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SFUSD CFO warns of multi‑million dollar deficit in unaudited 2017‑18 actuals and multiyear projections
Summary
SFUSD presented unaudited fiscal year 2017‑18 results showing $571.5M in revenues and $591.0M in expenditures (a $19.5M deficit). The district projects continued deficit spending for 2018‑19 without additional revenue or expenditure reductions, driven by pension and health cost increases.
Rita Madewen, the district’s chief financial officer, told the Board on Oct. 23 that SFUSD’s unaudited actuals for fiscal 2017‑18 show revenues of about $571.5 million and expenditures of about $591.0 million, producing a roughly $19.5 million deficit.
Madewen said the district filed its unaudited actuals with the state and incorporated state budget actions — including the governor’s adjustments — into district projections. She explained LCFF (Local Control Funding Formula) is now fully funded at the state level, but supplemental and concentration grant amounts will continue to depend on a district’s unduplicated pupil percentage. For SFUSD, the district’s three‑year average unduplicated pupil percentage is about 62 percent, she said.
Looking ahead, Madewen presented a multiyear projection showing continued deficit spending for 2018‑19 (projected revenues about $598 million versus projected expenditures about $614 million) and warned that, absent new revenue or further reductions, the fund balance would decline toward or below the district’s 2 percent reserve requirement in subsequent years. She listed drivers of rising expenditures including CalSTRS and CalPERS contribution rate increases, growing health and pension costs, special education costs and negotiated salary increases.
When Commissioner Malague asked how much is being spent on lawsuits, Madewen replied that most litigation costs are related to special education and are budgeted within the SPED program, and that "there's very little hitting the unrestricted general fund" but she could not provide a precise number during the presentation.
Madewen urged the board that the district is exploring revenue enhancements and expenditure reductions and that updates would return to the board as decisions are developed.
