Lake Oswego legal budget committee approves 2025–26 budget resolution after multi‑fund review

The Lake Oswego legal budget committee voted to approve a resolution adopting the district's proposed 2025–26 budget and appropriations and forwarding the package to the full school board for final action.

The committee's approval followed staff presentations on the June state revenue forecast, projected reductions in staff FTE, and detailed reviews of the district's general fund, grant funds, capital projects, debt service and other special funds. Dr. Shealy, who opened the session's strategic-perspectives update, said the June economic forecast was "disappointing," and noted a drop in corporate activity tax collections. "We did get the PERS rate relief at 1.68 percent, which equates to about $900,000 for Lake Oswego each year for the next biennium," Dr. Shealy said.

Committee members then heard a final review of the general fund from Mr. Kessler and related presentations by Margaret on student activity, nutrition and other funds. Kessler summarized personnel adjustments and said materials in committee packets detailed a reduction of 53 classified FTE in the general fund and a re‑categorization of attrition across employee groups. He also summarized the grants fund outlook and noted that both the Student Investment Account (SIA) and IDEA grant projections were lower than prior years.

Key numbers and program notes discussed at the meeting: - Classified staffing: packet materials and Mr. Kessler's presentation identified an expected reduction of 53 classified FTE included in the proposed general fund budget. Kessler said those reductions are primarily concentrated in the district's 1220 and 1250 functions. He also described continuing voluntary resignations/retirements that will shift the mix between attrition and layoffs through the summer. - Grants: staff presented a lower grants revenue projection for 2025–26, with the SIA modeled at about $6.75 million and the IDEA allocation budgeted at $950,000 for the coming year. Those changes contribute to a grants‑resources total in staff materials of roughly $10.7 million for 2025–26 and a grants‑side FTE reduction from about 77.95 to 72.78 FTE in the proposed budget. - Foundation/community contributions: committee materials showed the foundation donation line originally listed at $2,000,000. Staff told the committee that foundation leaders indicated $2,000,000 was likely too high, and that the foundation had moved to a projection nearer $1.1 million; staff said the financial model will be updated to reflect a $1.1 million assumption while the budget appropriation remains conservative in the event the foundation board revises its target. - Capital projects and bonds: staff presented proposed capital appropriations of $58,565,000 for facility acquisition and construction for 2025–26 tied to the district's 2021 bond program. The district completed a bond sale this week and reported net proceeds of just over $29 million on par value of $27.3 million; staff said those proceeds are reflected in the beginning fund balance for the capital projects fund. Staff also reviewed amortization schedules and summarized principal and interest expectations for existing debt. - Debt service: staff presented the debt service fund schedules and noted two major categories: general obligation debt (lump‑sum debt service) and PERS side‑account debt. Materials reflected principal schedules including an identified general obligation amount and a PERS pension bond amount; staff said the debt service fund is the district's most certain appropriation area because the payment schedules are fixed. - Lake Grove Swim Park: staff summarized the separate Lake Grove Swim Park fund (a special general‑government fund). The fund accounted for a $580,000 interfund loan from the general fund (1% interest) and a resulting long‑term repayment schedule with roughly $62,000 in annual debt service over 10 years.

On the vote, Director Hartman moved to accept the resolution approving the budget; a board member identified as Sarah seconded the motion. The committee chair called for the ayes and the chair declared the motion carried; committee members closed the legal budget committee's work and forwarded the adopted appropriation ceilings and resolution to the school board for adoption of the final budget.

Committee members asked follow‑up questions on contingency uses, what would happen if state revenues fall short, and whether a reconstitution of the legal budget committee would be required. Staff said there is no statutory obligation to reconvene the legal budget committee if the legislature reduces expected revenues; the school board could consider a budget amendment or other measures if lower funding materializes. Dr. Shealy and other staff reiterated that the PERS rate relief is temporary and that the district should plan conservatively.

The committee's vote concluded a multi‑hour review of nearly every district fund, including student activity funds (status quo student‑directed activity accounts), nutrition services (including new Community Eligibility Provision coverage at River Grove and other schools), enterprise/self‑insurance fund setup, and capital projects tied to the 2021 authorization.

The legal budget committee recorded no public comments and took no additional votes. The committee adjourned after approving the resolution to forward the proposed budget and appropriations to the full school board for final adoption.

Ending note: staff said the school board will consider adoption and any final technical adjustments at upcoming board meetings and that staff will update the financial model and appropriation exhibits to reflect the foundation's June board action and finalized grant allocations.