District finance director reports first‑interim shows near‑term solvency, multiyear deficits
Summary
Adelanto Elementary School District’s finance director told trustees the district will submit a positive first‑interim certification for 2025‑26 despite a near‑term unrestricted deficit of about $211,000 and projected multiyear shortfalls driven largely by spending down restricted program reserves.
Adelanto Elementary School District’s director of fiscal services presented the district’s first‑interim financial report on Nov. 4, telling the board the district will submit a “positive” certification for the current year and the next two years while forecasting multiyear budget gaps.
Mr. Clements, the district’s fiscal director, said 2024–25 closed with 7,668 students enrolled and an ADA (average daily attendance) of 6,939. The budget the board adopted for 2025–26 had assumed 7,706 students with an ADA of 7,042; after revisions the district now projects enrollment of 7,452 and ADA of about 7,000. Those enrollment and ADA figures feed state LCFF revenue calculations, Mr. Clements said.
The district’s projected combined revenues for 2025–26 total $144,900,000, with $96,800,000 from Local Control Funding Formula sources, about $33,200,000 in other state funds, $7,000,000 federal funds and $7,900,000 local revenues. Projected expenditures total $162,300,000, of which roughly $120,500,000 is for salaries and benefits, leaving an estimated unrestricted first‑interim deficit of about $211,000. After required set‑asides and an audit assignment, the projected unassigned fund balance at first interim is about $51,000.
Mr. Clements said restricted funds are being intentionally drawn down to meet program needs; restricted ending balances are projected at about $21,500,000 compared with the adopted budget projection of $26,300,000. A longer range multiyear picture shows larger deficits (a $17,400,000 deficit cited for 2026–27 in the presentation), driven largely by using restricted reserves for program purposes before expiration.
In Q&A trustees pressed for causes and remedies. Trustee Kraus noted a projected drop of roughly 254 students from the adopted budget to the revised projection and asked what might be driving the decrease. Mr. Clements said staff are investigating the drivers and “looking for possible solutions,” and that recent bargaining agreements and management agreements are included in the first‑interim calculations.
On restricted program balances, Mr. Clements said the district maintains notable reserves in categorical programs — he estimated ELOP restricted reserves “right about $12,000,000” — and that a large portion of the projected multiyear deficits reflect intentional spending down of those restricted program balances.
Trustees also asked whether reserves were currently being used for operations; Mr. Clements said the district is using unrestricted reserves “by about $2/11000” (presentation phrasing) and that the practice of drawing reserves has been ongoing for multiple years. Asked about corrective actions, Mr. Clements said the district is “considering all options” but that no definitive decisions had been made.
The presentation summarized the three certification outcomes used by the state: positive, qualified and negative. Mr. Clements said the district will submit a “positive” certification, indicating the district expects to meet its financial obligations for the next three years under current assumptions. He closed by inviting further board questions.
The board did not take a separate vote on certification during the public presentation; the report was followed by discussion and later agenda business.
