As we finish up 2023-2024 we have now posted all known revenue and expenditures and currently have an ending fund balance of negative $1.7M. This is before any end of year journal entries which may be required by our auditors during the annual audit process. Our auditors will be conducting the audit during the week of October 28-31. I don’t anticipate any major adjustments currently.
Looking at the 2024-25 Budget
The district implemented a new Staffing Allocation Model which allocates all staffing at the school level based on enrollment, and other measures where enrollment does not fit the allocation. This model will be used every year and will be reviewed annually for any necessary changes. This helped to right size the staffing at schools. All positions in the departments were adjusted to fit the reduced staffing needs as well. This was the method used to inform the reduction in force which was completed by the end of July.
Next, we will adjust our budget for the new contracted agreements with our associations which will include revised Cost of Living Adjustments, revised benefit amounts and revised furlough days. When these have been entered into our system, we will be able to calculate our expected salary and benefit expense for the year as compared to what is in the adopted budget. We also need to adjust several other expense categories including increases in purchased services for contracts and legal costs. This will give a clearer picture of whether further budget reductions are needed to balance the budget.
On August 9th Moody’s Ratings issued a new credit opinion for the Newberg School District. The District’s bond rating was downgraded from A1 to A3. This was expected due to the financial difficulties the district is experiencing.
Factors that could influence an upgrade in our rating include:
- Improvement in operating reserves including available fund balance ratio of above 15% and a cash ration closer to 25%
- Stable enrollment
Factors that could influence a further downgrade in our rating include:
- Further reduction in General Fund balance
- Significant enrollment declines
- Inability to make necessary adjustments to mitigate current financial situation
- Growth in leverage (debt) beyond current levels
Gayellyn Jacobson
Interim Director of Finance
Newberg School District 29J