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Kent School District faces budget deficit as teachers negotiate new contracts

The Kent School District admitted Friday that it projects a multi-million dollar deficit when it’s fiscal year ends August 31. (Photo: KOMO News)

KENT, Wash. - The Kent School District admitted Friday that it projects a multi-million dollar deficit when its fiscal year ends August 31.

The statement comes at a time when the district has been in on-going negotiations with its teacher’s union, the Kent Education Association, regarding a new contract. The old one also ends August 31.

But, by declaring a deficit, the district must notify the Office of the Superintent of Public Instruction that it will enter into what’s known as a "binding condition." State law says districts must notify OSPI when they're in a deficit and have exhausted their financial reserves.

A spokesman for the Office of the Superintendent of Public Instruction said it’s received an informal inquiry from the district that it may have to enter into a binding condition.

It can be best describe as mandated financial counseling.

“Rare, maybe one, two or no school districts a year, statewide enter into a binding condition," said Nathan Olson, a spokesperson for OSPI.

For the past two years, the district has been working to reduce operating costs with spending and hiring freezes.

Kent Education Association President Christine Padilla estimates it will lose.

"More than 50 but less than 100 certified teachers this year through attrition that won’t be replaced," he said.

At the beginning of the 2016-2017 school year there were roughly 1,800 certified teachers district-wide. That number is now closer to 1,740.

“I’m not shocked by this,” said Padilla. “For two years we've been meeting almost monthly and telling the district, you are overspending and if we don't change this course of action we are going to end up in the red.”

That it appears to have happened.

Speaking on behalf if the district’s leadership Friday, Kent School District spokesman Chris Loftis said in a statement: “As this fiscal year closes, in-depth financial analysis has led to the conclusion that the District will end the year in a negative cash position."

The deficit is estimated to $6.9 million. Loftis said the overall district’s operating and capital budget will be nearly $400 million this year.

He goes on to say the issue was not overspending but, “multi-year trends of increasing costs have led to a steady decrease in the fund balance or cash reserve.”

But, there will be a new wrinkle as the district and union negotiate.

It’s inevitable the district will find itself in a binding condition at month's end and must acknowledge it’s deficit to OSPI.

Padilla believes the state could then play a role in how the district negotiates a new contract.

“Because it’s so new, and so uncommon we don't know exactly what that means,” she said.

The district’s statement also said its working with the Puget Sound Education Service District and the Office of Superintendent of Public Instruction on the recovery plan, stating: "The District is committed to financial transparency and accountability and continues to move forward in addressing the educational needs of our students, supporting our employees, and meeting our responsibilities to all stakeholders.”

The time going forward will be rather unusual.

The Kent School Board has set August 23 as the date to adopt the budget for the 2017-2018 school year. But, the teachers have scheduled an August 29 vote on a potential new contract – just three days before the start of the school year.

“I’m not going to recommend a strike,” said Padilla.

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