Budget FAQ

The fund balance for each of the 17 districts is as follows (spring 2024):

Spring 2024 figures:

The District’s risk management costs include risk coverage, e.g., auto, building errors and omissions, training and loss control, and managing and litigation claims.

1. Increased costs associated with salaries and benefits, which are 89% of the budget

2. Declining enrollment, which impacts revenue

3. Inflation

For the 22-23 school year, Shoreline spent 58.8% of its total expenditures on teaching, while comparable districts spent 58.3%. 

Class sizes vary by classroom, building, and district.

A teacher’s base contract covers 100% of the “normal daytime classroom teaching.” Extracurricular activities are outside of the regular school day, and the pay is covered through supplemental contracts, 

The December 19, 2023, School Board report shows these deferrals in detail. Here is the link to the report presentation: December 19 Financial and Enrollment Update. See slides 111-112. 

Contract provisions paused will return in the 2025-26 school year.

Monthly enrollment reports are posted on the District’s website: Budget Documents

The most recent levy, passed in February 2022, did not allow for key factors to improve beyond OSPI’s forecast in October 2021. The district utilized the OSPI formula template to collect funds based on OSPI’s assumptions for enrollment and inflation at that time. There will be more options, clearer assumptions, and improved transparency when the next levy options (February 2026) are explored and presented for community feedback.

The ESSER funding is illustrated in a board presentation that was held on December 6, 2022

Agenda | Minutes | Video Recording. See 2021-2022 Year-End Financial Report, pages 11-14.

Shoreline is an attractive place to live for many reasons, including the schools and proximity to the city. Housing costs have increased significantly in recent years, which may have impacted enrollment. Additionally, people decide to purchase a home for many reasons, including proximity to their workplace, family nearby, recreation activities, cost of living/housing, and educational options. As shared previously, the district has opened its boundaries to students living outside the district throughout all grades, kindergarten - grade 12. It is not typical for districts to campaign for additional student enrollment. Donations can be made, but there are strict requirements and limitations to how these are used.

Budgetary needs and costs will continue to rise, and unless the state changes its funding model, the District will not have sufficient funds to operate, and the current challenge will remain. Over the next five years, as we continue to work through the fiscal situation, collaboration with our labor partners and the engagement of our families and community will be critical to ensure the district’s financial stability. We will stay the course on already-implemented cost savings through the current year and next. The District also plans to maximize future levy support. Additionally, advocacy at the legislative level will continue.

We currently apply for and receive various grants to support programs, including state and federal grants. The District receives generous support from the Shoreline Public Schools Foundation and PTAs, which fund multiple needs throughout the District. Donations to fund programs such as extracurricular activities may be possible, but constraints such as sustainability over time would be a key consideration.

At the May 23, 2023, School Board meeting, the budget report included these slides that show current known reductions for the coming school year:

You can see the full presentation and watch the recording from the May 23 meeting

Current budget information can be found on our budget main page

• Participation and engagement with PTA, PTSA, boosters, or the Shoreline Public Schools Foundation will keep you connected to the support those organizations so generously provide.

• If your child participates in athletics at a middle or high school, there will be an option in our online payment system to add a donation to your child’s athletic fee, which will help students who don’t qualify for a fee waiver but for whom the athletic fee is a barrier to participation.

• Volunteer to help in your children’s classroom, school, and enrichment activities.

• If you see a need that’s unmet, approach the school, teacher, or PTA with an idea to fill it or bridge a gap. Even if you don’t have the time or skillset to carry out the plan, perhaps another person could take your great idea and put it into action.

