In a presentation of the district’s 2023-24 unaudited actuals, the district was able to add $20,430,865 to the year’s surplus, which now totals $26,281,548. The surplus, the largest in over a decade for SMMUSD pending audit, was added to the ending fund balance, now up to $56,609,464.
The ending fund balance will act as a reserve for expected deficit spending through the 2026-27 school year, and will also meet a state-required 3% reserve for economic uncertainties. The balance also accounts for a reserve for up to two months of general fund expenditures.
In the Board of Education presentation on Sep. 11, the SMMUSD fiscal services team explained that the district uses "conservatively estimated revenue and allocated expenditures" during the budget reporting process, which creates some differences between estimated actuals presented in June and the unaudited actuals.
Out of the $20,430,865 added between June and September, $12,642,677 is added revenues while the rest is made up through unspent monies. The top revenue stream was $7,724,355 into the Local Control Funding Formula (LCFF), noted as coming via Redevelopment Agency funds (RDA).
RDA, district Director of Fiscal Services Gerardo Cruz stated, is a component of property tax that is more volatile in projections, and was originally pegged at $15 million for 2023-24. In December, the district increased the RDA projection to $18 million, but the actual funds came in at $24 million. Some of the LCFF increase was also attributed to Delinquent Property Tax funds, property taxes that come in late to the LA County Assessor’s office, and thus come in late to the school district.
Revenues were added in a number of areas outside of LCFF, such as $354,341 from a state Home to School Transportation Reimbursement Grant coming from the Board of Education’s approved transportation plan in April 2023. A total of $945,748 came in from the Measure R parcel tax on property owners, specifically from the transfer of properties between senior owners exempt from the tax and younger individuals not exempt.
"The County Controller’s office is required to collect the parcel tax on that new owner … that’s why we’ve seen a significant increase in Measure R, because properties transferred hands to people who are no longer eligible to receive the exemption," Cruz explained to the board.
Unspent monies accounted for the rest of the revised budget, including $1,458,113 in unspent supplies, textbooks and technology, which was attributed to the new Proposition 28 (Arts and Music in Schools Funding) aiding in the supplies for arts, music and instructional materials. The district also saved $7,800,447 in unspent salaries and statutory benefits, which Cruz stressed was not "decreasing positions" or "removing positions."
"The Board [and district staff] do a great job of making sure we have budget all year long of all the positions we could ever want, and that’s board-approved by the FTE and the unexpected revenues that we adopt every year," Cruz said. "What ends up happening is that vacancies occur or positions don’t end up being filled, so we hold that budget all year long in the event that position ends up being filled. You see that number trickle down at each of [the] interims … when we have this number here, it’s simply saying that amount of money was budget for the board and staff to have on staffing, but it ended up not coming to fruition."
Other unspent operating costs in categories like legal, travel, consultants and utilities, totaled $4,241,766, something Board Vice President Jon Kean said is a "reflection of the district and the board operating in more effective manners" that can be replicated in future years. Up next for the 2023-24 numbers is an audit the week of Sept. 23, with a final audit report recommendation for board approval coming in December.
The board will return with a regularly-scheduled meeting on Thursday, set to approve two assistant principal appointments, one for Franklin Elementary School, and one that will split time between Edison Language Academy and McKinley Elementary School.
thomas@smdp.com