Dear Staff,

To all who attended employee forums this week, thank you for being there. I appreciate every one of the thoughtful questions, comments and concerns you shared.

These are challenging times and I appreciate your extra effort to stay informed and involved.

For those who weren’t able to attend, I want to share the following recap of the information shared. We’ll be sending much of this information to district parents later this afternoon. I also encourage you to review the timeline below and, if you haven’t already, to take a few minutes to look through the Citizen’s Guide to the Helena School District 2022-23 Budget.

As you’ll see, the reasons for the school funding crisis are many and complex. We’ve held on to our outstanding staffing and programming models as long as possible, offering high teacher-to-student ratios. But the time to make changes is here. Because public school districts cannot legally operate in the red, we must adjust to a funding model that no longer keeps pace with expenses.

As we do so, I want to be extremely clear about one thing: This will be a districtwide effort, which will affect all employee groups.

Here’s a review of topics discussed this week:

Ray Bjork Learning Center building to relocate

Many forum participants had questions about the decision to relocate the programs currently housed at Ray Bjork Learning Center (RBLC).

On Monday, my team met with staff at RBLC to make sure they were the first to know of the closure. Most of you are aware of the remarkable work the RBLC team does under the leadership of Principal Erin Maxwell. Unfortunately, we could no longer justify the cost of operating the Ray Bjork building while space for the programs is available in other district facilities.

A former elementary school, the Ray Bjork building has long been home to five district programs:

• Head Start
• Special Education Pre-School
• Trailhead: A program for students in need of additional behavioral and academic support
• TLC (Therapeutic Learning Center): A partnership with Shodair Children’s Hospital for students needing intensive emotional and behavioral support
• PEAK Gifted & Talented Program

These important programs and their staff will continue to serve our students. We’re assessing alternate locations and will share details after we’ve had the opportunity to finalize plans and inform the staff in those buildings.

Classroom adjustments

Another cost savings initiative has been utilizing staff attrition as well as non-renewals of some non-tenured staff. The result is fewer staff, which means larger classroom sizes for the 2023-24 school year and beyond. If you’re part of one of our elementary school teams, your principal will share details about potential changes at your school in the coming weeks, as well as how we’ll support staff with this transition.

What to expect this fall and beyond

Much of our discussion at this week’s forums centered around the district’s two-phase plan to address the funding shortfall.

The budget reduction work is being done in two phases:

Phase 1, which is now almost complete, is focused on cost reductions needed for the district to remain solvent for the 2023-24 school year– meaning the district will be able to pay salaries next year, as well as bills for operational needs such as water, gas and electricity. The relocation of RBLC programs and the aforementioned staff reductions were part of this process.

Phase 2 will focus on reductions needed for the district to remain solvent for the 2024-25 school year. This is where the biggest adjustments will be needed. Leading this work will be a Budget Recommendation Consensus Committee comprised of approximately 30 representatives of stakeholder groups such as trustees, parents, community members, certified and classified staff, students, building and central office administration, and community and business leaders.

The Committee will be assembled this spring and will work over the course of the next year to develop balanced budget options for the 2024-25 school year. The results of a community budget survey conducted earlier this year as well as the finalized Master Facilities Plan, which is now being developed, will support the committee’s work.

How big is the shortfall and how did we get here?

Another question addressed in the employee forums was how we arrived at the budget shortfall. In a few words, our public school funding mechanisms no longer keep up with expenses.

When you subtract the district’s expenses from available funding for the 2023-24 school year, for example, Helena Public Schools faces a forecasted shortage of approximately $6 million – that’s after factoring in inflationary adjustments approved by the Montana Legislature earlier this month. The inflationary adjustments were 2.7 percent and 3 percent respectively for the next two fiscal years. (State law caps inflationary increases for school districts at 3 percent.)

To provide further context, here’s what some of our real-world cost increases look like for the 2023-24 school year:

Electricity: Up 17 percent
Natural Gas: Up 46 percent
Water, sewer and garbage: Up 5 percent
Property and liability insurance: Up 15 percent
Custodial supplies: Up 30 percent

Meanwhile, the district has significant increases in safety and technology needs that need to be addressed through future levies.

Another significant factor in the budget shortfall is a gap between the cost of special education services and federal funding. We’ll be exploring options for seeking federal funding that more accurately reflects costs.

That said, I want to be extremely clear that that the school funding shortfall is not a problem of special education students or any other group. It is a problem with how schools are funded at the local, state and federal level across our nation. We will continue to work in cooperation with the Coalition of Advocates for Montana’s Public Schools to address these needs.

Thank you

I hope this week’s forums and today’s overview help answer some of your questions and encourage you to continue to share your input throughout the budgeting process.

As we depart for spring break, I wish you rest and renewal. We have challenges ahead this spring, but we also have much fun to look forward to as we move into spring sports and year-end concerts, awards and activities. Thank you for all you do to support our students every day, inside and outside the classroom.

Respectfully,

Rex

Helena Public Schools Budget Shortfall and Budget Reduction Timeline

2017: Helena Public Schools commissioned a budget and funding analysis, which forecast a significant shortfall in the district’s General Fund – the fund that pays for people and operations. A more detailed report was prepared the following year.

In anticipation of the projected budget shortfall Helena Public Schools began directing savings to an “Interlocal” fund* for future needs. These savings created a financial safety net of one-time monies that will now be used to offset the projected shortfall in the 2023-24 school year.

January 2020: Helena Public Schools began offering retirement incentives to help address the forecasted General Fund shortfall.

March 2020: The COVID-19 pandemic arrived, causing school disruptions and learning loss for the next two years. Helena Public Schools received roughly $20 million in federal relief funds (ESSER funds) over the course of the pandemic. These monies were used as intended to reopen schools, provide summer school in 2021 and 2022, and provide instructional coaches to help close learning gaps.

ESSER funds allowed the district to sustain staffing and programming levels longer than anticipated, helping with students’ academic recovery.

Spring 2023: Helena Public Schools announced the beginning of a two-year, two-phase process to balance the district’s budget.

Phase 1
Adjustments needed to make the district solvent for the 2023-24 school year include:

• Non-replacement of retiring employees and non-renewal of a limited number of non-tenured employee contracts.
• Relocation of programs currently housed at the Ray Bjork Learning Center.
• Larger class sizes for the 2023-24 school year and beyond.

Phase 2
A Consensus Recommendation Committee will work throughout the next year to make recommendations for a balanced budget for the 2024-25 school year. The committee, to be assembled this spring, will consist of trustees, parents, community members, certified and classified staff, students, building and central office administration, and community and business leaders.

The Board of Trustees will adopt a 2024-25 budget in August 2024.

Learn more about school finance in the “Citizen’s Guide to the Helena School District 2022-23 Budget.”

* School districts such as Helena Public Schools, which is technically comprised of two districts – one elementary district (K-8) and one high school district (9-12) – may direct savings from either district to an “Interlocal” savings fund.  Money in the Interlocal fund can then be tapped to support needs in either the elementary or the high school district.