Board approves FY2025 budget revision to shift $11 million into unrestricted capital

The Gilbert Unified District governing board approved Fiscal Year 2025 Budget Revision No. 2 on March 25, authorizing the transfer of $11,000,000 from the district's maintenance and operations (M&O) budget capacity into unrestricted capital (district additional assistance) to increase the district's capacity to earn interest and fund facilities work.

Finance director (presenter) Kristi Betts explained that state law prevents the district from directly spending interest earnings recorded in M&O, but allows designation of new revenue to unrestricted capital, where interest can be spent for capital projects. Betts said the move preserves spending flexibility and could increase unrestricted capital's interest earnings; the district earned roughly $825,000 in interest in unrestricted capital year-to-date and she estimated the larger pool could yield approximately $1.5 million in interest before the next budget cycle.

Under the revision, M&O control-limit capacity decreases from roughly $293.2 million to about $282.2 million; unrestricted capital outlay increases from a previously shown $18.9 million (with a $56.2 million budget limit including carryover) to approximately $29.8 million in planned capital expenditures and a $67.2 million unrestricted capital limit. Betts told the board the revision is primarily an accounting and designation change to maximize interest earnings without reducing operational capacity; she said available balances showed sufficient capacity and that the district expects to spend roughly $30 million in capital expenditures this year.

Board members asked clarifying questions about the plan to reclassify funds back to M&O in the next budget year, how much of the capital bucket is carryover versus newly designated revenue, and whether the district has the capacity to spend the higher unrestricted capital amount before June 30. Betts said the district will present encumbrance and expenditure details in the monthly financial report and reminded the board to sign associated documentation at meeting end to file revisions with the Arizona Department of Education.

The board approved the motion by voice vote; the motion passed with all four members present voting "aye" and one absent. Finance staff said they will return with monthly reports tracking encumbrances, expenditures and any need to transfer funds back to M&O for operational expenses during the next budget cycle.