At the committee meeting, finance staff and consultants reviewed District 65’s long‑term capital needs and how capital choices interact with operating reductions.

Staff reiterated the 2022 master site assessment estimate of roughly $188 million of deferred maintenance through 2040 (staff said roughly $160 million when counted through 2030 and after indexing for inflation). The district has 18 buildings and projected occupancy near 58 percent once Foster opens; staff said underutilization is a major structural issue because maintaining many underused buildings contributes to an operating shortfall.

On the operating side, Susan (district finance staff) said the district still faces an estimated need for $10 million–$15 million of additional reductions to meet long‑term sustainability targets. The board in spring adopted $13.2 million of deficit reduction actions; staff reported roughly break‑even results for FY25 close and said the district would finish FY25 with about 94 days cash on hand if current actions hold. Staff said their current forecasts assume a $2 million annual transfer from the operating fund to capital starting in FY28 (the packet included some model scenarios using $2M and higher annual transfers).

Staff outlined funding levers and tradeoffs: life‑safety bonds can be issued by the board without referendum but cover only eligible life‑safety work; a capital bond referendum would require voter approval and expand the pool of eligible projects. Staff advised caution about near‑term referendum timing and recommended growing internal discipline and transparency before seeking voter approval. The board will receive a master life‑safety facilities assessment (a new survey that will identify life‑safety vs. non‑life‑safety needs) in February; staff said that study will help prioritize near‑term projects.

Several trustees urged the board to establish a sustainable annual capital allotment (multiple trustees suggested $7M–$10M as a target cited during discussion) rather than continuing a historical ~$1M per year run‑rate; staff and trustees discussed ramping up internal capacity for in‑house repair work to stretch budgets.

Staff also noted an immediate cash flow item: a $6 million one‑time working‑cash use to cover Foster construction funding was recorded for FY27 and that will affect available reserves. When staff modeled increasing annual capital transfers from $2M to $5M, the required additional operating reductions to maintain 90 days cash on hand by FY30 would grow materially — tying facility choices to the operating reductions discussed in the SDRP process.

Why it matters: The district’s large deferred‑maintenance backlog and lower occupancy interact with operating deficits; trustees must balance investing in buildings with reducing operating costs, and the board will decide whether to use transfers, bonds or closures — or a mix — to restore financial sustainability.

What’s next: A master life‑safety assessment is due in February; staff will provide scenario modeling of capital transfer levels and show the operating reductions required under each option alongside the closure scenarios coming Sept. 29.