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Financial oversight committee urges 20% minimum reserve, offers continued oversight
Summary
The district's Financial Oversight Committee recommended a minimum general fund reserve of 20% and asked the board to use FOC expertise for implementation; the committee also recommended continuing subcommittees on debt, unfunded liabilities and communications.
The Financial Oversight Committee (FOC) presented its annual report to the Santa Monica-Malibu Unified School District board and urged the district to adopt a minimum reserve policy that maintains 20% of total general fund expenditures.
"The FOC recommends that the board adopt a minimum reserve policy, which maintains, a minimum reserve level of, 20% of the total general fund expenditures," the general budget subcommittee chair said during the presentation. The subcommittee framed the recommendation as achievable within roughly two years and offered to support staff during implementation.
The report summarized a year of subcommittee work: continued analysis of unfunded liabilities (OPEB), debt-financing reviews that included the district's issuance of certificates of participation and bond activity, and efforts to improve financial communications and Measure R outreach. The bond oversight subcommittee recommended continuing oversight of debt issuance and suggested staff consider issuing an RFP/RFQ to select financing teams.
FOC members told the board that the 20% target sits below some peer and state guidelines but would give the district more predictability compared with the projected 19.4% reserve shown in the most recent interim budget. Committee chairs said they expect to support the board and staff as the district develops an implementation plan and timelines.
