Washington State

House of Representatives

Office of Program Research

BILL

ANALYSIS

Education Appropriations Committee

HB 1757

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Summary of Bill

Creates a small school district contingency fund to provide loans to small school districts in financial distress, to be repaid within three years.
Establishes a contingency fund oversight committee comprised of the superintendents of the nine Educational Service Districts to administer the account and establish loan

application procedures and eligibility maximums.

Background:

Small school districts are a prominent feature of Washington’s public school system. There are

40 districts in Washington that have fewer than 100 students, and 85 with fewer than 300

students enrolled for the 2007-08 school year. Fifty-one percent of the school districts in

Washington have fewer than 1,000 students enrolled, and serve about 5.4 percent of the student

population.

The operating budget includes general apportionment formula enhancements for small school

districts. The enhancements are projected to cost approximately $46 million for the 2009-2010

school year. The enhancements provide additional staff units for small school districts and

remote and necessary school buildings that meet certain enrollment thresholds. For example, a

K-6 school with fewer than 25 students receives a minimum of 1.76 certificated instructional

staff FTE and a minimum of .24 administrative staff FTE. During 2004–05 there were seven

small districts and eight remote and necessary school buildings with enrollment under 25 FTE,

and 32 small districts and four remote and necessary plants with enrollment between 25 and 100

FTE.

Educational Service Districts are regional entities that provide a variety of services to local

school districts and communities, including operational support and technical assistance services.

There are 9 Educational Service Districts located in regions across Washington.

Based on 2007-2008 school district financial data, there were two school districts in Washington

that completed the school year with a negative fund balance: Montesano (enrollment: 1270) and

Evaline (enrollment: 47). There are ten school districts with fund balances below 2 percent.

Summary of Bill:

The bill creates the small district contingency fund program. The program provides short-term

loans to small school districts facing a temporary short fall in funds relating to unforeseen

circumstances. Collective bargaining disputes are excluded from acceptable examples of

“unforeseen circumstances.”

School districts with fewer than 100 student FTE enrollment are eligible to apply for loans under

the program. Only the superintendent of public instruction or his/her designee may authorize

expenditures from the fund, and only at the direction of the contingency fund committee. The

contingency fund oversight committee is comprised of the nine superintendents of the

Educational Service Districts, and shall oversee the administration of the program, including

setting eligibility parameters and application procedures.

Each district receiving a loan from the fund shall negotiate a repayment plan with the

contingency fund committee not to exceed three years.