• Hello Coupeville School Community!

    As we have been communicating, we are having to make significant budget reductions for the 24-25 school year. We have completed the Listening Session and Survey phase of our budget process.  We have provided the information below with the Frequently Asked Questions (FAQ) to keep you informed.  For our budget process timeline please visit our Superintendent Search and Budget Meeting Dates Page. 

    Thank you!

  • Coupeville SD Budget Frequently Asked Questions (FAQ)

    Updated March 25, 2024

    The Coupeville School District, along with the majority of districts in Washington, will once again have to reduce expenses in its budget for the 2024-25 school year.  School finance is a complex issue, and people have many questions, so we created this FAQ for our school community.

    What are the contributing factors causing the need for budget reductions?

    Here is a summary of some of the top reasons:

    a. The rising costs of goods and services due to inflation (electricity, fuel, food…); inflationary cost increases exceeding inflationary adjustment in funding increased staffing costs, including benefits, salaries, substitutes, and class size overages; hired and retained more employees than funded FTEs and pay higher salaries than the amount funded per FTE

    b. Increased staffing costs, including benefits, salaries, substitutes and class size overages

    c. The loss of ESSER & CARES Act funds

    d. Inadequate funding for special education from the state/federal levels 

    e. A state prototypical school funding model that does not adequately fund school districts

    f. Reduced staff regionalization experience factor funding during 23-24 & 24-25

    g. Optimistic budgeting during a time of financial volatility

    h. Lack of specificity and timeliness of budget reporting over the past several years

    i. Unfunded mandates that accumulate over time and are never funded

    j. Lack of political will to forego important services for students

    What is the “Staff Regionalization Experience Factor” and how much money did our district lose?

    In March 2023, we learned that we were losing state funding in order to pay staff in what is called the Staff Regionalization Experience Factor, which is a subcategory of regionalization.  In 2018, our district was allocated funding based on the cost of living in the region and our staff's experience. Initially, the Coupeville School District received a regionalization factor of 1.16% more than the typical state allocation.  In March of 2023, we learned that this factor was being reduced to 1.12%, and later in the spring, we learned that it would take place over two years.  This means that the original factor of 1.16% was reduced to 1.14% for 23-24 and will be reduced to 1.12% for 24-25.  The total reduction over the two years is approximately $260,000 or about $130,000 annually.  This is one of many unforeseeable events that have taken place over the past few years and spotlights the financial volatility that has occurred since the state education finance reform in 2018.

    What is the prototypical school funding model and what are the problems with it?

    Washington state funds all school districts based on this model.  To get more information about the model and the history, here is a good summary from King 5 called “Following the money: How Schools in Washington state are funded.” Unfortunately, the funding model was built in a pre-pandemic world and post-pandemic, our students and schools need more support than the state model is currently funding.

    Are we spending more than we predicted this year?

    While we have had a history of over spending our budget, this year we are projected to spend much closer to what we had actually budgeted.  The problem this year is that our revenues have gone down more than we had projected, mostly caused by loss of federal funding and loss of Regionalization Experience Factor.

    How much is the district going to have to cut?

    In the most recent Fiscal Summary, given on February 29 by Finance Director Brian Gianello, the preliminary reduction total is 1.66 million dollars.  This reduction would include restoring 2% to our district fund balance.

    Is this the last year we will have to make budget reductions?

    Reductions are likely to take place over the next few years in order to restore district fund balance to 6% and keep up with rising costs and account for decreasing revenues.  We are hopeful that reductions in the following years will not have to be as significant as this year.  Much of this will depend on whether or not our state legislature makes changes to school district funding through the prototypical funding model.

    Is there a mishandling or mismanagement of money? 

    The district goes through annual audits, and our history has been positive.  Here is access to recent audit reports:

    Accountability Audit 2023

    Financial Statements and Federal Single Audit Report 2022

    Accountability Audit Report 2021

    We have another audit scheduled for this spring and will publicly share the report once the audit is completed.

    What does it mean to be on the NWESD 189’s financial watch list?

    To be on the watch list means that district trends may lead to the district going into binding conditions.  Binding conditions happen when a district has to borrow money from the Office of the Superintendent of Public Instruction (OSPI) and then state agencies such as OSPI and the Northwest Educational Service District (NWESD) can begin to dictate local district decisions.

    How many districts are on the financial watch list?

    There are 35 school districts served by the NWESD and 25 of them are currently on the watch list and 3 of them are already in binding conditions.

    Why has the district borrowed money from Capital Projects?

    In February of 2022 our community approved capital projects for the school district.  These funds must be used on capital projects and cannot be used for other purposes.  However, the district can choose to borrow money from capital projects to temporarily pay bills but must pay the money back within one calendar year.  Having this flexibility has allowed us to pay our monthly bills, including payroll, and also keeps us from potentially going into binding conditions.  This is a fairly common practice that districts use to stay out of binding conditions.

    Is the school district still completing the capital projects approved in February 2022?

    Yes!  However, the implications of having to borrow from capital projects mean that we are completing projects at a slower rate than we had hoped.  Going at a slower rate allows us to keep funds in place in case we need to borrow money to pay for monthly bills.  Once the weather has warmed up enough we will be able to finish the tennis court project and then begin on the softball field renovation this summer.  We also plan to replace the seating in our Performing Arts Center (PAC) this summer.

