Finance director reports clean audit, rising PERS costs and planning for supplemental budget as enrollment trends fall

District finance staff reported a completed audit with no findings by the Dec. 31 deadline and said the general fund began the fiscal year with roughly $445,000 more than budgeted. Staff warned the board that Public Employees Retirement System (PERS) rate increases will raise employer costs materially and that enrollment declines will reduce state revenue.

What happened Finance staff reported that most deposits were posted by Dec. 31 and that the audit was submitted “with no errors or findings.” The report noted a higher-than-budgeted beginning fund balance in the general fund and a larger beginning balance in capital projects (approximately $3.6 million higher than budget) driven by timing and prior-year project coding.

PERS and budget implications Finance staff summarized announced PERS rate changes: an increase for tier 1/2 employer rates from approximately 20.81% to 24.68%, and for OPSRP (operations tier) from about 17.97% to 21.50%. Using December payroll as a baseline, staff estimated the first-rate increase would cost roughly $72,000 per month or about $855,000 annually under current salaries. Staff said side-account expirations and negotiations with unions could further increase district costs and that a supplemental budget will be required to spend down certain grant and SIA/ESSER balances by June 30 to comply with ODE timing.

Enrollment and capital projects Staff reported the district’s current enrollment is trending downward: an eight-student decline counted Jan. 6 (concentrated at the junior high), and an estimate projecting a 32-student decline next year for budget planning. The presentation covered capital-project timing and the potential to allocate bond and ESSER funds to projects such as Millicoma HVAC and Sunset roof work; staff said they will bring supplemental budget requests for board approval when project timing is finalized.

Board discussion Board members asked for clarity on enrollment counts and the timing of state school-fund estimates; staff said she expects ODE’s first estimate in March and will update the board. Members also discussed reserve strategies for the capital projects balance and whether to transfer funds to reserves or keep them in the capital fund for moving projects forward.

Ending Finance staff said she will bring supplemental budget proposals to the board (anticipated in March) and continue to monitor the state school-fund estimates and the financial impact of contract negotiations.