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CBO recommends moving $2 million to dedicated cash‑flow reserve to avoid payroll shortfalls
Summary
Chief Business Officer Stephen Choi recommended restructuring committed balances and moving $2 million into a cash‑flow fund (Fund 17.2) after presenting current cash needs, noting the district's existing cash would not cover a full month's payroll without the transfer.
San Marino Unified's Chief Business Officer Stephen Choi told the Board of Education that the district's cash-on-hand in Fund 17.2 would not cover a full month of payroll and recommended transferring $2 million into the cash-flow fund to improve liquidity.
Choi presented the fund balance breakdown and said the district’s Fund 17.2 cash balance is about $1.8 million while annual salary obligations total roughly $30 million, or about $2.5 million per month. “Our current cash flow balance wouldn't even make it for an entire month's worth of payroll,” he said, describing the rationale for the transfer.
Staff proposed using committed balances and reallocations to bolster reserves and fiscal stabilization: free up $2.6 million in future COP payments by initial COP issuance related to Measure M, move $1.5 million from that committed COP balance into future fiscal stabilization, and maintain a declining-enrollment reserve of $2.5 million. Choi emphasized that committed balances require board action to change.
Why it matters: the governor’s May Revise and projected state deferrals could produce timing mismatches that make local cash management critical. Choi said the transfer is a liquidity step, not a new ongoing expenditure, designed to avoid costly external borrowing or tax and revenue anticipation notes.
Board direction and next steps: no final vote to change committed balances occurred during the study session, but staff asked for board input on the proposal, and Choi said specific resolutions would be brought forward for formal action if the board wishes to adopt the transfers.
