State monitor warns of multi‑year budget gaps as board accepts March unaudited financials after revote

The Rochester City School District Board of Education accepted the district’s unaudited financial reports for the period ending Feb. 28, 2025 after a procedural rescind-and-revote of the motion on March 27.

Derek Blair, acting chief financial officer, summarized the unaudited reports, reporting a “strong” cash position with an ending balance the presentation described as approximately $422 million and noting small changes in revenue estimates tied to prior‑year state adjustments and special‑aid grant rollovers. Blair also described capital project activity for February and provided snapshots from the Oracle finance system migration.

Minutes later the board’s vote to accept the unaudited March 2025 financial reports was disputed when one commissioner said their vote had been recorded incorrectly. The board rescinded the initial vote and conducted a new roll call. The second vote passed; the board did not take a separate action to use fund balance at that meeting.

Why it matters: The unaudited reports and the state monitor’s review together set the context for the district’s 2025–26 budget planning. The monitor cited a draft budget proposal and warned of growing projected shortfalls over the next five years, making structural adjustments and contract evaluations high priorities.

State monitor’s draft budget highlights Jaime Alasea, the state fiscal monitor, presented his initial review of the proposed 2025–26 budget to the board. The monitor said the draft general fund budget being reviewed by his office includes changes made between early March and a later draft and described a proposed FY2026 general fund figure in the district’s materials (the monitor walked the board through multiple drafts during his presentation).

Alasea said the monitor’s team had worked with the superintendent and finance staff, reviewed presentations and considered priorities aligned to the district’s strategic plan, bilingual corrective actions and the special‑education consent decree. He praised the district’s recent work on bilingual corrective action items and recommended continued attention to school‑level prioritization.

Projected multi‑year gaps In an explicitly stated finding, the state monitor said the district’s five‑year projection shows a structural budget gap emerging later in the decade: a projected gap of about $50 million in 2027, about $70 million in 2028, about $102 million in 2029 and about $132 million in 2030. The monitor advised against use of the fund balance to plug recurring gaps and recommended rightsizing, contract reviews and prioritizing school‑level investments.

Board and commissioner questions Commissioners asked about school-level allocation detail, capital “miscellaneous” project line items, and the status of the Oracle finance implementation. Blair said the budget booklet does not include per‑school budget breakdowns in the unaudited presentation and that more detail will be available in the formal budget documents and the upcoming budget process; he said Oracle testing had a 97% success rate on executed scenarios.

Next steps and monitoring The state monitor said he will review subsequent budget revisions and submit a written report to the commissioner of education, the superintendent and the board. The monitor recommended continuing to “right‑size” staffing and to evaluate contracts and vendor performance; he recommended that, if funds are restored through the state budget, the board prioritize school‑level restorations and supports for the most impacted schools.

Ending note: The board accepted the unaudited reports after the procedural re‑vote. The monitor’s multi‑year forecast framed the budget conversation as one requiring structural changes rather than one‑time fixes.