District finance staff detail FY25 amendment and propose raising fund balance target to 10–15%

District finance staff presented a short budget amendment and a recommendation to raise the district’s long‑term fund balance target. Staff said updated audit results and local tax growth change prior estimates but that state aid reductions and program shifts reduced net revenue compared with the adopted budget.

Finance director explained that earlier short‑term borrowing was repaid in December, lowering financing costs: “on December 11, we paid the loan back,” staff said, noting the early repayment reduced interest expense. The amendment shows revenues down roughly $3.4 million relative to the adopted budget after state reductions, federal grant changes and retirement timing; expenditures are also reduced so the district still projects a positive net addition to fund balance for FY25, though smaller than originally budgeted.

To reduce exposure to swings in state funding and other shocks, staff proposed changing Policy 32‑10 to raise the fund balance target from 6% toward a 10–15% target over several years (about 45–60 days of operating reserve at 15%). The recommendation included a stepped approach so the target increases incrementally and gives administration direction to prioritize reserves while preparing budget amendments.

Trustees asked for additional historical context and statewide comparisons; staff noted the statewide average reserve level is higher and that the recommended policy provides a guardrail against future unexpected reductions in state aid or other revenue.

Provenance: Finance monitoring presentation, budget amendment briefing, trustees’ Q&A on bond/timing and fund balance policy.