• The Superintendent has:

  • Met with PTAs, student groups, staff at every school, and staff in all departments across the district to share complete information about the budget rebalancing work and receive input and feedback from those in attendance

  • Met with community organizations including Shoreline and Lake Forest Park city councils, Chamber of Commerce, and Rotary groups to share information on the status of the budget and the shortfalls the district is facing

  • Convened two rounds of several community sessions to share full information, including sessions in Spanish and a Black & Brown Town Hall

  • Convened the Budget Advisory Team (BAT) made up of diverse members to advise on the proposed way forward

  • Conducted a districtwide survey to provide community input in budget decision-making

  • Joined in local and state funding advocacy, which resulted in a substantive increase in funding for special education

  • Shared complete budget information regularly through board meetings, Friday updates to the school community, and on the district website
     

• School Board members have: 

  • Visited schools and classrooms during and outside of instructional time throughout the year

  • Joined every community information session and BAT meeting

  • Held 20 listening sessions with staff in schools March-June 2023

  • Held listening sessions with students in both high schools 

  • Received written and oral public comment at meetings starting in August 2022

  • Advocated and met with local, state, and federal legislators for additional funding and school supports

  • Shared information with the school community on the current structural funding shortfalls and how to participate in the legislative process

The following bargaining meetings have taken place or were scheduled to take place since January 1, 2023 (as of July 1, 2023)

Administrators
March 29, 2023
March 30, 2023
March 31, 2023

Confidentials
July 11, 2023

Maintenance
May 8, 2023
May 19, 2023

Mechanics
January 19, 2023
February 7, 2023
February 10, 2023
February 15, 2023
February 22, 2023
March 21, 2023
April 7, 2023
April 20, 2023
May 4, 2023

Prof/Tech
April 12, 2023
May 5, 2023
June 1, 2023

SEIU - Food Service
March 15, 2023
March 22, 2023
April 5, 2023
April 12, 2023
April 18, 2023
May 25, 2023

SEIU - Transportation
May 10, 2023
May 24, 2023
June 22, 2023
July 7, 2023
July 10, 2023
July 12, 2023

SEA
February 7, 2023
February 14, 2023
March 1, 2023
March 2, 2023
March 3, 2023
March 14, 2023
March 16, 2023
March 27, 2023
June 7, 2023
June 14, 2023
June 26, 2023

SESPA
May 9, 2023
May 10, 2023
May 11, 2023
June 6, 2023
June 15, 2023
June 20, 2023
June 23, 2023
June 26, 2023
June 28, 2023
July 1, 2023

Shoreline Children's Center
January 12, 2023
March 23, 2023

The below table shows our budgeted enrollment compared to actual student enrollment and the difference over the past several years. Our student enrollment decreased substantially in 2015 and again during the first two years of the COVID-19 pandemic. While this year we have welcomed more students than expected, the enrollment outlook does not look robust. Student enrollment is affected by low birth rates, affordability of housing for families in the district, and alternative choices for education.
As a general calculation, the district receives about $1 million dollars in funding for every 100 students.
Student enrollment is the first cornerstone of building our budget. In February or March of each year, we estimate how many students we will have in September and build our budget around serving those students and based on the revenue that is generated by that enrollment. We don’t know if our projection, and therefore our revenue, is correct until we see our students in September.

In 2018, when the Washington State Legislature provided resources in response to the McCleary lawsuit related to school funding, a number of steps were taken to equalize the resources available to schools across the state, so that one area would not have as many financial advantages over others in a less economically robust area.
In the process of making those changes, the Legislature was aware that there would be Districts who would have a difficult time attracting a quality workforce without paying regionally competitive wages, so they created “regionalization” which provided added resources to Districts situated in higher cost of living areas. For Shoreline, this started at 24% more in resources from the State. This has been reduced by 2% a year to our current level of 18%. This results in about $7 million dollars a year less in resources for Shoreline Schools.
Regionalization funding loss has been difficult for Shoreline during a time of increasing costs due to the pandemic, inflation, and inflationary increases provided by the legislature intended for “cost of living” adjustments outpacing the forecasted rates.

The IPD is an inflationary adjustment based on the implicit price deflator (IPD). Many refer to the IPD as a cost-of-living adjustment, or COLA. In the past, Washington voters approved a COLA increase for educators, but the legislature first suspended that due to their fiscal outlook and then replaced the COLA with an inflationary adjustment based on the IPD.

In 2022, due to high inflation, the State allocated additional monies beyond the IPD to fund an adjustment of 5.5%. Whatever the IPD adjustment is, that amount is added to the amount the state pays us for the salaries they fund – meaning they do not provide the full IPD amount for the staff we have funded by local levy, positions that are federally funded, or salaries that exceed state allocations to be competitive.

