The Mountain View–Los Altos (MVLA) school board on Monday accepted the district's unaudited actuals for the 2024'25 fiscal year and discussed factors that produced a multi-million-dollar deficit and a tighter-than-planned reserve. The board voted 4'0'00 to certify the report after administrative presentations and discussion.

District administrators told the board the unaudited actuals show an overspend of roughly $3.15 million for the year and that the district's unrestricted reserves are about $277,000 below the board's 17% target. "This year, we overspent unrestricted by 3,152,000," said Elvis, a district finance presenter. Associate Superintendent Mike placed the unaudited actuals in context: "It's that time of year where we come and look at budget numbers, but this time we're looking in the rearview mirror."

Why it matters: the unaudited actuals close out the prior fiscal year and become the beginning balance for the current budget. Administrators said the numbers will be used to update the district's first interim budget in December and to set staffing and expense projections.

Key drivers and clarifications
- Retroactive salary increases: Administrators attributed a large portion of the overspend to a negotiated 4% retroactive salary increase that became final late in the fiscal year and therefore was not included in the estimated actuals used to build the adopted 2024'25 budget. "The negotiated retro was approved near the end of the year," Elvis said.
- Instructional materials and subscriptions: Textbooks and subscription costs contributed to higher expenditures than estimated; the finance presentation shows a substantial reclassification of instructional material and subscription spending.
- Legal, substitutes and transportation: Legal services, higher substitute costs (classified and certificated) and increased athletic transportation and independent-study costs were also cited among contributors to the variance.
- Restricted vs. unrestricted accounting: Administrators walked the board through how grant- and donation-related revenues are recorded on accrual principles and sometimes carried to the following year if not spent in the fiscal year when cash was received.

Special education and "maintenance of effort"
Administrators recast some positions and expenditures between special education and the general fund to ensure special education funds are used only for special education services. The board heard that under state rules MVLA must not reduce special education spending year over year (maintenance of effort). "We have to spend more than the prior year," Elvis said, describing the accounting adjustments that moved some staff costs out of special education when their work was not special-ed-related.

Reserves and the road ahead
Elvis presented the district's reserve calculations and said MVLA's ending fund balance leaves it just under the 17% reserve target by about $277,000. Board members called the shortfall manageable for one year given the district's roughly $25 million in reserves, but urged tighter controls going forward.

Property-tax and revenue outlook
Administrators highlighted property-tax growth as the primary revenue driver for the district and noted county assessor preliminary figures showed lower assessed valuation growth than in recent years. "The last number we got heading into this year was 4% assessed valuation growth," Mike said, and the presentation cautioned that budgeting should assume weaker growth than in past boom years.

Board reaction and direction
Board member Catherine moved to certify the unaudited actuals and asked staff for follow-up on cost-control opportunities; the motion was seconded and passed 4'0'. Trustees said they expect the new special-education director to help manage special-education costs and directed administration to use the unaudited actuals as the starting point for first interim budgeting and scenario planning.

What the action does not do
The unaudited actuals are a closing accounting of last year's finances; they do not by themselves authorize new spending. The board will incorporate the figures into the current-year budget process and will bring specific budget adjustments to the board for approval.

Provenance: The presentation, discussion and motion begin in the board's finance item where Associate Superintendent Mike and finance presenter Elvis walked the board through the unaudited actuals and concluded with the board vote to certify the report.