Carmel Unified board approves second interim budget report, affirms positive certification

Carmel Unified School District Board of Education on an evening meeting approved the district's second interim budget report and issued a positive certification, district Chief Business Official Yvonne Perez said.

The report covers actual revenues and expenses through Jan. 31 and projects through June 30, 2025. Perez told the board the district began the year with a fund balance she described as $24,300,000, projects revenues on the unrestricted general fund and records “revenue sources available” of $65,900,000, and expects a net decrease in fund balance of $1,800,000 to an ending general fund balance of $22,400,000. The board-required reserves were listed at $19,500,000, leaving an unassigned difference the staff identified as available for planned activities.

The nut of the discussion was how one-time timing, ongoing salary increases and transfers to other funds affect the district's reserves and flexibility. Perez stressed salaries and benefits remain the largest expense and said the presentation showed that the district is "in really, really good financial shape. We have a really good fund balance and we're doing really quite well." Board members pressed staff for clarifications about recurring transfers and the accounting mechanics for restricted funds.

Key details from the presentation and discussion included:

- Salary increases for 2024–25 are included in the report and drive part of the expenditure projections; the district highlighted that salaries and benefits consume roughly four-fifths of general fund spending.

- Transfers to support non–self-sustaining programs and capital needs are reflected in the report: a transfer to facilities of $2,700,000 was noted, and other routine transfers include payments to special education, deferred maintenance and child development programs.

- Perez described a reserve for cash of $2,400,000 to manage low-cash months; she also identified changes due to audit adjustments in other funds (a corrected beginning balance in Fund 25 and a separate adjustment in Fund 40).

- On child development (Fund 12), the presentation showed a $1,100,000 transfer driven by a district employee 50% fee discount for employees’ children, ELOP program uses and program costs that are not currently self-sustaining.

Board members asked why the district performs interfund transfers instead of budgeting larger line items up front. Perez and other board speakers explained that Carmel Unified is a basic-aid (community-funded) district that receives most revenue from local property taxes and that exact totals become clearer only as property-tax receipts are realized; budgeting therefore relies on projections that are adjusted at first and second interim and at estimated actuals. Superintendent Sharon Ovech and other board members also noted facilities needs and the possibility of pursuing a general obligation bond in the future to fund modernization and repairs.

After board discussion, a motion to approve the second interim budget report with a positive certification was made and carried unanimously. The record shows Board President Jason Romanzi, Board Clerk Jake Odello, Board Member Sarah Hines and Board Member Rita Patel voted yes.

The board received no public comment on the item. The superintendent and the chief business official said staff will continue budget development work through the estimated-actuals process and plan for the June budget draft.

The district's presentation and the board's approval set the accounting and reporting baseline for budget development ahead of the next formal budget adoption process.