    How is the district involving school stakeholders in budget decisions?

    We are currently planning for “Listening Sessions” where board members and our finance director will provide information regarding the budget.  During these meetings they will take feedback and questions from those in attendance.  The district will also put out a survey at the end of next week to get more feedback and questions from our community.  In April, we hope to be able to provide opportunities for feedback again once we have announced the items on our reduction list.  For a current schedule of these listening sessions, please see our Sup Search and Budget Dates Through April Document.  

    What is the timeline for budget decisions?

    Please see our Sup Search and Budget Dates Through April Document.  In addition, any certificated staff reductions must be done by May 15, and our final budget for 2024-2025 must be done by the end of July.

    Don’t students and staff need more support right now instead of less?

    Yes!  The most unfortunate aspect of these reductions is that after the pandemic, we see that students need more support than ever.  Students not only have learning gaps, but there is a significant increase in health and well-being issues in our school community.  This is extremely unfortunate timing for public schools that have endured so much over the past few years.

    How can we stay informed on the school district’s finances?

    We will continue to send out updates, and you can always visit our Board docs page.  We will also update this FAQ and share the updates with you.

    Who will make reduction decisions?

    The administration will make reduction recommendations to the board, and the board will have the final decision-making authority over the reductions.

    Why has being accurate with budget projections become so challenging in recent years?

    The district uses various State projection and financial worksheet templates to project budgeted amounts.  School budgets are subject to high volatility and are heavily impacted by adverse timing issues:

    a. Expenses: The majority of a district’s expenses are contractually obligated in advance based on projections during the spring before a school year and cannot be changed during the school year. A rough estimate is that ⅔ of a district’s expenditures are untouchable once a school year begins.

    b. Revenue: Districts do not know for sure the amount of carryover dollars that will be available to spend in a new budget until after it has been adopted. Budgets are adopted in the Summer based on a projection of an ending fund balance (the carryover from the prior year) rather than the actual fund balance, which is not finalized until the Fall following the conclusion of the year.

    c. Revenue: The majority of a school district’s revenue is based on projected student enrollment and adjusted throughout the school year to reflect actual enrollment.

    d. The mismatch in timing for setting actual expenses and revenues makes it extremely difficult for financial leaders to predict enrollment and/or ending fund balance as there are myriad of volatile financial drivers that often influence and convolute the bottom line.

    Why is it important to have and maintain a reserve Ending Fund Balance (EFB)?

    A healthy EFB is good for employees and students. A reserve EFB provides job security for employees and assists to stabilize finances because it provides a buffer from year-to-year fluctuations in enrollment or unforeseen expenses.  An insufficient EFB puts new employees in jeopardy of job loss almost every year. Revenues do not come in twelve (12) even monthly payments and having cash in the bank allows the district to cover monthly payroll in months when payroll exceeds revenues received (without borrowing from other funds and paying interest, which subtracts from spending on educational priorities). A healthy EFB also helps bond ratings which would help us pass any future school bond levies for new capital projects such as a new building for Coupeville Elementary.

    What is the school district contributing to programs which we are required to provide such as Food Service, Special Programs & Education Department (SPED), and Transportation and how do the contributions compare to neighboring school districts?

    Most, if not all, school districts run deficits in the Special Programs Education Department (SPED), Transportation department, and Food Service department.  Having said that, it is a priority that we are providing services that benefit students while being financially responsible.  To help everyone understand our annual costs for these programs and how we compare with nearby districts we have created the following Budget to Actual Food-Sped-Transportation Document, which includes the past five years and projections for the remainder of this year.  The overall summary evidenced by these documents is that the past five years have been very volatile with changing requirements and funding changes on a yearly basis. Here is a quick summary of each area:

    Food Service: This is the area we have had the most volatility the past five years with constantly changing requirements, funding, and delivery models.  At the end of last year we saw that we were contributing more to the program than was budgeted and we did not feel that the increased costs to the district were sustainable.  Some of the factors in the higher than expected contributions in 22-23 were:

    • Increased staffing post pandemic response
    • Staff pay increases

    • Food cost increases

    • Decreased participation due to meals no longer being free for students post pandemic

    In the spring and summer of 2023, we made some significant changes that, based on this year's projections, will save the district over $160,000 dollars as we have reduced contributions from $364,696 to a projected $202,370.  To see how this compares to nearby districts please review the document in the link above.  Some of the factors in these improved financial outcomes include:

    • Reduction to the total number of staff members beginning in April of 2023

    • Maximized grants and food sourced available from OSPI

    • Increased participation due to meals being free at Coupeville Elementary thanks to the WA legislature in HB 1230

    • Added breakfast meal service at the elementary school

    • Directors to pay reductions

    Transportation: This area has also been volatile, as we have had years where we nearly broke even and years where we contributed well over six figures. Due to the work of our department and the creation of greater efficiencies with our routes, we are currently on track to break even this year.

    Special Education: This area is very difficult to project and budget for as the needs of our student population continue to change.  While we make significant annual contributions to special education, we do everything possible to serve students and be fiscally responsible.  Reducing annual contributions in this area is extremely challenging as most of the services provided are legally required for our students.  We will get more help from the state in special education this year as they are slightly increasing funding.  This will still not fully fund special education for us or other districts but it will likely lead to us decreasing our annual contribution.