DRAFT CONFIDENTIAL District leadership faced a significant challenge of closing a budget deficit of $4.

6 million for the 2013-14 school year. $3 million is the result of continued enhanced staffing and program levels even after state and federal funding sources were eliminated and increased operating costs. $1.6 million is due to declining student enrollment that drives state funding formulas. District reserves were used to sustain enhanced staffing levels. Those funds are no longer available. The reduction of 57 certificated staff positions was an immediate, short-term solution to balance the budget. Many of our staff have been recalled to our schools. As of now, the reduced positions are continuing to be evaluated on the basis of student enrollment. The Board and District leadership are careful stewards of public dollars. In order to support student achievement, a strategic decision was made to use reserve funds to continue to implement enhanced staffing levels. This investment resulted in higher student achievement. After the State Supreme Courts McCleary decision, there was an expectation that the legislature would meet its constitutional duty to fully fund public education. That has not yet happened. The State Auditor has found the SKSD budget to be in compliance.

The District must bring its expenditures in line with its revenue to remain fiscally solvent. We are committed to engaging stakeholders, and making decisions based on whats best for all of our students.

The District continues to face future budget challenges and will engage stakeholders in developing a long-term solution. Superintendent Michelle Reid will meet with staff and the community to provide information and seek input. The Districts Citizen Budget Review Committee (CBRC) will be re-assembled and expanded to provide recommendations to Superintendent Reid. Revenue enhancement and cost efficiencies will be considered in addition to any recommended reductions. An independent review of the district finances will be completed and recommendations shared publicly at a Board meeting in early August. A restoration plan will also be developed in anticipation of the State Legislature fully funding public education.

We understand budget reductions impact our staff as well as our students and families. We believe solutions are found in a collaborative manner and value staff and community input. We are committed to communicating with all of our internal and external stakeholders. We will provide as much support as possible to impacted staff. Our goal is to preserve employee relationships. Staff and the community need to recognize that having an open process means we all have to go through the lack of clarity together. The hope for staff and community to recognize an open process may mean embracing uncertainty in these challenging times.