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Santa Rosa board adopts conservative third-interim budget as state May revise tightens funding
Summary
The Santa Rosa City Schools Board on May 28 adopted a conservative third-interim financial report after staff and outside advisors warned that the state May revise reduces projected education funding and raises fiscal risk for the district.
The Santa Rosa City Schools Board of Education on May 28 adopted its third-interim financial report after district finance staff and outside advisors warned that the state May revise and slower-than-expected enrollment raise fiscal risk for the next several years.
Staff member Joel, who led the presentation, summarized the state picture: "they're looking at an estimated $14,000,000,000 deficit," and said the governor's May revise preserves some January proposals but depends in part on one‑time shifts and deferrals. Joel told the board the district is using conservative assumptions recommended by Sonoma County Office of Education and FCMAT (Financial Crisis and Management Assistance Team) for the district's multiyear projections.
The board was told why those conservative assumptions matter: several items included in the January budget documents (including discretionary block grants and other one‑time proposals) carry significant delivery or negotiation risk under the May revise. Joel and interim superintendent Lisa August said the district and its fiscal advisors recommended excluding some of those one‑time, higher‑risk items from the district's base forecasts. Joel also described updates to enrollment projections and the district's use of FCMAT's multiyear projection tool to model cash flow and reserve levels.
Board members pressed staff on the drivers of the year‑to‑date variance. Trustees raised questions about salary and benefit increases, utility spending, and growth in contracted special education services. Joel confirmed the district saw higher than anticipated expenses in nonpublic agency contracts and utilities and said those contract addendums factored into the revised projections. August and Joel said some restricted grant carryovers and timing differences also affect the appearance of the restricted versus unrestricted balances.
The district's projection shows restricted grants and federal/state categorical revenues covering a smaller share of total expenditures than in prior years, requiring continued transfers from unrestricted to restricted to meet mandated services such as special education. Board members and staff agreed the district must continue work begun with SCO and FCMAT to identify additional stabilizing actions and to refine enrollment and revenue assumptions ahead of the June budget adoption.
Trustees voted unanimously to adopt the third‑interim financial report. Student board member Omay Zuniga and all trustees recorded aye votes.
Board and staff next steps include reconvening the district's fiscal stabilization advisory process, continuing enrollment surveys and data work with SCO, and returning to the board with a proposed 2025‑26 budget for adoption after the state budget is finalized in June.
The board meeting included additional budget and staffing items later in the agenda, but trustees said they wanted the conservative third‑interim adoption to guide near‑term planning while the district continues cash‑flow and scenario work.