The State created a Prototypical School Model, which details out how many school staff are allocated based on student enrollment. This model also sets the State-funded salary rate for each type of position, plus the 18% regionalization we receive.

The Shoreline model is more robust than the Prototypical School Model. Our local levy enhances the Prototypical School Model by increasing the number of staff we have, ensuring we provide competitive compensation, and completely funding things the State doesn’t pay for at all, such as athletic programs.
For example, the Prototypical School Model provides for less than 6 school nurses for Shoreline, less than 2 school security staff, and less than 6 technology staff to support and administer all the technology in the district. With the support of the local levy, we have been able to increase the number of staff available to support our schools.

Yes. The district received just over $14 million dollars in pandemic relief monies from the federal and state level. These dollars were used to stave off the reductions that would have been necessary with less student enrollment – by keeping our educators and support staff in Shoreline and supporting our students. Other dollars were spent for personal protective equipment, our food service program, and facility maintenance items in response to the pandemic.

Our federal relief monies have been fully expended and are not expected to be replenished.

There are several important landmarks along the way to budget development:

• Enrollment projection – estimates the number of students we will have in the fall of a school year and builds the revenue outlook from that forecast. A preliminary, early projection is completed midway through each school year. This projection will continue to be adjusted/informed through the spring as we see registrations or any other indicators of increased student enrollment
• End of the legislative session, each spring, sets the state budget and resources for schools. 
• May 15th – the date by which all of our certificated staff (teachers & principals) are guaranteed to know their contract status for September. If we need to reduce staff, they must be notified by May 15.
• July 10th (adjusted for weekends) – the district must have a draft budget available for review by the public and submitted to our educational service district for review. See the Washington State Legislature code that dictates this.
• By August 31 – the final budget must be adopted. See the Washington State Legislature code that dictates this.

The district cannot wait for the end of the legislative session to project our budget and make adjustments before the May 15 deadline, which is why we have to engage in budget planning work so early each school year.

The budget planning cycle typically starts in February with the enrollment projection for the next school year. Enrollment is the cornerstone building block for projecting revenue for the next year.

We started the budget process earlier than ever in 2022, in October when we started meeting with the Budget Advisory Team. In December, we made an early projection of our potential shortfall for the 2023-24 school year. In 2023-24, we are convening the Budget Advisory Team in December, and budget planning to balance revenues and expenditures has continued from last year.

With declining birth rates and high housing costs, the enrollment outlook has not looked favorable. To support our work on this, the district has contracted with a local demographer. This demographer took a deeper look at building permits, housing, and the number of students in the Shoreline boundaries relative to the number in our schools and shared this information at a study session on March 14, 2023.

View Presentation | Watch Recording

At an April 2024 School Capacity Review and Closure Consideration task force meeting, the demographer’s report explored enrollment projections and the question of how development in Shoreline and Lake Forest Park will affect school enrollment in detail. The report included information that large numbers of families with school-age children are not anticipated to move into the housing that is being built in the area. Put simply, most of the units around light rail are too small and too expensive for most families to choose. There will be some families with school-age children in apartments, of course, but they are not predicted in the large numbers that one might assume. Declining birth rates and the increased costs of single-family homes and rent in the region are contributing to lower enrollment in Shoreline and nearby school districts.

Demographic presentation slides

 The ending fund balance is a bit like a savings account. There are two parts to it, reserved fund balance and unreserved fund balance.

If the district spends less than our revenue in a given year, the remainder is fund balance.

The reserved fund balance exists for assets we have for a specific purpose. This includes carryover – or unspent funds – from programs with inflexible expenditures. It also includes things like our inventory of food items that have not yet been made into a meal and served/sold to students.

The unreserved fund balance is liquid cash – available to use on any district expenditure.

