District staff brief board on restricted funding, board asks to show $50 million special‑education transfer

Saddleback Valley Unified School District board members heard a detailed staff presentation on restricted (categorical) funding and asked for clearer public graphics showing how those funds and transfers affect the general fund.

Robert, a district staff member who led the briefing, told the board the district divides revenue into unrestricted general fund dollars and restricted funds earmarked for specific programs such as special education, child development (TLC), cafeteria operations and developer fees. He also explained that California funding is attendance driven and that LCFF supplemental dollars for unduplicated students must be used to support those students.

The presentation laid out high‑level totals the board asked to see more clearly: about $223 million in unrestricted general‑fund expenditures, $23.7 million in LCFF supplemental amounts and roughly $159 million in restricted general‑fund expenditures. Robert said fund 12 (child development/TLC) is largely self‑sustaining (about $14.5 million) and fund 13 (food services) likewise covers its own costs (about $11.5 million). He also described fund 25 (developer fees, roughly $14.1 million), fund 40 (capital projects, roughly $10.8 million) and fund 67 (self‑insurance, roughly $54 million) and how portions of staff salaries are allocated across funds.

A staff member who prepared the materials asked the board to note that the way the state codes accounting can hide a revenue transfer to special education. “We still need to add another $50,000,000 to that for the special ed piece,” the staff member said, explaining the amount is recorded as a revenue transfer to special education rather than an unrestricted expense, so it does not appear in the pie chart in the same slice.

Board members pressed for three clarifications before the materials are posted publicly: label federal versus state categorical funding on the slides, add small‑print notes that funding levels and program eligibility vary year to year, and include a pie or stacked chart that explicitly shows the $50 million transfer and the portion of salary and benefits charged to restricted versus unrestricted funds. One board member said the requests aim to make the materials more transparent to the public; Robert agreed to revise the charts and provide a breakout showing state versus federal contributions for special education.

Members also discussed staffing counts and indirect costs: Robert reported the restricted general fund supports roughly 112 million in restricted salaries and about $47.5 million in general restricted expenditures, and he explained that the district charges state‑approved indirect fees to some programs to recover a share of district office support. Trustees asked that contracted services paid to outside providers that functionally are personnel costs be included in total personnel summaries.

The board was reminded that several categorical grants and block grants are one‑time or expiring over the next few years; staff said the board will need to decide whether to continue positions funded by expiring one‑time grants when those dollars end. Staff also confirmed reserves are about 5% (roughly $25–$26 million) and suggested putting a clear “as‑of” date on any published snapshot of the numbers.

The board did not take any policy votes during the study session. Staff said they would return with a revised presentation that explicitly labels federal versus state funding, adds the $50 million transfer to the graphic, and provides a special‑education breakout of state and federal shares. The meeting adjourned with no closed session scheduled.