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Hermiston SD reports projected 12% ending fund balance; board asked to hold 10% minimum for 2025–26 planning
Summary
District finance staff reviewed enrollment-weighted funding (ADMW), state school fund estimates and reserves, recommending a continued 10% minimum ending fund balance while planning for higher PERS employer rates and a likely $5 million first-year impact from those rate increases.
District finance staff briefed the Hermiston School District Board of Directors on Feb. 24 about the district's financial position and recommended planning parameters for the 2025–26 budget.
Miss Saul, district finance staff, told the board the district is currently projecting an ending fund balance of roughly 12% of revenues for the 2024–25 year and recommended continuing to target a 10% minimum ending fund balance in board policy for 2025–26. “Weare not going to make any decisions tonight,” Miss Saul said at the start of the discussion, noting the board was reviewing planning parameters rather than adopting a budget.
Saul walked the board through revenue and enrollment drivers. The district is tracking a decline in average daily membership weighted (ADMW) of roughly 40 weighted units compared with the prior year; the presenter noted that each ADMW is worth roughly $10,000 under the state funding estimate used in district planning. She also said English-language-learner (ELL) weights are up by about 30 weights, which helps offset some regular enrollment declines, and explained the state mechanism sometimes called “extended ADMW” that uses higher prior-year counts to limit funding volatility.
Saul summarized the district's reserve positions: a biennial reserve fund balance of about $2.89 million and an ending fund balance that the board expects to draw down with one-time, strategic investments rather than ongoing commitments. She warned that projected increases in employer pension rates for the Oregon Public Employees Retirement System (PERS) will materially increase costs: district materials cited a change from roughly 3% to 13% in the employer rate that would increase district costs by an estimated $5 million in the first year of the biennium. The presenter said the district expects to use reserves and careful timing of one-time spending to soften that impact.
On the State School Fund estimate, Saul said the district's per-ADMW estimate rose slightly in the most recent update and that extended ADMW rules and corrections handled by the Education Service District (ESD) result in a modest net increase in anticipated revenue for the year (the presenter cited roughly $288,000 in aggregate improvement on the most recent estimate). She reminded the board that the formal state school fund estimate must be released by the first Friday in March and that a spring correction typically follows once final ADM is calculated.
Board members asked clarifying questions about the special-education cap (the presenter noted Oregon districts historically have an 11% cap for claiming additional special-education weights, and the district's current special-education proportion is near or slightly above that percentage dependent on how counting rules apply) and the timing of reserve use. Saul said each one percentage point of ending fund balance currently equates to about $950,000 in district dollars.
The board did not take votes on budget parameters at the Feb. 24 meeting; finance staff said they will return with the formal state estimate and additional detail at a subsequent meeting, and the board will review dollar-per-ADMW assumptions, reserve use and bargaining timelines in March and beyond.
