Budget advisory committee recommends 25–35% reserves as board weighs competing priorities

District business staff and the Budget Advisory Committee presented an informational first reading on a proposed fiscal-reserve policy, recommending a target range of 25–35% of the general fund. The committee cited a projected close-to-$5,000,000 deficit this year, the district’s parcel tax (about 21% of the budget), and the timing of property-tax receipts as key reasons for a larger reserve.

A committee representative said the reserve range aligns with the committee’s analysis of comparable basic-aid and community-funded districts and was intended to provide a cushion in the event the parcel tax does not pass in future elections. ‘‘The range that everybody pretty much agreed to was 25 to 35%…because that would give us a cushion to be always within that parcel tax,’’ the presenter said.

Public commenter Erin Fraser urged the board to prioritize spending on current students and noted California’s recommended reserve cap for LCFF districts is 10%, calling the proposed range ‘‘2 to 3 times the state recommendation and cap.’’ District staff and trustees responded that as a basic-aid district with lumpy property-tax receipts the district faces different cash-flow risks than LCFF districts; staff also described a county short-term float (zero-percent loan) that helps manage cash until property taxes arrive.

Trustees asked clarifying questions about current reserve levels (the prior fiscal-year end was described as about 39%) and the impact of an estimated $5 million deficit; several trustees expressed concern about declining reserves but also empathy for planning for parcel-tax risk. The board treated the presentation as informational and scheduled the reserve-policy item to return on consent in December.

Next steps: The reserve policy returns for board consideration; staff will provide detailed policy language and supporting budget materials ahead of the December meeting.