Revised budget shows $47M projected general-fund deficit; auditors and new CFO to examine options
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Summary
Business office and the new CFO presented a revised FY25–26 budget showing a projected general‑fund deficit near $47 million that would reduce the ending fund balance from roughly $73 million to about $25 million; EisnerAmper has completed phase 1 of an internal audit and will continue reviewing fund transfers and cash projections while staff work on interim FY27 modeling and stronger procurement controls.
District executives reported a substantial change between the interim and revised budget outlook. The business office explained that weaker-than-expected ad-valorem collections (a primary local revenue source) and increased transfers to capital projects account for much of the deterioration: staff said general-fund revenues declined by about $4.3 million versus interim estimates while transfers to capital rose by an additional roughly $13.6 million.
As a result, the revised-budget projection shows a general-fund deficit in the current year near $47,000,000, which would reduce an earlier projected ending balance of about $73,000,000 to roughly $25,000,000. "That is a significant hit," the CFO said during the presentation, and staff outlined next steps including more conservative interim-FY27 modeling, tightened procurement and additional internal controls.
Tom Frio of EisnerAmper (S21) reported phase 1 of the firm’s procedures is complete (validation of general ledger and cash balances at 12/31/25) and that auditors are now reviewing journal entries, fund transfers and cash-flow projections; further reports from EisnerAmper will recommend controls and other next steps. The board discussed the adequacy of a 17% best-practice fund-balance guideline (roughly two months' expenditures) and noted that a $25 million balance at June 30 would not provide a full six-month runway.
Board members asked for more detailed cash-flow modeling and asked administration to return with an interim budget and a clear timeline for when additional policy or spending recommendations will be presented. Staff said they are working on revised procurement controls immediately and plan to present interim FY27 options in April and May so the full Board can consider potential remedies.
