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Preliminary Clayton budget ties Prop O spending to multiyear bond plan; district to reallocate $5 million to capital fund
Summary
Finance staff presented a preliminary 2026–27 budget that incorporates voter-approved Prop O capital projects, plans to issue bonds in multiple tranches, and a planned reallocation of roughly $5 million of property-tax revenue from the operating fund to the capital fund to support near-term projects.
The School District of Clayton received a preliminary presentation of the 2026–27 budget that integrates capital spending plans tied to the recently approved Prop O referendum.
John Brazil, presenting the budget, said voters approved $135 million for Prop O projects and the district plans to issue bonds in multiple tranches. "We'll be issuing the first tranche of bonds, voters approved 135 million. We'll be issuing bonds to match both the cash flow and cost needs of the projects," he told the board. Brazil said the district expects to sell $45 million in bonds in the first tranche and that premium proceeds make that tranche effectively programmed at $47 million for cash-flow and reimbursement of earlier expenses.
To support budget-funded capital improvements this coming year, Brazil said the district would reallocate about $5 million of property-tax revenue from Fund 1 (operating) to Fund 4 (capital improvement) rather than make a direct fund-balance transfer. He stressed the move is intentional: "We're moving about $5 million of property tax revenue from Fund 1 to Fund 4 to enable some of those budget-funded capital improvement projects," he said, adding that fund balances in Fund 1 will decline by design while overall district liquidity remains strong.
Brazil presented revenue and expenditure snapshots: roughly $83 million in total expected revenue (mostly local), planned capital outlays that rise substantially when Prop O is included, and general-obligation debt that will decline as certain existing debt is paid off. He said the district expects to keep the debt levy unchanged and aims for a strong credit rating as bonds are issued.
Board members asked for clarification about the reallocation mechanism, low-point cash concerns (around November), the technology improvement plan, and the sequencing of capital projects. Brazil said a detailed cash-flow model underpins reserve targets and that many capital projects will be phased across fiscal years; he noted the district will return with more detailed cost and bid information in August and fall presentations.
The board did not take a final vote on budget adoption; the preliminary budget will return for further review and final action at the June meeting when the board will adopt the official budget.
