The La Cañada Unified School District is expecting to dip more into its reserves as administrators face a $3.9 million deficit for its 2024-25 budget, putting a bind on funding for unexpected expenses during the next fiscal year.
As district officials continue to monitor Gov. Gavin Newsom’s May revise state budget, Melissa Greenwood, superintendent of business and operations, presented the 2023-24 end figures and 2024-25 budget to the board on Tuesday for a second reading.
The 2023-24 estimated budget is considered a placeholder because it is primarily based on financial estimates and budget assumptions as of June 25. The same goes for the 2024-25 budget, considered a moving target due to the May revise, after which state revenue changes trickle down to local districts.
“In general, the 2024-25 June budget for [LCUSD] reflects challenges of routine increases in operational costs and continuing increases to the state retirement systems,” according to the agenda.
The estimated LCUSD budget for the 2023-24 school year saw an increase in revenue and a decrease in expenditures. District staff, meanwhile, compared numbers from its first read of estimates on June 4 to where they stand on June 25.
The next steps for the district include monitoring Newsom’s budget and gearing up to finalize 2023-24 budget numbers in August.
Despite the latest adjustments, the district will continue to earmark $625,000 for deferred maintenance, retirement benefits and a technology refresh across district schools.
Revenue has now edged up by $176,655 to $64.6 million, from $64.4 million, for the revised 2023-24 budget, which included increases in local funding from school affiliated groups.
Materials and supplies saw the biggest budget savings of $253,940 — from an initial $2.7 million to $2.4 million for the district’s expenditures — due to school sites not spending all funds allocated for the year, which will be rolled over to the next fiscal year.
Certificated and classified salaries saw an increase of more than $100,000, including benefits which had an increase of $29,763 since the first read.
For the district’s 2024-25 budget, it does not anticipate major changes, other than the deferred payments proposed by the state, as the legislature and Newsom are still working on finalizing the budget.
“Delaying payments to schools and community colleges allows the state to keep their funding points, but schools have to rely more on cash flow,” Greenwood said. “Given the small size of LCUSD, deferrals hurt us by limiting payments that can be made.”
Greenwood said that the district’s revenue will continue to increase in the next few fiscal cycles, with $63.7 million set for 2024-25.
For expenditures in 2024-25, which currently sits at an estimated $67.1 million, the district is working to reduce its materials and supplies costs, consultants and contracted services for the coming years
“We already have built in for 2024-25, reducing those line items by approximately $750,000,” Greenwood said on June 4. “Additionally, in 2025-26, [we’ll be] reducing it by another $400,000 and that stays on for 2026-27.”
For the projected fiscal cycles, the district will continue deficit spending until it starts trending downward to $430,864 in 2026-27.
The district said that it cannot continue deficit spending, so it is trying to make cuts in places that do not affect the classrooms as much as possible.
“Special education costs are definitely rising, but we need to provide those services for those students, so we are trying to do as much as we can,” said Greenwood, adding that the district is working to continue to decrease costs related to special education insurance, vendors and transportation services.
Meanwhile, enrollment is set to increase from 3,932 to 3,990 in 2024-25, and eventually increase to 4,040 in the multi-year outlook for the district.
“Our sweet spot is really about 4,000 to 4,100, so we’re trying to come up to that amount and trying to bring students in younger at TK and having them stay in our district,” said Greenwood at the June 4 meeting.
Average daily attendance remains “high” at 97.07% based on existing calculations, meanwhile cost of living adjustment, currently 1.07% for the 2024-25 school year, will see an increase in the multi-year outlook to 2.93% in 2025-26 and 3.08% in 2026-27.
“This depends on Gov. Newsom’s revenue projections as of right now, and those can possibly change,” said Greenwood.
The district, despite some hardships, is still able to meet its 3.5% reserve.
First published in the June 27 print issue of the Outlook Valley Sun.
