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Higley Unified presents FY26 maintenance-and-operations outlook as override funding phases down
Summary
District finance staff told the governing board the loss of override funding and projected enrollment declines will significantly reduce the FY26 maintenance and operations budget; administrators outlined steps for community engagement and potential reductions.
Higley Unified School District finance officials on Tuesday gave the board a second review of the proposed FY26 maintenance-and-operations (M&O) budget and warned that state funding changes, enrollment declines and the phase-down of a local override will substantially reduce next year's spending capacity.
Why it matters: The district projects lower state funding tied to student counts and expects the local override that supported operations to begin a multi-year phase-down if voters do not approve continuation. That combination will force program and staffing decisions affecting schools and services.
What the presentation said: Finance director Michael Moore summarized assumptions and risks in the FY26 projection. Key points included: - Projected unweighted ADM loss of 300 students for FY26; the district increased its ADM loss estimate after underestimating enrollment declines earlier in the year. - Initial projected M&O budget decline from current levels of roughly $9.2 million; after identified position and department reductions the net projected decrease moved to about $3.6 million in the board's current scenario. - The district will carry a statutory capital obligation for a middle school lease (principal and interest) of roughly $3.5 million annually over the coming decades. - The state's required 2% inflation adjustment to the base support level was included, but it did not offset projected losses from enrollment and override phase-down. - Utilities exposure: the district added an estimated $200,000 for potential SRP rate increases that could take effect midyear. - Insurance and reinsurance rates are expected to rise; the district awaited exact renewal numbers and will present them at a later review.
Moore also summarized the expected timing of reductions if no new override funding is secured: a phased reduction approach that could total about $5.1 million in FY27 and additional reductions into FY28 if the override funding is not replaced. Board materials show the override provided about $14 million in additional capacity at full funding.
Administration's next steps: Superintendent Richards said the district plans a community engagement process to inform any Phase 2 reductions. The administration will distribute surveys to staff, parents, students and community members and hold at least one public meeting; Richards said the district would return to the board with compiled feedback and formal recommendations at the March board meeting.
Other items in the review: Moore reported progress on several operational items connected to the budget, including half-completed camera upgrades at middle schools, traffic-calming speed bumps at several elementary sites, and a recently awarded 18-month mini-grant to fund a school safety officer at Sossaman campus. The district is also evaluating food-service delivery models and alternative fee structures to increase local revenue.
No budget vote tonight: The FY26 projection was informational. Board members asked clarifying questions about enrollment drivers and the assumptions used; the administration will bring a third review, with finalized insurance numbers and recommended actions, to the March meeting.
