Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Budget Policy topic
No spam. Unsubscribe anytime.
SMMUSD staff urge formal reserve policy to codify two-month general-fund target
Summary
Assistant Superintendent Gerardo Cruz proposed a budget-policy change to formalize a reserve equal to two months of general-fund expenditures (about $35.7 million based on FY25 figures) in addition to the 3% contingency, arguing it supports cash flow, wildfire recovery and unification transitions.
District finance staff recommended the board adopt a budget-policy paragraph that would maintain a reserve equal to two months of general-fund expenditures plus the legally required 3% contingency.
"The board intends to maintain a reserve fund balance for economic uncertainties equal to 2 months of general fund expenditures in addition to the legally required 3% contingency reserve," Gerardo Cruz read and explained. Using FY25 numbers, he said two months of expenditures now equals about $35.7 million (based on $214 million of annual expenditures).
Cruz explained the rationale: reserves cover cash-flow timing differences in a basic-aid district, provide funds for unforeseen wildfire-related costs (staff cited about $1.5 million spent on recovery last year), and support a stable transition after unification. He said the administrative regulation will include the precise calculation method so stakeholders can reproduce it.
Board members voiced support for memorializing an existing practice: Trustee Ralphs called the presentation "unbelievably complete," and Trustee Smith said the measure reflects the board's stewardship goals. Staff said the reserve language will return on a future agenda for formal adoption.
