001Good evening. Today is May 27, 2025. Welcome to the San Marino Unified School District Board of Education special meeting. Here's our board president, C. Joseph Chang. Hello everyone. Uh right now is uh 4:08 p.m. Uh I'm call to order for the special uh board of education meeting. Uh all meeting of the board of education are open to the member of the public unless publicly notice as a confidential cross-section as allowed by law. Member of the public may address the ball as outlined in the public comment section of the agenda. The audience of all meeting is recorded and a member of the public may be held liable for any slanderance or the otherwise deformmentary statement in consideration of the ball and a member of the audience. Please turn off silence your cell phone while in the
002ballroom. The Sanino Unified School District encourage those with a disability to participate fully in the public meeting process. If you need a disability related modification or accommodation including auxiliary aid or service to participate in the public meeting, contact the assistant to the superintendent at the JD Lusd 626 299 7,000 extension 1310 at the 48 hour before the schedule board meeting so that we may make every reasonable effort to accommodate you. Document provided to a majority of the board of education regarding a open section item on this agenda will be made available for public inspection in the district office located at the 1665 West Drive San Manino during normal business hour. In addition, such writing and a document may be viewed on the history website at the www smusd. us. Uh right now that's a pool
003of agenda. I have to approve. Any second? local. Uh, Mrs. Ryan I, Mrs. Gear here, Mr. Chen. Uh, motion carried. Uh, third, public comment. A com communication from the audience concerning matter on the special board of education meeting agenda may be heard at this time but not responded by the board of education. The board of education has adopted policy 9323B to ensure the public's right to be heard in any matter pertaining to the Sanino Unified School District. Person who wish to provide a public comment will have a three option to submit a public comment. First submit through a online form. Submit through a online form. The public may submit a public comment for the open or closed section on the May 27, 2025 from 11:00 a.m. through the 2:00 p.m. Comment received during this time
004will not be read during the meeting but will be provided to the board of education. Please submit your comment. Do we have any submission via the online form? No submissions today. Okay. Next. Request to speak during the meeting via the zoom. During the public comment, the meeting will pause for one minutes to take request to speak. The right hand function is used to take a request during the public comment period. For online attendee, press the raise hand icon to add yourself to the queue. For phone attendee, D star 9. The speaking order will be deand determined based on the order of a request received. Individual speaker will be unmute and call to the speak. Uh Mr. Hong Kong, please uh pause the meeting for one minutes to collect the public comment. Well, we don't have
005any attendees online. We can skip this. Okay. The request to speak during the meeting in person via the public comment car. Please com complete the public comment car and submit the completed car to the designated dropbox with the assistant to the superintendent. Opportunity for public comment are offered prior to cross-section and at the the start of the regular open section for matter not on the agenda and for matter on the agenda. The board of education reserve the right to add a public comment period prior to any individual item on the agenda. Five minutes may be allotted to each speaker and a maxima of 20 minutes to each subject matter. However, in the event they are more than four speaker on the same subject matter, the board president retain the description to adjust and limit the
006time allocate to each speaker to ensure that all wishing to speak will be heard within the 20 minutes allowment. Do we have any public comment car at this time? Not at this time. Okay. Thank you. Okay. Next. Let's go to the post study section. I would like now like to turn it over to Dr. Steven Choy who will be lead the poll through the budget study section. Thank you Mr. Chang. Good afternoon uh members of the board executive team uh for joining us today to participate in this budget study session. Um I'd like to start by actually uh introducing uh and welcoming our director of accounting for joining us for this study session. So uh director of accounting Vanji Lingat is joining us. Um also joining us today is our accounting analyst uh Miss Susanna
007Barber. Uh so I'd like to just welcome them for joining us uh in this study session. um they'll be um facilitating in the sense that if we had any uh particular questions about the budget or even accounting or fiscal matters um they would be happy to chime in and provide information as needed. Uh but for today's agenda, we have a few items. Um I I feel that it's important for the board to participate in a board study session because especially uh on the topic of budget because as you may know as a board member uh one of your responsibilities is to provide oversight of the u fiscal um health of the district. Um so I I will start today's presentation with just a quick review of the board role of the board in terms of
008the budget. Um then I I'll go into budget 101. I also think it's important not just for the board but for the general SMUSD community to be aware of some of the um fundamentals of budgeting and school finance. Uh then I will jump into highlights uh from the most current May revise. Uh as you may know the governor released his May revise uh miday and I'd like to just provide some highlights of what's the latest and greatest from the governor's proposal. Uh then we will uh take a deeper dive into study and discussion on a few budget matters uh that are relevant for our district. Uh specifically we'll be talking about some um anticipated expenditures. We'll talk about um our uh ending fund balance and some recommendations for your consideration. Um no actions will be
