County directs reductions; district weighs financing options and reserve plan

The district’s deputy superintendent reported that the County Office of Education’s review of the second interim budget includes a directive: when adopting the 2025–26 budget, the district must identify reductions (or new revenues) sufficient to meet the state-required 3% reserve in fiscal year 2026–27. Staff cited an approximate target of $2.1 million in reductions for 2026–27.

Why it matters: The county review and required reserve target directly affect multi-year budgeting decisions, potential staffing and program choices and the timeline for the district’s transition to basic aid.

Key points - County direction: The county office asked the district to adopt a budget with accompanying identified reductions to meet the 3% reserve requirement. Deputy Superintendent Salamanca said the county’s letter accompanied the second interim review.

- Projected shortfall: Staff told trustees the district is anticipating an approximate $2,000,000 budget shortfall in 2026–27 and that a $2.1 million reduction target was noted in county correspondence. Staff reiterated they are exploring multiple options: revenue generation, use of one-time funds, and potential program/staff reductions.

- Reimbursement resolution and financing options: As part of the discussion staff presented a reimbursement resolution (adopted earlier in the meeting) that preserves an option to reimburse eligible capital expenditures from proceeds of potential tax-exempt financing. Staff emphasized proceeds may only be used for capital outlay and deferred maintenance, not general operations.

- Timing and reserves: Trustees and staff discussed the district’s reserve planning as it transitions toward basic aid and noted any gains from becoming basic aid may take a year or two to materialize. Staff also noted several one-time state block grants and other funds that are part of reserve and spending discussions.

Next steps: The board will receive the proposed budget in June with recommended reductions or revenue options. Staff will continue to analyze options and return recommendations; the reimbursement resolution preserves a capital financing option but does not commit the district to issue debt.

Ending: Board members acknowledged the scale of the reductions requested and expressed confidence staff are developing a plan to meet the county’s directive; more detailed budget action will return for board consideration in June.