Ashland School District general fund $558,000 in the red; property tax revenues down $300,000 

By Holly Dillemuth, Ashland.news

With continuing budget woes at Ashland School District that mirror other districts in the state, Superintendent Joseph Hattrick announced in a staff-wide email Wednesday morning he is implementing a hiring freeze, a tightening of the policy since the Ashland School Board met on Sept. 12. 

“As you know, when I joined this incredible district, I understood that one of the challenges we’d face together is addressing our budget,” Hattrick told staff members in an email early Wednesday. “As we finalized our financial reports from last year, it became clear that our situation is more serious than initially expected, leaving us with a beginning fund balance of approximately -$558,000. I understand that this may feel overwhelming, and it’s not the kind of news anyone wants to hear. However, I want to reassure you that the leadership team and I are fully committed to tackling this issue head-on, with the shared goal of creating long-term financial stability for our district.”

Later in the letter, which Hattrick provided to Ashland.news, he shared the hard numbers.

“(I)t’s clear that the Ashland School District cannot continue to operate with an increasing deficit,” he said. “Our goal is to end the school year with a 4% reserve—about $1.5 million—which will get us closer to the 8% cushion we need to prevent future financial strain. To help us reach this goal, the leadership team has implemented a temporary district-wide spending freeze. This includes a pause on new hiring and non-essential expenditures.

“Please rest assured that no school will go without necessary supplies, and critical operations will continue as usual,” he added.

Hattrick asked staff members to consider how they might contribute to the financial health of the district by being mindful of their spending decisions. 

“Small actions can have a big impact,” he said. “Here are some examples of ideas to consider:

“1. Encourage students to write down math problems in their notebooks rather than photocopying worksheets.

“2. Reevaluate field trips to determine if they are essential, or explore ways to share costs.

“3. Get creative with classroom supplies—sharing resources or finding alternative materials can go a long way.”

Over the past week, Hattrick said the district has initiated a detailed budget analysis process that includes the following:

• A line-by-line review of expenditures to identify areas of overspending

• A thorough evaluation of school and departmental expenses

• A review of (district) systems to find efficiency and cost-saving opportunities

“I understand that any discussion around the budget may cause concern, but as promised, I will always communicate openly with you, whether the news is positive or challenging,” he added. “Now more than ever, we need to work together. Over the next month, I will continue reviewing our spending patterns, and plan to share my findings and next steps in November.”

Hattrick said the district has already made some progress toward improving the financial health of the district through measures implemented this summer and fall, such as:

• Strengthening internal controls to reduce purchasing card expenditures

• Implementing a district-wide pause on overtime

• Enhancing human resources (HR) processes for greater efficiency

• Maximizing the use of grants for personnel

Hattrick initially mentioned a more limited go-slow policy on hiring during an Ashland School Board meeting on Sept. 12 that would evaluate all new hires going forward, following a presentation of the June Financial Report by Business Services Director Scott Whitman. 

In the report, Whitman shared that budget projections for Ashland School District’s $40 million budget are worse than originally planned, including a $558,000 deficit in the district’s general fund and $300,000 less than projected in property tax accruals for the months of June and July, according to Whitman, though Whitman, backed by Hattrick, believes the district can recover the funds by continuing to weigh whether to make new hires.

Whitman said the district has reduced positions and not filled open positions this year, helping the overall effort to recover the deficit. In a previous Ashland.news interview, Whitman said that the vast majority of district spending – 85% – is on staff. 

Since property taxes are part of the state school fund formula, the deficit this year will be made up in the current year, according to Whitman. 

“Expenses came in more than I had projected (earlier this year), and what it means with the decrease in revenue and the increased expenses in the June and July accrual period, the general fund … ended up in the negative this year by about $550,000, and that’s not where … any of us would want to be if we were looking at our personal checkbook and certainly not in the public school district’s general fund,” Whitman said.

From his perspective as of Sept. 12, the same thinking applies.

“From where we stand now, we just have to be diligent in evaluating openings that happen,” he said.

“Most of our expenses go toward staffing and positions, so salaries and payroll benefits. So the biggest thing we can do is keep 100% of attention on our openings as they occur and work through this.”

“That leaves us with serious work to do this year,” Whitman added. “A challenge to get that recovered.”

“It’s not where we want it to be or (where) I had projected we would be,” he said. “So some of that falls on me and making sure that I … bring you better information going forward, and giving ourselves better information to work with as we plan for this year.”

School board member Russell Hatch questioned how the district’s property tax accruals were so low.

“It has to do with the pace of payments as property taxes come in and are collected by Jackson County,” Whitman said. 

“The assessed value grew significantly in Ashland as it does every year,” he added, noting a 3.5 to 4.5% increase each year. “It’s just the collection rate lagged a little bit more this year.”

Hatch also asked what the district is doing to create a clearer projection of budget numbers going forward.

Whitman noted that the district is “ratcheting down” on purchase cards used for building expenses and classroom supplies, aiming to centralize the purchasing process at the district. He also added that June payroll was impacted by an earlier release date from school and earlier beginning of summer work crews.

“We need to do a better job throughout the year making sure staff are taking vacations when they need to,” he said. “Kind of got hit with vacation payoffs towards the end of the year.”

School Board chair Rebecca Dyson emphasized that many of the budget issues experienced at the district level are not isolated to Ashland alone.

“Our Legislature comes up with these wonderful ideas, but they become these unfunded mandates,” Dyson said, referencing Paid Leave Oregon as one.

“They’re putting this enormous pressure on districts,” she added, in terms of footing the bill.

Hatch also emphasized he wants the public to know that the school district is limited to the amount of funding it receives from the state.

“Everybody here agrees, that everybody here involved deserves a living wage, they deserve cost of living allowances,” Hatch said. “Parents prefer smaller class sizes. All of these things are desires that that we have as a district, but we get a certain amount of money from the state and that’s it, and so we end up in this painful position of trying to triage all of these things … and though there is always work to do on managing our funds and being as transparent as possible … There’s also an argument to be made about … trying to get all of our community involved in communicating upward toward the Legislature at how important this is.

“We really need as many voices as possible,” he added.

Email Ashland.news reporter Holly Dillemuth at hollyd@ashland.news.