009taken today. However, we would welcome your input and feedback. Uh and then finally, I'll conclude with um sort of a a glimpse of what's next. um something you may have heard uh which is called clear gov transparency. Um it's uh it's one of my desires to help um translate and uh present um tools that make it easier not just for staff and for the board but for the public to understand our budget. I think it's critical that we utilize the the latest and greatest tools out there to help uh communicate our budget. So um let's go ahead and get started. So uh as you know as a as a board member uh we value your time very much and we know that you have a lot of responsibilities and uh one of the prime areas
010of uh your responsibility is to provide uh oversightes um and also to approve um budgets and uh approve transfers. So, as you can see from the CSBA um document of the five major responsibilities of a board member, I've highlighted the two areas where there are specific responsibilities mentioned about uh finances. So, in sections two and four, you'll see that in order to establish the effective and efficient structure um you'll be establishing budget priorities and we do this very well. We actually have a very good system in place. Uh as you may recall, every year we engage in a strategic planning session and throughout the year we'll have opportunities for the board to review and uh adjust our priorities as needed. Uh secondly, the board is also responsible for adopting the budget. Uh so every um
011every June uh we will present the proposed budget to the board uh as the first reading in the first June meeting and then in the second meeting in June, we'll ask the board to approve and adopt the budget. The second area of responsibility for the board member is to monitor and adjust district finances and that is really um related to um the times when um I or the accounting team will be presenting the interim reports and we'll be presenting um interim reports. will uh recommend uh that it's a positive certification and as a board member it is your responsibility to monitor and adjust as needed and to approve those uh interim reports. So the board is doing a great job. Everything's on time uh on task. Uh so I want to commend you and thank
012you for for your continued support and and uh supporting the district's uh budgeting and fiscal areas of responsibility. So, let's go into budget 101. Um, in this section, I'll talk about um some of the uh fundamentals of education uh financing. And in particular, I will uh emphasize and stress what are some key differences between SMUSD and perhaps some other districts. Uh because California is a vast state, you'll have districts in various different financial situations, right? And I think it's important for us to emphasize um what are some financial factors that make SMUSD unique and I will dig into that. So to start off I'd like to start off with just timeline of budgets the budget cycle in general. Uh as you know um the state uh has their u budget timeline and for schools like
013SMUSD it's very much in sync with how the state operates. So if we start on the left side, the governor generally proposes his or her budget uh in January and between January and May um the governor will get lots of feedback, lots of input, uh a lot of subcommittees and committees at work, right? Then the governor will propose a may revise that is the second version of the governor's uh proposal and a lot of that will also depend on the economic conditions of the state and that is exactly where we are today right the governor just released their May reby. So between May and June 15th, um the governor will continue to get a lot of input and feedback from uh from various committees as well as legislators uh until um the legislation comes up
014with a balanced budget to propose for the governor's signature, which typically happens around June 15th. And then if everything goes well um we the state of California should have an adopted budget starting July 1. Now on the education side on the right side you'll see that districts especially public school districts uh will have an adopted budget starting July 1 as well. Uh and then there's two interim reporting periods. Some districts actually do three interim uh reports. Um for those districts that may have um special situations where they need a third interim, especially for districts that perhaps didn't meet a positive certification such as a negative or an unqualified, they would be required to do a third interim. But fortunately for us at San Marino, um our requirement is to provide two interim snapshots. And what
015interim reports are uh the first interim is a snapshot of how we are doing in terms of finances between the time we adopted the budget all the way through October 31st. So over a three-month period, we'll provide the board a snapshot of how we're doing, how our revenues coming in, how our expenditures going out. Um we provide a second snapshot uh through the end of January. That's the second opportunity. And we will also provide the board um sort of a pulse uh read on how did how are we doing at the end of January compared to October 31st. Uh and these are really great snapshots because it provides us um distinct periods of time for us to make adjustments in time before we close out at the end of the year. And we generally close
016right on June 30th. That's when the the um the uh expenditures and revenues should be set. And between June 30th and the end of September is when we do the close out period. That's when um the accounting staff is working extremely hard to to make sure that everything is coded correctly and then make sure that when we present the unodudited actuals to the board that it is the best um assessment of of where we're at financially. So that's the timeline and the budget cycle u for the school district in relation to the state. And as you know, I already mentioned about budget certifications. Um, negative is when the district believes that it cannot meet its financial obligations for the next two years. Qualified is when it may not. And fortunately for us uh at San