Here’s a look at our ending fund balance over time:

Here’s a look at our estimated ending fund balance for the coming four years:

Ending fund balance is supposed to be at least 4% unreserved by School Board Policy. It is important to have funds available for unexpected expenses, such as decreased enrollment or unforeseen circumstances. It can also be used, if it grows high enough, to make investments in our school system with something such as new curriculum or other one-time cost items. Fund balance does not renew, so it should not be spent on ongoing cost items.

As we think about fund balance and what our “savings” should be able to support, here are a couple of ways to think about it if we ended the 2024-25 school year at $851,700 as projected:

• Our ending fund balance does not cover the cost of one month’s payroll expenses of $13.3 million. 

• Based on our current expenditure level in this year’s budget, divided by 260 working days, a $851,700 ending fund balance would barely cover one day of operations.

Nearly all of the money we receive from the federal government is provided for a specific purpose and may only be spent in accordance with those rules. Money we receive from the State is generally more flexible, but there are a number of requirements of things we must do that utilize those dollars. Our local enhancement levy dollars may only be used to enhance the state funding model.

The General Fund revenue we receive from the State is based wholly on student enrollment. The State pays the district during September through December based on the student enrollment we projected and reported to the State with our budget, adopted in August. We report actual student enrollment to the State monthly, and from January through August the State catches up with actual enrollment – increasing our payments if we had more students Sept-Dec and decreasing our payments if we had fewer students than anticipated.

Non-tax related revenue accounts for about $5.9 million in the 2024-25 budget year. The District can examine ways to potentially expand revenue-generating programs, however we do need to have resources we can rely on.

Fundraising is not allowable within the General Fund outside of our local enhancement levy. Most fundraisers are Associated Student Body related so that students can participate in various activities and athletics beyond what is funded by the District.

Some fees may be increased to help offset costs, but certain programs, like food services, have limitations in what we can charge. Another example of fees is preschool tuition; however preschool tuition that is collected goes to the preschool program’s costs, so this is not a revenue-generating opportunity for the district as a whole.

Further, we need to have a stable revenue stream that can be budgeted and relied upon, and additional fees may reduce participation.

In the 2024-25 year, 87% of the $182 million expenditure budget is allocated to staff salaries and benefits.

While it's understandable that community members are looking for solutions to financial challenges, the elimination of the superintendent's position would not make up the funding shortfall and could make problems worse for the district

• The superintendent’s salary is only 0.2% of the overall budget, while the budget shortfall accounts for 2.6% of the overall budget. The budget challenges we face cannot be solved by eliminating one or even several positions. 

• The superintendent serves as the “CEO” of the school system, and eliminating a position that is central to many important functions could destabilize our district and compromise our ability to deliver high-quality education. 

• The superintendent's role is integral to the smooth operation and strategic direction of the school district, and their expertise and leadership are essential, especially during times of financial hardship.

• Leadership Role: The superintendent is the chief executive officer of the school district, responsible for implementing the policies set by the school board and overseeing the day-to-day operations of all schools within the district. This role is crucial for maintaining a consistent and effective educational environment across the district.

• Expertise and Experience: Superintendents are highly qualified professionals with extensive experience in education and administration. Their expertise is vital in making informed decisions that impact the quality of education and the well-being of students and staff.

• Compliance and Legal Responsibilities: Superintendents ensure that the district complies with all state and federal educational laws and regulations. This oversight is critical to avoid legal issues that could have significant financial and reputational consequences for the district.

• Financial Management: One of the key roles of a superintendent is to oversee the district's budget, including resource allocation, financial planning, and ensuring fiscal responsibility. Their expertise is crucial in navigating financial challenges and ensuring that funds are used effectively to support educational goals.

• Long-term Consequences: While cutting a high-salary position may offer short-term financial relief, it could have long-term detrimental effects on the district's ability to provide quality education. The absence of effective central leadership could lead to decreased performance, lower staff morale, and potential loss of public trust.

The average annual salary of the 101 employees who work at the Shoreline Center is $118,592 for the 2024-25 school year.

