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District finance official says Apple Valley Unified will file positive first‑interim certification despite enrollment decline
Summary
At a December board meeting, the district presented a First Interim report projecting it will meet obligations through June 30, 2027, while noting declining enrollment, the end of one‑time federal funds and the district meets the state 3% reserve but not its 5% board policy.
At a meeting of the Apple Valley Unified School District Board of Trustees, district finance staff presented the First Interim financial report and said the district will file a positive certification for the fiscal years ending June 30, 2027.
"We will be filing a positive certification so we are currently projecting that we will meet our financial obligations through June 30, 2027," Matthew Schulenberg said as he walked trustees through the multi‑year projections and underlying assumptions.
The presentation, which certified the district's financial position as of Oct. 31, highlighted a mix of pressures and one‑time supports: declining enrollment, the expiration of federal ESSER funds, higher health‑care claims within the high desert trust that could affect next year's premiums, and a lower estimate for next year's cost‑of‑living adjustment (COLA) used in the district's multi‑year projection. Schulenberg noted that some restricted, one‑time funds are being expensed this year and that the district is identifying approximately $14 million in line‑item reductions on the unrestricted side.
Why it matters: a "positive" First Interim certification means staff projects it can meet state reporting obligations and obligations through the projection period under current assumptions. But the presenter and trustees repeatedly emphasized the difference between the state's 3% minimum reserve and the board's 5% policy target.
Trustees pressed for clarity on reserve adequacy. When asked how long a 3% reserve would sustain operations if state cash flows paused, Schulenberg said it would cover roughly "about a week and a half of operating costs," underscoring that a 3% reserve provides limited cash‑flow protection and that the district is not at the board's 5% target.
The report also included demographic and revenue assumptions: the district is using a 2% COLA in its current multi‑year projection (down from the 2.93% assumed at budget adoption), expects modest LCFF increases, and has engaged a demographer to refine enrollment and ADA projections used for future staffing and budgeting decisions.
Next steps: Schulenberg said the district will present a Second Interim update in March and will monitor the state budget process, including the governor's May revision, to determine how enacted state decisions affect the assumptions used in the forecast.