017Marino, we've had the u benefit of having positive certifications uh for as long as I can remember. We've been able to meet the current and subsequent two fiscal years. Now, just a little bit of history uh in terms of how we got here. uh as a public school district, as you may know, school public schools in the state of California back in the 1800s were primarily locally funded. Uh basically, if the local community uh has this much amount of money, it would essentially go uh a certain percentage of it will go towards the schools and that went on for over a hundred years. Um however a landmark case in 1971 uh parent Serrano sued the state of California uh and the public school uh superintendent of public schools at the time his name was priest
018uh was the defendant in the case and lost uh and it was determined uh that um through this case that the state must provide uh education uh that was equitable and they developed funding formulas starting in 1971. one uh that brought equity to the schools uh to provide an equitable good quality education to all students in the state of California. However, things continue to change. In 1978, Prop 13 passed uh and the purpose of Proposition 13 was to put a cap on property taxes. And while that was beneficial for many property owners in the state of California, it uh unfortunately reduced uh funding to schools, public schools significantly. Um and for the next 10 years, it wasn't until uh 1988 when Proposition 98 came around, um that established a state minimum funding guarantee that provided
019a guarantee of approximately 40% of the state's budget to go towards education. Um and as you can see, you know, education funding is always in flux. It's always uh um it's always a work in progress, if you will. In 2013, the local control funding formula came into play and again the focus was more on equity. That was um the LCFF uh where it established and modified the formula u to categorize for example students that were uh considered unduplicated account or high need students. I'll talk a little bit more about that later, but it is a formula that basically will give schools additional funding if they are serving students, more students, uh, based on high need. And I'll define what high need is later on. But as you can see, our current state budget, there it
020is for K12 education, $81 billion, is approximately 40% of the budget. Uh, and California has um, uh, stayed solid on that. uh relative to the rest of the nation, California actually does fund its schools pretty well. Now, a big um a big uh area of clarification that I'd like to share is that I get this question a lot every time I introduce myself as the CBO for SMUSD. It must be great being a basic aid school district, right? The reality is we are not basic aid and it's very important to understand the difference. Uh, San Marino Unified School District is an LCFF or a state aid school public school district. And what that means is that San Marino Unifi does not get enough funding from its local parcel taxes to fully fund its education system.
021Um, and as you can see, um, on this graphic here, um, if you think of education funding as a bucket, um, San Marino Unified receives about $20 million, um, uh, of, um, property tax revenue, but our budget is 36 million alone just for LCFF. We actually receive an additional $16 million from the state of California as state aid just so that we can meet that guaranteed minimum level. Compared to other districts that may have very high property tax values, those districts that have more revenue coming in from their property taxes, as you can see on the bucket on the right, it's overfilling. It's just like property tax money that's coming in that's just more than what they need. The schools actually get to keep that. And uh Samaran Unified is unfortunately not a basic aid
022school district. Um you'll see in a in a future slide uh what that translates to. Uh but before I do that on the LCFF formula this is how we actually calculate how much revenue we get from the state uh based on this formula. It's it's actually a mathematical formula and what we do is uh if we look at the formula hi look at the formula you'll see that depending on the grade level of the student will determine how much money or how much funding will receive from the state. So there's something called a base grant. So every student that's in a particular grade level span, so K through 3, 4 through 6, 7, 8, or 9 through 12, they'll receive uh a set base grant dollar amount. Now, in addition to that, um if the
023student we are serving is considered a high need student that is defined as one that is lowincome, an English learner, or a foster youth student, they'll qualify for either either supplemental and or concentration money. Um and what supplemental means is that the school district will actually receive an additional 20% of the base grant. So that's an additional funding um for those supplemental students. Samar Unifi does receive supplemental funding for um I believe it's approximately 19% of our students. Uh I think last checked from the second interim was about 580 somewhat students. However, San Marino Unifi does not qualify for any concentration money. And concentration money is significant. Um, you'll see that uh for students that for districts that have an additional for more than 55% of their students that are uh high need students will
