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District CFO warns of multi‑year deficit; presents scenarios and cash‑flow volatility
Summary
Assistant Superintendent and CBO Rafael Guzman told the board the district’s cash balances fluctuate monthly and outlined scenarios requiring repeated annual reductions (about $5 million per year) to reduce deficit spending; he reported March cash activity and identified roughly $4 million in contract reductions for next year.
Rafael Guzman, the district’s assistant superintendent of business services and chief business official, presented the monthly cash‑flow report and warned that while the district’s cash position is currently positive, month‑to‑month volatility and a projected multi‑year deficit require continued reductions and reserve management.
Guzman explained the cash‑flow statement (not a full budget) shows the district’s beginning and ending cash positions by month. He told the board March began at about $146 million and ended near $133 million, with an April projection around $128 million. He emphasized revenue timing — large inflows such as property taxes cause big monthly swings — and repeated his refrain that “cash is king” for operations.
Guzman described three scenarios from the second interim report: scenario A (no reductions), scenario B (the reductions adopted at second interim, roughly $5 million planned for next fiscal year and reported as ending closer to $6.7 million after adjustments), and scenario C (a recommendation to target $5 million in reductions each year for four to five years). He said contracts reductions alone identified about $4 million for the coming fiscal year and that additional reductions will be required in subsequent years to shrink deficit spending and protect reserves.
Board Vice President Brandon Myers asked for specifics on strategies and expected reductions; Guzman said identified measures include contract reductions and other operational savings but that any additional items will be evaluated and added to the reduction plan. He noted that maintaining a reserve while executing reductions will be necessary to avoid triggering state intervention.
The exchange underscored board concern about the district’s long‑term fiscal stability. Guzman’s presentation was instructional and advisory; the board received the report and discussed next steps at the audit/finance committee and future budget hearings.
