Hello everyone - in this update I go over suggested topics/questions to bring up on June 14th meeting:

1. Structured Deficit in 2024-2025 to be carried into 2025-2026.
2. Certified salary cuts in 2026-2027 and negative student impact in that year.
3. Clarity on proposed $5.5M cuts needed. 
4. Clarity on Expenditure Category 5000-5999 (detailed breakdown needed) 
5. Depleting reserves balance. 
6. Agenda item E4: Validity of Adult Program survey and clarity on fund increase/allocation based on Hanover research. Clarity on how much allocation is expected from General Funds. 
7. Agenda item E4: Clarity on maintenance fund 14 increase/allocation from General Funds. And rationale on why not allocating from measure G funds intended for maintenance. 
8. Clarity on breakdown of budget dedicated to all employees supporting schools and students directly [classified (admins and school site staff only) & certified salaries (teachers and classroom staff)] vs district classified and certified executives and administration. 

1.  Structured Deficit in 2024-2025 to be carried into 2025-2026. 

• Estimated revenue in 2024-2025 is $127.5M (based on section C of form 01 – first page of document here).
• Estimated total expenditure in 2024-2025 is $144.6M
• Estimated deficit in 2024-2025 is $17.1M
• Even with $5.5M previously proposed cuts & about $4M dip in reserves (based on Balances in Excess of Minimum Reserve Requirements document). We would still have $7.6M deficit that would carry over to 2025-2026.  

2. Certified salary cuts in 2026-2027 and negative student impact in that year. Analysis based on Adopted 24-25 MYP summary document. 

Certificated Salaries (teachers):

• In 2025-2026, projected expenditure on certificated salaries is $61,375,722.06.
• In 2026-2027, this amount decreases to $52,003,556.15.
• The reduction represents approximately 15.25% fewer certified (teacher) employees in that year.

LCFF Revenue from Enrollment:

• LCFF revenue based on enrollment is projected to increase:
• In 2025-2026, it’s $101,536,022.05.
• In 2026-2027, it rises to $103,818,029.14.
• This indicates an enrollment-based revenue increase of approximately 2.25%, suggesting a growth in the student population.

Conclusion: In 2026-2027, we anticipate a significant increase in class size and the student-to-teacher ratio across K-12 (TK teacher ratios are determined and specified by the State and most likely won't be impacted).

3. Clarity on proposed $5.5M cuts needed. This analysis is based on Form 01 document. From 2023-24 to 2024-2025. 

Estimated deficit in 2024-2025 is $17.1M (based on section C of form 01 – first page of document here)

Proposed cuts in this document are mainly from categories:

• Books and Supplies (4000-4999): 18.6% reduction or $1,152,775.80 reduction
• Services and Other Operating Expenditures (5000-5999): 5.9% reduction or $ 1,092,741.19  reduction 
• Together these account only for $2,245,516.99 of total $5.5M proposed cut amount
• Currently classified salary change is 5.7% increase from 2023-24 to 2024-2025 and certified salary change is 0% from 2023-24 to 2024-2025.
• Unclear where the remaining $5.5 million cuts are planned to come from ($5.5M- $2.25M = $3.25M)
• What is the specific impact to certified salary from 2023-2024 to 2024-2025?

4. Clarity on Expenditure Category 5000-5999 (detailed breakdown needed) 

As mentioned above services and Other Operating Expenditures: A 5.9% cut in “other operating expenditures” which has been referred to as the “catch-all” category from 2023-2024 to 2024-2025. The actual amounts changed from $18,568,295 in 2023-24 to $17,475,553 in 2024-25 ($1,092,742 reduction which is less than the total Books/material category reduction). This is where most of travel, leadership workshop and guest speaker contract expenses along with utilities etc. are tracked in this category.

The “Services and Other Operating Expenditures” category comprises approximately 12.08% of the total budget. The breakdown of this category is crucial in gaining transparency and determine adequate cuts.

5. Depleting reserves balance. 

District reserve balances for the fiscal years 2024-25, 2025-26, and 2026-27, with amounts of $18.8M, $13.6M, and $8.2M respectively based on document here. The total available reserves are expected to be 20% for 2024-25, decreasing to 5.82% by 2026-27. The minimum 3% required by law is about $4.3M which is quickly approaching by 2027-2028. This is an approximately $4M reduction in reserves every year for the next three years.

One of the primary concerns highlighted in the county letters is the risk of fiscal insolvency and potential state takeover by 2027-2028 and beyond. I’m curious to know how the board intends to address this realistic possibility by 2027-2028.

The proposed budget is inherently an imbalanced budget. A result of the last three years financial mismanagement. And the district continues to face an ongoing structural deficit well into 2026-2027.

6. Agenda item E4: Validity of Adult Program fund increase/allocation based on Hanover research. Clarity on how much allocation is expected from General Funds. 

The district’s allocation of funds to various programs often relies on survey results from Hanover. The inherent flaws in the Hanover surveys raise questions about the validity of the results.

The survey can be taken multiple times on different devices or in “incognito browser” mode. This raises questions about the validity of their participant count and data results. I have a more detailed document on this here.

Overreliance on the survey results: The results of the Hanover surveys significantly shape the expenditures and budgeted actions on the LCAP, which subsequently lead to contracts and expenditures to support throughout the year.

7. Agenda item E4: Clarity on maintenance fund 14 increase/allocation from General Funds. And rationale on why not allocating from measure G funds intended for maintenance. 

It’s essential to recognize that Measure G is intended for maintenance purposes. However, over $800K of these funds was diverted to maintenance and renovations at the FACE center. This money should have been prioritized to maintain school facilities directly, rather than using general funds (as I believe is proposed on the agenda of June 14th meeting) for maintenance. More clarity on this item is crucial. This situation highlights the district’s challenges in responsibly managing additional taxes. For more details, please refer to the update I provided on Measure G.

8 . Clarity on breakdown of budget dedicated to all employees supporting schools and students directly [classified (admins and school site staff only) & certified salaries (teachers and classroom staff)] vs district executives and administration. 

It is important to understand the comparison of overall district executive and supervisor salary allocations vs all staff and teachers who support school sites. That breakdown is not clear on the financial documents provided.  It is mentioned classified salary increase of 5.7% for 2024-2025, it is crucial to see the breakdown of this category as some DO executive salaries are included in the “Classified Salary” and "Certified Salary" category.