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El Segundo Unified projects balanced outlook, cites HVAC transfer and hires behavior specialist
Summary
Chief Financial Officer Kim Lins presented the district's second interim report through Jan. 31, 2025, reporting maintained reserves, a deficit in 2024-25 tied to HVAC project transfers, a proposed COLA in the governor's budget, addition of a board-certified behavior analyst and plans to file a 'positive' certification with the county.
Chief Financial Officer Kim Lins told the El Segundo Unified School District Board of Education on March 11 that the district will file a 'positive' second interim certification after reviewing financials through Jan. 31, 2025. "We will be filing a positive certification with the county and see no reason why they wouldn't support us in that," Lins said.
Lins said the second interim reflects six months of operations and follows the district's first interim in December. The presentation showed the district's unrestricted general fund reserves remain at a healthy level while noting a larger deficit in 2024-25 caused by a one-time transfer to cover a districtwide HVAC project. Lins said the transfer created a notable deficit for that year but that restricted funds are declining as one-time grants are spent down.
Why it matters: the second interim certification is the district's formal statement that it can meet its financial obligations for the current and two subsequent fiscal years; the board must approve it before the county reviews the district's finances.
Lins highlighted several staffing and budget items that affect multi-year projections. The district has added a board-certified behavior analyst (BCBA) and six classified positions. Lins also noted recurring salary costs embedded in the budget from step-and-column increases as employees gain experience or additional credentials, which drive spending in out years. "As Dr. Johnson likes to say, 82% of our budget eats and sleeps," Lins said, underscoring that personnel costs are the largest line item.
Lins reviewed external factors affecting revenue projections. She said the governor's January proposed budget estimated a cost-of-living adjustment (COLA) of about 2.343% for 2025-26 and cautioned the amount could change in the May revision. She also reminded the board that roughly 70 to 77 percent of district revenue derives from the state via the Local Control Funding Formula and general fund.
On capital spending, Lins attributed the 2024-25 deficit largely to a transfer made to cover HVAC work: that one-time transfer increased the apparent deficit for the year. The district remains optimistic about slow revenue growth in later years and said it will present unaudited actuals after the books close in June.
Board members had no new questions at the March 11 meeting; Lins said the board had already exhausted substantive questions during a prior budget workshop. The district will return with unaudited actuals and next steps after the fiscal year close.
Ending: Lins said this will be the last interim presentation until September, when staff will present the closed-year numbers and unaudited actuals; in the meantime, the district will file the positive certification with the county and continue monitoring state budget developments.
