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Finance staff: district $2M better than prior estimate but still $9.2M short of 3% reserve; spending cuts and hiring controls proposed
Summary
Finance staff previewed the district’s unaudited 2024–25 actuals showing a roughly $2 million improvement over prior estimates but a remaining $9.2 million gap to reach a 3% reserve; staff proposed a package of spending deferrals/cuts and targeted hiring controls, with implementation steps expected in 4–6 weeks.
Finance staff told the committee that while unaudited 2024–25 results improved modestly versus prior estimated actuals, the district still faces a structural deficit and needs to consider concrete spending reductions and timing changes to restore reserves.
“We are ending the year a couple of million dollars, in a better position than when we had anticipated,” the finance presenter (S7) said, noting the ending fund balance improved from a roughly -$3,000,000 estimate to about -$1,000,000 (a $2,000,000 improvement). However, the presenter warned the district still needs “an additional $9,200,000 to make that 3% reserve.”
To address near‑term fiscal pressure, S7 proposed developing a spending‑control package that would establish concrete targets and, where appropriate, remove dollars from the budget (deferral or reduction) rather than rely on soft language to “try to spend less.” Examples discussed included deferring noncritical contracts, tightening preferred‑item purchasing to reduce on‑hand inventory, and considering whether bond funds were the appropriate funding source for certain expenses.
Staff said they expect an initial process in place within 4–6 weeks and first formal refinements at the first interim reporting period. The finance presenter emphasized the difference between a vague “freeze” and targeted cuts or deferrals, saying the goal is to identify specific savings that produce current‑year results.
The committee also discussed hiring controls. Cabinet already reviews positions and staff said the district had been using substitutes in positions that were contingent on student counts; at the time of the meeting the district expected to hire only a small number (approximately four or five) of elementary teachers and continue to evaluate other positions for deferral. The committee raised concerns about counselor ratios (S6 reported most schools at the contractual 400:1 ratio for counseling; Santa Rosa High School showed a 0.37 FTE overage while Santa Rosa Middle School showed a 0.2 FTE shortfall) and custodial coverage challenges related to expanded learning days.
Restricted funds were a recurring topic. S7 told the committee roughly $15,000,000 in restricted dollars exist with legal strings attached; staff said they will look for opportunities to spend restricted funds in the year they are generated for the students who generated them and to reduce unnecessary carryover where appropriate. Committee members discussed that some restricted grants (for example Prop 28) are harder to spend because of staff‑spending requirements and carryover rules, and the committee asked for site‑level Prop 28 and Title I spending analyses to better understand carryover and site decisions.
No formal fiscal action was taken at this meeting; staff will return with a spending‑control plan, staff recommendations on hiring deferrals, and site‑level analyses.