024receive an additional 65% uh of their base grant funding. That is significant. Unfortunately, San Marino Unified does not qualify uh for any concentration grant money. Uh this is one of my favorite charts along with Dr. Delator's one of her favorite charts. Uh when Dr. Delator says that we are one of the lowest funded school districts yet at the same time with the highest performing uh she is she is talking about this particular chart. You'll see here that Samar Unified is one of the lowest funded school districts here in relation to the districts presented on here at about a little over $13,000 that we get from the state uh from the LCFF. Um, compare that to um a basic a district. You'll see that at the very top, Carmemell Unified gets over $33,000 uh uh per
025student per ADA. So, uh that is a significant difference. Going back to San Marina Unified, uh in terms of revenues, LCFF still represents about 62% of our revenues. Still a significant amount of funding for our school district. And of course along with that uh we received money for our proc from our prohal taxes a significant amount of funding from the schools foundation as well as our PTAs and local organizations um that support the school district. Now every interim report will present this particular table and you'll see um this is the most recent one from our second interim report. It'll show what we projected in the first interim and it'll show you a snapshot update on the second interim and then the difference. These are tools that help us monitor our uh finances and um as
026a schoolboard member um thank you for uh reviewing this information. Uh you know this is this is exactly the type of tool that a board member would look at in terms of assessing our budget and how are we doing throughout the year. Uh so this is just a snapshot of that and again it shows uh on the far right column what the differences are. So for example, you look at between first and second interim, we had an increased enrollment of six additional students. Uh and that translated to additional ADA uh which is attendance uh of 6.54. Um you may be wondering how is that possible? How can you get additional funding? But remember ADA is based on attendance, right? Uh it's not necessarily the students. You could actually have fewer students and even higher uh
027ADA for that matter. Um and then of course changes in LCFF funding um changes in other areas of funding. Um so this is just one example that you'll see uh continuously through the interim reports. You will also take a look at expenditures. Um and the expenditures are 73% of our expenditures goes towards salaries and benefits. Um and similarly uh in the interim reports you'll see a table very similar to this which will show you uh the key differences between first and second interim and one common question that we often get is um you know how much is San Marino unified spending on special education you know I think um many districts it is a major expense and it's it's no different in San Marino 20% of our expenditures are spent uh on special educated related
028expenditures. Uh but if you were to compare San Marino Unified with uh other districts um throughout the state of California, San Marine Unifi actually does a really good job managing special education expenses. So this is a tool that we use to monitor and compare ourselves with other districts in terms of how we spend. I know many of you are squinting and kind of trying to see is that valina valley is on the left. Yes, they spent 71% of their um now I I don't know if this is general fund dollars but this is I think overall dollars uh that they spent. Um so it's very important that we track and monitor uh there's a there's actually I in my Fmat class that I took last month the whole focus was on special ed education and
029how we code and how we uh manage special education expenses. We typically want to manage it so that we're not constantly increasing additional costs because there is a a maintenance of effort um provision which requires school districts to actually spend more each and every year. And so it's it's very strategic, a lot of work on accounting's part to ensure that we code um special education expenditures appropriately or you end up at 70%. Correct. South talking about they're they're at 25% uh of their budget is spent on special education services and he was reaching out to me to see if that was typical or not typical and I said it's pretty typical because we're just below you at 20% but um it is it's it's a real um quandry as to how to continue to manage
030that with the maintenance of effort as Dr. to pointed out that requires you to spend um more in the upcoming year than you spent in the current year on special education services. And the reason that that is in place is to make sure that we are not depriving students of services that they they need. Um and the assumption is that those services are going to continue to um be more expensive each year. So we should be um continuing to spend more. However, um when There is room for decreasing the amount of money that you are spending on special education. There's nothing in the law that really allows for that other than the exception uh if you have a decrease in your ADA and if you have a decrease in your um I mean your enrollment
031uh then you can so I have a question. I have a question about that. Um so you said our um unduplicated cap our supplemental grant is about 20% um that we receive. So are that is that 20% which is that just happens to align with this 21% are are those students counted in special education? No, that's unrelated. It's just a coincidence that around 19 or 20%. Okay. But most of them might be but it's neither here nor there. Yeah. Yeah. Special educ education costs are a challenge. Um it's one of those uh it's federal law that we provide special education although it is not fully um it's not fully funded. Right. So uh as you'll see in many of our interim reports there's a breakout of how much the district actually has to contribute towards
