Lennox posts positive first interim report but projects shrinking unassigned reserves; board approves retirement incentive

Lennox School District officials presented the first interim financial report Tuesday and recommended the board certify the district's finances as "positive," even as multiyear projections show a shrinking unassigned fund balance and ongoing structural deficit risks.

Business officer Miss Elias told the board that, based on actuals as of Oct. 31, the district's enrollment is 3,703 with a funded Average Daily Attendance of 3,760. She said the district's adopted revenue for the year was $85.3 million but the first‑interim projection increased to $87.0 million after a one‑time state student support and professional development discretionary block grant — a $1.7 million uptick. Expenditures increased from an adopted $97.2 million to a projected $100.0 million, a $3.3 million rise driven primarily by services and operations and a $571,000 increase in capital expenditures.

Miss Elias summarized the multiyear projection: unrestricted beginning balances and unassigned fund calculations produced a projected unassigned balance of about $7.5 million for 2026/27 and roughly $763,000 for 2027/28 on current assumptions. "We are still in a structural deficit," she cautioned, noting the district is averaging an LCFF revenue loss of about $2.7 million per year tied to declining enrollment.

To reduce the risk of layoffs and buy planning time, personnel staff proposed an "early tell" retirement incentive. Personnel director Miss Castellanos described the offer as a one‑time payment equal to 8% of the employee's 2025–26 base salary, available on a first‑come, first‑served basis to up to 15 bargaining‑unit (LTA and CSEA) employees and up to three management employees. Irrevocable retirement notices would be due by Jan. 30, 2026, with retirement effective no later than June 30, 2026.

CSEA President Nancy Valle thanked the board for approving the incentive for classified employees and urged careful handling of personnel records: "While an additional 8% may not seem significant to some, for employees who have dedicated decades of service to the district ... it truly matters," she said, and formally requested HR provide a complete list of classified employees with seniority dates.

Board questions and context

Trustees pressed staff on how long current reserves would cover payroll: Miss Elias said roughly $12 million in unassigned funds translates to about five months of payroll, underscoring the need to adjust operating levels as enrollment declines. Trustees said they want to protect classroom services and avoid layoffs where possible, while ensuring transition and program continuity as the district adjusts.

District officials also described proactive planning steps related to consolidation work: procurement of a kitchen‑facilities feasibility study and early outreach to transportation, nutrition and facilities staff to identify impacts on receiving campuses if consolidation proceeds.

What this means

- Certification: Administration recommended and the board approved a positive first interim certification based on current assumptions. - Fiscal outlook: Projected ongoing annual LCFF revenue declines and a falling unassigned balance signal that additional decisions will be required to balance budgets in coming years. - Personnel response: The early‑retirement incentive is designed to reduce the likelihood of formal layoffs by aligning voluntary retirements with projected reductions in full‑time equivalent staffing needs.

The board asked administration to continue providing timely, school‑level enrollment updates and to return with detailed implementation and staffing impacts for any consolidation or staffing actions.