River Grove Elementary students and their parents look for their class on the first day of school. (Staff photo: Jaime Valdez)

The Lake Oswego School District has reached a new two-year agreement with the teachers union — the Lake Oswego Education Association — that avoids any further budget reductions beyond the $10 million previously announced. 

The Lake Oswego School Board voted to approve the contract during its meeting on Monday, June 30. It replaces a previous contract approved last year.

The contract includes a 3.625% cost-of-living adjustment in the first year and a 3.25% adjustment in the second year. The first year also includes one furlough day on Monday, June 15, 2026. 

This means that the 2025-26 school year will end one day earlier, on  Friday, June 12.

The contract approval comes after a gloomy budgeting season when the district faced a $10 million budget deficit. This shortfall caused the district to reduce 27 teaching positions and 64 support staff positions ahead of next school year. 

The district signaled that contract negotiations could increase those cuts and suggested changing the middle school “rainbow schedule” to save on the number of teaching positions. 

The new contract includes a non-economic memorandum that maintains the “rainbow” schedule for middle schoolers — an alternating five-block schedule of 65-minute classes instead of the same seven 43-minute blocks every day. 

“Fortunately, we were able to reach a collaborative agreement that allows us to maintain our current middle school schedule and preserve the staffing necessary to support student learning,” said Superintendent Jennifer Schiele in a press release. “While this agreement reflects a compromise, it protects the core of what makes our schools strong, our people.”

The school district will extend the same benefits included in the new LOEA contract to all employees, which was part of a previously negotiated agreement between LOSD and the Lake Oswego School Employees Association. 

“Across Oregon, school districts are facing similar financial challenges,” said Schiele in the release. “We must continue to advocate for increased, sustainable funding for public education. We’re grateful to our educators, families, and community members for their commitment to our students and for uniting in support of the schools we all value.”