Bassett Unified reports $40 million ending fund balance, warns of multi‑year deficits tied to declining enrollment

Chief Business Officer Isabel Ybarra presented the Bassett Unified School District's 2024-25 unaudited actuals on Sept. 9, reporting a $40 million ending fund balance and forecasting multi-year deficit spending tied to declining enrollment. The presentation laid out reserves, restricted funds and three-year deficit projections and prompted questions about enrollment tracking and retention efforts.

Ybarra, the district's chief business officer, said $17 million of the $40 million is restricted and described the remaining components of the balance, including a small revolving cash fund and board‑committed reserves. "Ending fund balance, the $40,000,000 that we're showing in there, to me, it is important to educate [the board] that out of those $40,000,000, $17,000,000 are restricted," she said. She told the board the district maintains a required 3 percent reserve for economic uncertainties, a board policy target of 7 percent, and a litigation set‑aside of $2.5 million.

Ybarra reported $59 million in revenues and $65 million in expenditures for 2024-25 and said the district is heavily dependent on the Local Control Funding Formula (LCFF), with more than 73 percent of revenue derived from that state funding stream. She warned that the approved 2025-26 budget projects $2.4 million in deficit spending, with smaller deficits of $2.0 million and $1.7 million projected for 2026-27 and 2027-28 respectively, adding to roughly $6 million of cumulative deficit over three years unless actions are taken.

Superintendent Dr. Alejandro Alvarez acknowledged the fiscal pressures and said the district will pursue steps to monitor attendance and align expenditures with revenue. "That is the reason why the school districts are required to file first interim, second interim, estimated actuals," Ybarra said, describing the budget as a fluid document the district will adjust as new data arrives.

Board members praised the clarity of the report and raised questions about enrollment decline and student movement. Board members requested further analysis on where students who leave the district are going and asked staff to track cohort movement between grades. Ybarra said IT staff can run CALPADS queries for public school enrollments and that the district maintains records of inter‑district transfer requests; she said information on private school moves is limited.

The presentation highlighted six‑year enrollment decline and reduced attendance coming out of the COVID era, when the state used a hold‑harmless funding approach. Ybarra explained that the state now funds districts using a three‑year average attendance calculation and that Bassett's ADA (average daily attendance) and enrollment trends will increasingly reflect current population declines as that averaging period rolls forward.

The board did not take formal action on the presentation. Ybarra closed with a list of next steps that emphasized short‑term monitoring of attendance, long‑term efforts to improve enrollment and continued fiscal prudence through reserve management.

The presentation and ensuing questions lasted roughly 40 minutes during the meeting's staff presentations and recognition segment and generated several requests from board members for follow‑up enrollment and retention analyses.