032special education. Right. So okay. Yeah. Um the next thing I would like to talk about uh are inner districts. Uh so inner districts um you know uh I think there's a common misconception that inner districts are not putting in their fair share. Uh I I often hear that um and you know one of the the things that I think is important to to understand and look at the value of what inner districts bring in terms of from the fiscal perspective is that it is significant for our district. And here's here's a actually one of my pre my predecessor uh came up with this analogy and I think it does hit the point through uh is that in our district um this was from 2324 data we have approximately 910 inner districts uh it's approximately 30%
033of our uh of our students that are inner districts and it generates about $12 million. Um and you know many of the inner district students are actually children of our own employees, children of of city employees. Um, and one way of looking at what inner districts bring in terms of value from a fiscal perspective is that if you look at our budget of approximately $50 million and you look at what's fixed costs, the district has to spend approximately 20% of its budget on special education and another 20% on operations. This means utilities, electricity, the water, right? Um and the rest of the budget, the rest of the uh budget of 60% are what's called non-fixed costs. Now, if we look at inner districts and what they bring in terms of $12 million, um that essentially
034pays for 40% of our non-fixed expenses. Meaning this particular slide, the underlined part says 30% of our in district students contributes to approximately 40% of our revenues which pay for non-fixed expenditures. Right? So that in essence does translate into the fact that inner districts pay their fair share. And I want that to be very clear that and this is the key reason why every single district around us wants inner district students, right? It's it's it's um they bring tremendous value. Um and I'm just look I'm just saying that from a fiscal perspective uh without in the district students we would be in a world of hurt. So um so they they do bring in their fair share. And then finally um just yes is that is that because in district the reason it seems like
035the the revenue of the in district is higher than the the expense the the the total number with in district that means according to the ACF formula does does he mean the in district usually has more higher need? No, not necessarily. Um, now, um, I I don't have the specific data of how many inner districts are considered high need. However, um, we don't we don't categorize, you know, inner districts specific to now, they do count. If, for example, if an inner district student were to enroll in our schools and they qualified as an English learner or as a low income, then yes, it would it would count and it would bring additional revenue, potentially supplemental money. You think that's the reason why the revenue in you know district like for like if everything is same
036right you know you know districtrict 30% of you know district should bring the 30% of revenue right but obviously it's a 40% I mean we bring more revenue so I'm just wondering is it because they they need they're like more yes to them in there or I think um well it's not total budget right what he's saying is that the inner districts um which is 30% of the population of students is paying 40% of our nonfixed costs and our non-fixed cost. Okay. Okay. So that's percentage of revenue. Okay. Okay. Totally that's the that's why I got confused. Okay. I got it. It's just a way of looking. It's just one way one way of looking at it. Do do you have some data that how many percentage revenue they bring in? You know I don't
037think we've categorized that out especially Yeah. Yeah. But I tell you that um we're looking at the 12 million which yeah it brings in about approximately 12 million data which was 8 million. So now they're bringing in $12 million out of the $50 million budget. So if you took the $12 million and divided it by about $150,000 which is the average teacher salary and including statuto welfare benefits. Is that about right? Um then you can you can see how many teachers that funds, right? Um and so without that $12 million, we would have to reduce our teaching staff significantly, which means and we would, you know, back out that enrollment. And this is all hypothetical because legally cannot just say uh we're no longer going to accept inner districts because even if we said no,
038the county office of education could or rule um our to inner districts and there are reasons within the statute that allows them to attend our schools if we have space. So, we would literally like have to close a school and consolidate um our schools in order to be able to uh accomplish that. And our school district would look a lot different. We would be looking at more of um a core curriculum type education um if we lost, you know, 910 students um and $12 million. You can imagine all the programs that we would have to cut. So, another way look at inner district uh student enrollment is that they are allowing us as a school district to provide more breath and depth to the educational offerings that we provide for our resident students. We wouldn't
039be able to necessarily field a football team. We wouldn't necessarily be able to have a baseball team and a soccer team and a volleyball team and a waterfall team. And I've talked before about the fact that little tiny Sanino High School has 22 sports uh compared to Glendale High School, which literally has half of that and they're three times our size. So our school district provides a very rich experience for all of our students. Um so not every student has the same interests and we're really able to provide a lot for um students with varying interests um here in San Marino. So I think that this model is allowing us to provide a richer uh greater experience for resident students than they would otherwise be able to provide. So when you have an inner district,
