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Independent review: Los Banos Unified budget in generally good shape but reserves lag statewide averages
Summary
An independent review by School Services of California said Los Banos Unified’s budget practices are sound and use current assumptions, but cautioned that declining enrollment reduces the district’s 'net COLA' and leaves unrestricted reserves around 8–9%, well below statewide unified-district averages.
Matt Phillips of School Services of California told the Los Banos Unified School District board that an independent review of the district’s budget shows solid fiscal practices but a need for continued vigilance.
Phillips said the review focused on the assumptions underlying the adopted budget and the district’s multi-year projections. He said a budget is “built on assumptions,” and that the most useful review examines whether those assumptions — about enrollment, Local Control Funding Formula (LCFF) components and one‑time state dollars — remain current. "Any budget you look at is exactly wrong but what we want it to be is approximately right," Phillips said.
Why it matters: the district received large one‑time state infusions in recent years and Phillips emphasized the difference between the state’s statutory cost‑of‑living adjustment (COLA) and the district’s local, or “net,” revenue growth. He said the gross COLA in 2022–23 and 2023–24 (13.26% and 8.22%, respectively) did not translate dollar‑for‑dollar into local revenue growth because Los Banos experienced declining average daily attendance (ADA). "If you have less students year‑over‑year you’re not going to receive the full COLA," he said.
On staffing costs, Phillips noted that while total dollars spent on salaries and benefits have risen, those costs have fallen slightly as a percentage of unrestricted expenditures because of rising non‑personnel inflation and the use of restricted one‑time funds. He flagged employer pension pressures: for certificated staff the district currently pays about 19.1 cents per $1 of salary to CalSTRS, and for classified employees in CalPERS the employer rate was described as exceeding 27% in the 2024–25 projections.
Phillips commended the district for keeping its special‑education contribution relatively flat and said the board’s decision to contribute more than the minimum 3% of general fund expenditures toward routine restricted facilities maintenance was an intentional policy choice. He also noted that Los Banos’ unrestricted ending reserves were just over 8% (rising to just under 9% in the most recent closed year), while the statewide unified‑district average for the same period was about 22–23%.
Comparatives and compensation: Phillips presented comparative data showing Los Banos ranks near the top of neighboring districts on total compensation when health and welfare contributions are included. Using the available certificated compensation database, he calculated a 10‑year earning potential of roughly $78,000 per year for a teacher on the schedule, and discussed longer‑term earning comparisons across districts.
Board follow‑up: trustees asked for updated tables and Phillips said he would send updated comparative tables and data to the district next week.
The board took no immediate policy action at the presentation; the review concluded with a brief question period and staff requested the supplemental data for further consideration.
