Beaverton Schools Budget Passes, Avoids Teacher Layoffs. Here's How.

By Elizabeth Miller (OPB)
Beaverton, Ore. June 25, 2019 4:45 p.m.

Two months ago, the Beaverton School District faced a $35 million budget gap, meaning hundreds of possible teacher layoffs and increased class sizes.

But the board passed a $507 million budget Monday night that takes care of the gap without massive teacher layoffs.

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“There will be some transfers and that will be difficult for some people but the bottom line is people will have jobs,” said Beaverton Superintendent Don Grotting. “We were able to maintain some of our young teachers.”

How They Did It

District leaders shortened the school year by five days, saving $9.6 million. And there were 143 staff reductions, including specialty positions and central office roles in offices like Human Resources or Facilities. The additional central office staff reductions cut another $4.6 million.

They also used $18.3 million of reserves. Interim Chief Financial Officer Jim Scherzinger says that won’t be an option next time around.

“When you’re drawing on the reserves that much, that’s a one-time event,” Scherzinger said.

Scherzinger received a call from Grotting about six weeks ago, asking him to step in after the previous financial director resigned. With experience in the finance offices at the Oregon Department of Human Services and Portland Public Schools, Scherzinger has a deep background in budgets.

He started the Beaverton job in the middle of the district’s budget process and helped redo the entire budget.

“Normally, building a budget takes six months or so,” Scherzinger said.

Looking at last year's budget and the one passed by the board Monday night, part of Scherzinger's job was to look at how the district ended up with a million-dollar budget hole last year.

Beaverton officials cited increasing pension costs and underestimated salary costs as reasons for the initial budget gap.

The funding issues caused concern and frustration from the public.

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“Part of it [building the budget] was to make it as transparent as we could, so that people would at least believe the numbers were accurate,” said Scherzinger.

Scherzinger is also working on an analysis to figure out what went wrong.

“This is what I’ve committed to the board,” explained Scherzinger. “To work with the staff here to go through exactly what happened and document all the reasons that things went awry, and the things that went well. And then, what are we going to do about it to be sure it doesn’t happen again?”

He said he's already found a potential problem with the way salaries and benefits are calculated.

“There are some system improvements that could really help,” he said.

He predicts he’ll be able to share his report with the Beaverton School Board in August, at the first meeting of the 2019-2020 school year.

Looking Forward To Next Year

To prevent class size increases, district leaders decided to dip into the reserves for about $18 million. That leaves $28.8 million in the district’s reserves.

Scherzinger said the district needs a more sustainable budget moving forward. He thinks money from the recently passed Student Success Act could help.

“Part of what we’re doing is withdrawing from the reserves to maintain the staffing ratio ultimately hoping that the new funding will give us the resources to keep that ratio up,” Scherzinger said.

Those funds won’t be available until fall 2020 and may be delayed even further if the tax on Oregon businesses ends up on the ballot.

The Beaverton School District also has a population problem to deal with. After decades of growth, student enrollment is slowing down – maybe even declining.

And the demographics of Beaverton students are changing. The district may not be able to rely on extra state funding that English language learners, or low-income students bring.

“That’s a very different situation,” said Scherzinger. “In the past, it [the district] was used to having – because of the growth – new revenues would come in every time a new student walked in the door.”

Scherzinger will likely be back to enjoying retirement by the time the board votes on next year's budget. But he says the district has a lot to think about moving forward between flattening enrollment, continuing PERS costs, and potential new funding from the state.

“This is a blip in the history – it’s a big blip, I’m not trying to minimize it, it’s a big blip,” said Scherzinger. “But I think with the right practices and a little more transparency that we’ll be able to manage through it.”

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