduce legally required services. Staff replied they were proposing reductions to requested additions rather than to core base services and that targeted additions for nonpublic placements and contracted services remained in the proposed budget.
Next steps: staff agreed to provide more itemized data showing vacancies, turnover patterns, the breakdown of substitute spending (long-term vs. daily), and the fiscal impacts of proposed reductions to special education-related positions. No formal decisions were made May 27.
