At its March 13 regular board meeting, Ashland School Board members approved a resolution authorizing the district to officially let the community know about plans to pursue a “Full Faith and Credit Loan” of “a maximum principal amount of $10 million” to stabilize its operational budget, according to a district news release issued Wednesday.

According to a notice recently published in the Rogue Valley Times, “the bonds will not be general obligations of the District, and neither the authorization nor issuance of the bonds described in this notice will authorize the District to levy any taxes outside of the limitations of Sections 11 or 11b of Article XI of the Oregon Constitution. Bond proceeds may be used to address cash flow needs and to pay costs of issuance.”

If written petitions requesting an election on the issuance of the bonds are signed by at least 5% of district’s electors, and filed with the district superintendent’s office on or before May 19,  the question of issuing the bonds shall be placed on the ballot at the next lawfully available election date.

On Thursday, the district sent out a separate news release clarifying use of the word bond. It stated: “Due to the required language in the notice — particularly the use of the term ‘bond’ — the district wishes to clarify that this borrowing is not a capital bond, which typically requires voter approval and is repaid through additional taxes. Instead, the borrowing would take the form of a Full Faith and Credit Loan, similar to a personal loan that an individual might take from a bank to manage financial stability. This type of loan allows for a structured repayment schedule over a reasonable period and will also resolve the districts cash shortfall.”

Due to declining enrollment since 2019 of upwards of 450 students, the district needs to cut $2.2 million of its $40 million budget, as reported by Ashland.news in early December.

The district’s primary funding source — the State School Fund — is allocated on a per-student basis. Reductions in enrollment have directly impacted revenue.

In response, the district has begun the process of right-sizing its budget, ensuring that expenditures align with available funding, according to a news release.

School district Superintendent Joseph Hattrick described the district’s predicament in December as facing a $7 million budget deficit spanning through the 2027-28 school year. The district was gifted $890,000 from an anonymous donor in December, saving the district $2.2 million.

Hattrick said he was originally looking at furloughs up to 13 school days back in December, as well as a mid-year reduction in staff, which would amount to about $900,000, but avoided those cuts, saving $2,229,000 for the 2024-25 school year.

As part of this process, the Ashland School District recently published a notice in the Rogue Valley Times, in compliance with Oregon law, which requires public notification before any long-term borrowing (exceeding 13 months) for operational purposes.

The resolution was recommended by Interim Business Manager Sherry Ely and Hattrick. Hattrick said that, while this action will not eliminate the district’s current financial deficit, it will help distribute the shortfall over multiple budget cycles, providing time for the district to rebalance its budget responsibly.

The loan will be repaid from the district’s general operating funds and will not result in any additional taxes for Ashland residents, according to Hattrick. The longer repayment period will allow for manageable annual payments that fit within the district’s existing budget framework.

This step is part of a broader, multi-phase strategy to restore the district’s long-term fiscal stability and, according to Superintendent Hattrick, “is a critical part of our multi-phased approach to stabilize the district’s finances and ensure long-term success.”

This action is a key component of the district’s multi-phased financial recovery plan, which was first presented to the district board and the community in November and December through board meetings and a series of five community listening sessions.

“These sessions provided an opportunity to share the findings of the district’s financial reviews and research while also gathering valuable feedback from our community,” Hattrick said in a news release. “I am deeply grateful for the grace and understanding shown by our wonderful community as we navigate these challenges. Our commitment remains steadfast — restoring the district’s financial stability so we can focus entirely on ensuring every student has the resources and support they need to succeed.”

Due to the required language in the notice — particularly the use of the term “bond” — the district wishes to clarify that this borrowing is not a capital bond, which typically requires voter approval and is repaid through additional taxes.

Instead, the borrowing takes the form of a Full Faith and Credit Loan, similar to a personal loan that an individual might take from a bank to manage financial stability. This type of loan allows for a structured repayment schedule over a reasonable period and will also resolve the districts’ cash shortfall.

“It is important to reiterate that this loan will be paid out of the district’s General Fund; not through increased taxes to residents or through existing Bond or Levy funds,” Hattrick said in the news release.

Leading this effort is the current district leadership team, which includes Interim Business Manager Sherry Ely, who brings over 30 years of school budget experience. Together, they are implementing responsible financial measures to ensure the district’s long-term sustainability, the district release said.

More info
To read the public notice: Click here 
For further information, contact district Superintendent Joseph Hattrick at joseph.hattrick@ashland.k12.or.us and/or Interim Business Manager Sherry Ely at sherry.ely@ashland.k12.or.us.