040can we target it or it has to be always open like a let's say we decide to accept the inner district. Does it mean that we need to accept any industry that applying to us and do the like royally or can we say that okay now we're going to open to the south south Pasadena then we prioritize Arcadia then no it doesn't work that way just we have to wide open right well I mean we don't have to take all of them we they apply right they have to get released from their school district they need to apply there's different types of permits um there's the legacy permit there's the parent employment related transfer um is um you know if you're a business owner in the city of San Marino um those are high priority
041you can apply right but depending on the grade level of your student we may or may not have room um in that grade level for your child and so we do have waiting lists for certain grade levels that are already full and we will not fill a grade level uh to capacity because we always keep uh two to three maybe even four spaces available in each section so that if resident students move in um it's not an issue and we do that uh consciously um at the beginning of the year. So we make sure that we're not overcrowding our schools with respect to that. And um if you're on a regular inner district permit and if you're not on a herin transfer, you're not a business owner, then you would have to uh reapply if
042you don't have what they call underlying like residency. um you have to reapply unless you're in 11th grade going into 12th grade. There's certain rules that apply to different circumstances. Um but think of it this way. This school district, the two elementary schools, one middle school and one high school, functions best when we have 3,200 students. There was a time in our community where we had um the majority of that number of students that were resident students and so it was impossible for us to take more than like 10% of our population um as interdist permits there wasn't room for them right so we're at about 3100 now is that correct uh 3100 under 3100 but yeah yeah so we're still like 100 kids short of being at our ideal capacity districtwide. Um and and
043so if we have more resident school age children enrolling in our schools, then we wouldn't need to fill those empty seats with inner districts. So everything is cyclical. Right now we have the lowest birth rate since the Great Depression. Um that's a fact. And we also have a very expensive community in which to move in for young families. Um, Laana has apartments, condos, town homes, right? They have more housing options for young families. So does South Pasadena. We don't. We only have single family homes. Um, so it is harder for young families to move into our community than it is to move into South Pass or Lakinada. That's one factor. We also know that we have a lot of vacant homes that are not being leased or rented. Yeah. Or sold and they're just sitting
044there. Um and those could be offered up to young families moving in. Um we we just don't have a um enough young school age children living in San Marino to be able to uh you know meet that 3,200 student threshold. I hope that makes sense. Yeah, it does. Now, now I have the other questions. So, like we have a 3,200 student capacity and right now you said we have a 3,100 only. Yes, that's include the kids coming from the fire then that mean that we never that's in my opinion the kids coming from the fires that's dimminimous because it didn't even make us go over our uh staffing ratios that we already have in place which are very low class sizes of the elementary. Um, what I can say is that we have while we
045have more kids at our two elementary schools, we don't have as many kids as we used to have at San Marino High School or the middle school. Okay. So, so high school and middle school, we have more room. Yes. Elementary school, we went over the capacity. That that's the reason why. So, you may be saying, "Oh my gosh, you we're overcrowded." But only at the elementary schools. And think about this. That is because we're educating six additional classes um that we never had to educate before and that's transitional kindergarten. Three sections at Valentine and three sections at Carver. And you know 10 years ago we didn't have those sections. So that's six additional classes of kids that we are educating that that is you know m mandatory now that wasn't before. So that also contributed
046to the um uh the capacity at the elementary schools increasing tremendously and I think it will continue to increase because uh this year which is the final year of the phasing in of transitional kindergarten students you have to be four years of age on or before September 1st. So we start August 13th. So if you think about it, we could have three year olds on our campus between August 13th and September 1 who are going to turn four on September 1 theoretically. And I haven't even looked at that to see how many we have or if we have any. But the kids over the past three years have been getting younger and younger as we accept them into TK because of basing approach that the state designed for universal transitional kindergarten and this is the
047final year of that. So this should be it in terms of age. Um but we have seen we have definitely seen a growth at the elementary um because of transitional kindergarten. The uh executive order this year was 70 kids across the board. Not I mean the majority of them were elementary um but there were some middle and high school kids in mix as well. Okay. Yeah. That makes sense better. Yeah. Good questions. And and I think this enrollment ADA slide was meant to be here because it's a perfect transition, right? In terms of what we're talking about, which is it is cyclical. You can see that back in 2010, our enrollment was at 3,200, right? But you can see that there was a gradual decline and however there is an upward trend and you can
048see that trend sort of buckled in 2022 when we started seeing an an increase in enrollment. Um, as we get more data, we'll we'll see that trend. Hopefully, it continues. There is no guarantee. However, um I will pres be presenting some additional data in terms of statewide how we're doing in terms of enrollment. Um so let's talk about the May revise and what are some of the latest and greatest from our governor. Before we go to May reise uh is is that we meet a goal for the uh school foundation donation is that still 1.9 or no? So for 2425 um it is still projected at 1.9 million for 2425. You said the project mean that will be cash on hand or that's something that I think we will need to check with our school's