The District must only have a positive ending fund balance (i.e. $1.00) to comply with state requirements. However, that is a financially precarious position for the District.
We do not receive our revenue in a steady, equal stream. Our revenue from the state fluctuates by month between 5% and 12.5% of our apportionment dollars. Our local levy tax proceeds arrive mostly in two large payments in April and November, aligned with property tax collection. Fund balance helps to offset those months when revenue is lower, and helps us with cash flow during those times.
If the District has little ending fund balance and needs to expend more in a month than we have, we would need to take a loan out from our Capital Fund and repay that loan with interest.
If the District projects our budget with a certain amount of student enrollment and those students do not arrive in our schools in September, ending fund balance helps to buffer those losses. In a situation when a District has a very low fund balance, any additional financial issues result in mid-year reductions, which would be very disruptive and difficult

It is estimated that the general overhead for operating an elementary school is about $1.2-1.3 million dollars. Closing a school means the students in that school need to be reassigned to other schools within our system by adjusting district boundaries for each school. This is a very extensive process and would need about 18 months to do properly.  

When the district decided to put bond and tech levy measures on the ballot for our voters, we specified within those legal descriptions of the ballot measures what the dollars can be used for, and we are limited to that scope of work. Bond money may not be reallocated. Technology levy money is able to help support in some specified areas, but we also remain committed to fulfilling our promises to our voters and complete the work we intended with the technology levy.

Proceeds from selling or leasing our facilities are directed by law to our Capital or Debt Service fund, which means they cannot be used to help support the General Fund, which is the area we need to align expenses and revenue now.
See the Washington State Legislature code that dictates this.

Our community graciously approved our local enhancement levy to support our schools in the spring of 2022. We are not authorized by the State to ask for more money – the levy amount is capped, and levy lid lifts are not available to schools.

The bottom line is that our levy is a separate, local enrichment funding source, intended for enrichment opportunities. Fully funding basic education is the constitutional responsibility of the state, but unfortunately, Washington is not fulfilling its duty to fund basic education. 

• Voters approved our local levy in spring 2022, and our district is very thankful for local support. While local tax measures are important, they are intended to fund things that “enrich” basic education, such as extracurriculars like sports, drama, and music programs. 

• Local levy dollars are very important. The levy approved by our local voters is preserving the programs that our community values but that are not considered “basic education” and therefore not funded by the state.

• The state of Washington is supposed to fully fund “basic education,” but the state doesn’t provide enough money to schools to cover their actual basic education expenses. As a result, local levies (a separate locally levied enrichment funding source) are increasingly tapped to pay for the rising costs of things that should be paid for by the state.

• Schools get funding from a few primary sources: the state and federal government, locally approved funding measures (levies and bonds), and other miscellaneous sources like grants. These funds all exist in different “accounts” and support many different things.

  • State funds are allocated based on a funding allocation formula called the Prototypical School Funding Formula, which uses an “average school” and its needs to assign funding for things that qualify as “basic education.” Basic education does not include many of the “enrichment” programs that students and communities count on, like sports, drama, choir, and band, for example.

  • Local levies and bonds are brought forward as voting measures and must be approved by local communities in order to begin collecting money for schools. Levies support education services and resources outside of what the state considers essential “basic education”. Basic education does NOT include extracurricular activities (e.g., sports, band, drama), facility updates and new school buildings, updated technology, etc.

 The District will examine ways to potentially increase enrollment as we work through this process. An online school is not a likely target, however, as there would not be adequate time to home-grow a program like that, and districts who partner with an online school provider retain little of the revenue associated with those students.

RIF is the acronym for “reduction in force” – which means the reduction of staffing through attrition or separation from employment. In the event of a potential reduction, RIF notices are required for staff holding a teaching certificate on or before May 15th of each year. The District has similar dates/deadlines for other labor partners as well, but the deadline for notice to certificated staff is set by State law.

A lot can happen between the decision to proceed with a RIF in the spring and the adoption of the budget in August. The legislature will conclude their work by the end of April if they finish on time, and other staff may resign or retire later this Spring and into the summer, thereby creating vacancies that may be able to be reduced in lieu of a RIF or bring someone back from being part of a RIF. The legislative action may provide for funding we are not aware of at this time. We also could see indicators of improved enrollment through the registration process, although we never know for sure about our student enrollment until we see our students in the fall.