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Finance report: market value gains and $3 million revenue upside as property tax trends lag
Summary
District finance staff reported a quarterly investment volatility update and third‑quarter budget review showing improvement in market adjustments, a projected $3 million revenue increase driven by interest income, lower property tax receipts and unfilled staffing keeping salary spending under budget.
District finance staff told the board the quarterly investment volatility and third‑quarter budget reports show an improved market‑value position and a modest positive variance in the operating budget.
In the investment update, staff said market value is approaching carrying value; if the fiscal year closed at the reporting date, the market value adjustment would be a negative $2.4 million but that compares with a larger negative adjustment last year and results in a net improvement. The presenter said the district’s current average coupon on investments is about 2.95 percent and projected reinvestment rates next year could be roughly 100 basis points higher as lower‑yielding investments roll off.
On the third‑quarter budget update staff reported a projected combined revenue/expenditure variance “just over 1 percent” and said revenue was expected to be about $3,000,000 greater than budget, primarily driven by higher interest income. The presenter cautioned that property tax receipts are “several million dollars lower than we would traditionally see,” a trend attributed in the presentation to timing of refunds from the county rather than a single identifiable cause.
Expenditure drivers include salaries projected about $435,000 under budget because of unfilled positions (staff cited two MTSS coordinator positions budgeted but not filled, several teaching assistant vacancies and periods where custodial and security positions were vacant). Employee benefits were projected about $110,000 over budget but unspent benefit cost associated with vacancies tempered that impact. The transportation fund was reported to be saving several hundred thousand dollars under a new contract, the presenter said.
Staff reminded the board of ongoing budget uncertainties — including the timing of property tax refunds and the possibility of a federal grant freeze — and invited board members to follow up with questions.
No board action was required for the informational financial reports.