049foundation to to verify. Uh but it is part of the budget for the 2425. Now for 2526 um that that is uh estimated to be lower for 2526. So right now you make uh the new budget. So you will Yes. Yes. We have made a note of that. But what what happened once we know the 24 to 25 school foundation will not meet the goal. What happens? Well, how you we we would have to we would have to pull from the general fund or look at other additional revenue sources. Yeah. This one of the question uh I I like to ask you know the when each year when you make a budget and then you will not meet a goal. So I know you have to use the general fund but is that in the
050future and can also share with the B member like for example um where if a special education use more of the de more or the school foundation have a less. Yeah. So we we would like to know this uh absolutely absolutely we will be sharing that as soon as it becomes available. Now we typically uh include that in these interim reports and make adjustments uh but we definitely will put an asteric we'll highlight that um in addition to what's in the weekly board memos. We will also provide that information as well. that the school foundation has requested that they come before the board this evening during the superintendent's comments to give you um the amount of money that they're going to be uh issuing for this school year. Great. Great. Thank you. Yeah. I'm wondering
051um President Chang, if you go to the slide where it says 2425 revenues and assumptions. I'm wondering if what you're asking is really about whether we're making like a positive or a negative assumption on those things because it's listed there as school foundation, special education, and then if we want to add legal fees, we could add that. These are these are categories for us to kind of look at and examine. So the assumptions are really important for us to understand because um you know we make certain assumptions that perhaps by next year with the final year of the um the kids coming younger that enrollment will will be in the increase a little bit. Right? But then um what happens? You're ask actually asking what happens if that doesn't happen that there isn't a positive
052assumption on enrollment ADA. So I think those are really good questions. I just wanted to clarify so that I understand what he's asking too. Okay. And I think that um one of the uh one of the issues that we need to be aware of is it is important to have a reserve. It is always important for us to have a reserve just like the state has a rainy day. Um because if things don't go our way or things, you know, happen that we could not have anticipated um that drive our costs to go in a different direction, we need to have uh a fallback just like we have to have in place, I believe, for measure E and measure R in case one of them does not pass u with their sixyear term. It's going
053to be important for us to be able to um support those salaries for one year until we can either get it passed or recognize that that's no longer a priority in which case we let those positions off. Absolutely. I feel like you've all seen my slides or something like that because that's exactly what I'm going to talk about in terms of what the state's doing with the rainy day fund. Um but let's let's let's go over some of the highlights from the latest May revise. Um so going back to the state budget process, we are uh right after the May proposal, May revised proposal uh on May 14th. Uh we are in that period of time uh where um we are looking at what the governor's proposing and how we're developing our budget. We're we're
054using uh that information to build our budget for next year. Um but the governor uh has always provided uh economic updates uh because the economy directly impacts how education is funded in California. And as you can see um looking at the United States uh GDP um there is a dip um as you can see um you know there's a lot of uncertainty as you may have heard there's been tariffs uh at the uh at the federal level and that has a direct impact uh for the economy uh across the nation and you can see that um since uh 2025 there's been a drop of 0.3 and you can see The also the orange line there is what's showing the um consumer confidence. It's also uh dipping as well. And when whenever you have two consecutive
055drops in the GDP that is uh defined as a recession. So um there's a lot of concern about the overall economy not just in California but across the United States. Uh and if you look at California specifically, one of the areas of concern um is that there is higher unemployment in the state of California in relations to uh the rest of the nation. Uh another important uh point to look at uh in terms of the economy is the inflation factor. Um the federal government has been trying very hard to keep inflation at 2%. However, it's being very stubborn despite the changes in the interest rate, uh what's called the federal fund rate. um the inflation factor is still above 2%. Um and then if you look at Wall Street um Wall Street um um looking
056back at start since the start of January um it took a major dip in early April and still hasn't fully recovered from that. So that is an area of concern um not just for uh California but for the rest of the nation and perhaps even globally. Um looking back at California, um California is primarily revenues are funded by three major areas, the big three taxes. Um you'll see that uh personal income tax uh is the largest of the three taxes. Uh then there's corporation tax and then sales and use tax. Um in all three of those taxes, it is projected in 2526 to um decline. Um you'll see that if you look across the top of each of those columns, it kind of increased, right? And then up until the May revision for this current
