Modesto board certifies positive financial position for 2024–25 amid low COLA and step/column pressure

Modesto City Schools’ chief business officer presented the district’s first interim financial report for 2024–25 on Dec. 16 and the board approved the report with a "positive" certification.

Finance staff described the revenue and expenditure context: the district continues to rely on prior‑year or three‑year‑average funded ADA calculations for state funding, is recognizing deferred revenue from prior‑year unspent funds (approximately $14 million planned to be spent this year), and is tracking increases in lottery funds, transportation reimbursements, expanded‑learning reimbursement and interest income. Staff cautioned that the state cost‑of‑living adjustment (COLA) outlook has fallen from earlier projections (from about 2.93% estimated mid‑year to current estimates nearer 2.4%), while local step‑and‑column salary costs alone were modeled at roughly 1.5%, placing pressure on the budget.

Mr Zury explained how the district uses multi‑year projections required by AB 1200 to show whether it can sustain commitments into subsequent years. Under the assumptions presented, the district maintained required reserves and a positive certification for the current multi‑year projection, though staff said economic uncertainties and the slow COLA environment will require close monitoring.

Board members asked for additional detail on attendance/funded ADA methodology, the timing of the governor’s January budget, and the projected impacts of salary commitments in future years. Mr Zury said the Governor’s budget proposal is expected in early January and staff will update assumptions at the February board workshop and during second‑interim reporting.

Action: The board approved the 2024–25 first‑interim financial report with a positive financial certification.