057year, you see that it's projected to actually decline um in 2526. Uh generally when the governor proposes a budget, um the governor is generally more optimistic and then so is the uh legislative analyst office theo uh but if you look into 2526 they're not as optimistic. Um they're they're there seem to suggest that there is a downturn in the economy. Now, there's a silver lining to this um because I I will use the word downturn to describe the economy, but I'll also use the term um um I don't want to misstate it. Um for education, for TK through 12, uh TK through 12 will be insulated. Um and I'll I'll I'll dig into that a little bit more. Um but if you look at what Proposition 98 does, Proposition 98 as we as I shared
058earlier was designed to provide a minimum funding guarantee for schools. And for Nexshar's budget, um there is a uh proposed drop in the minimum guarantee. There is a proposed use of one-time funds to fund uh specific core programs in TK through 14. Um and it will also propose dipping into the rainy day fund. in fact depleting it entirely. So there's a remaining $540 million in the rainy day fund which will be depleted. Uh the good news is TK through 12 will be insulated. There are no proposed local cuts to TK through 12. Uh but it it's not the same for community colleges unfortunately. Um to dig that into further uh details, uh if we take a look at what Proposition 98 has provided for school districts and for TK uh through 14 education, you'll see
059that funding has been fairly stable. That minimum guarantee does uh kind of stay flat, if not just go up and down a little bit, but ADA student attendance has fluctuated dramatically, especially after COVID uh in 2122. It dropped significantly and has never fully recovered. uh we the state simply has just lost a lot of students and there's it's just not projected to to reach up to that point uh in the near future. Um in fact if we look at Prop 98 u one thing that's really important to consider is that it provides a minimum guarantee funding level but one of that compon one of the components within that Prop 98 is the Education Protection Act. Um that is a law that was passed from Proposition 30 in 2012 under Governor Jerry Brown. Um at that
060time it was right after the recession uh the great recession and schools were uh were hurting. They simply did not have funding sufficient funding. So um the state of California passed Proposition 30 and it helped boost revenue to meet that Prop 98 funding guarantee. However, that Proposition 30 is going to expire in 2030. Um, and there's a lot of concern about whether or not that um will be extended. It's going to it's going to require going out to the ballots to uh for the state to approve that renewal. So, that is a major area of concern for uh for the state um in terms of meeting that Proposition 98 guarantee. Another important um data point that's uh that's important to look at is the fact that um Proposition 98 um although it guarantees a minimum
061funding level, it doesn't necessarily guarantee that it will be paid out to the schools. Right? So you can see in the center uh columns here um that Prop 98 obligates the state to pay a certain amount but the state doesn't necessarily pay that out. uh we are already seeing that this year for example in the month of June uh public school districts um will have a deferral they'll actually not get uh an allocation from the state to pay for that month because it's going to be deferred until the the schools get paid at a later time and taking that further we're going to see that in future years that is projected uh deferrals are projected to happen in future years um the governor is proposing thing something called a settle. Um it's the governor's way
062of describing how um the governor will ultimately appropriate sufficient money to meet that minimum guarantee and um he's calling it a settle up. Um and we just simply don't know when it will happen. Um but the reality is that Prop 98 guarantees this amount, but it doesn't necessarily mean that we'll get it on a very timely basis. There might be deferrals. Um but they they're going to pay you eventually. I mean is is the law like do they have like time frame you have to wait pay defer not eventually but what the governor is also suggesting in regards to the settle up is that instead of just appropriating what they estimate the revenues to come in to be uh the governor is proposing the settle up be based on actual numbers. So the governor is
063sort of saying we need to buy more time to ensure that we get actual revenue numbers in before we commit to uh giving this dollar amount to the schools. So um a lot of people are arguing whether or not this is constitutional. Um this is something of uh is of debate. Uh it was first presented uh at the governor's budget back in January. Uh and we're still seeing it in the May revised. It it hasn't changed. Um so that's that's a reflection of our economy. Um uh at this time there's really a a downturn in the economy. We're calling the maneuver, right? Um the maneuver is very similar to the maneuver. The maneuver sort of bought some time as well, but the governor is suggesting that you know there's going to be a settle up.
064We we will we will uh appropriate the appropriate amount to the schools, but we just want to base it on actual dollar amounts and that's generally not how it's done. But when they for time, there's interest earnings, right, that they're capitalizing on. And then we end up in a situation where we have to have cash flow, right? Um, so we used to have a it was fund 17.2. Yeah. That was our cash flow fund when we were hit with deferrals in the past. So we could borrow from ourselves rather than having to go out for a tra, which is expensive. Um, it's just very costly for the district to do that. So we just need to prepare for the likelihood that we will be borrowing from ourselves again in the future. So we want to
065have the capacity to be able to do that within our budget. Absolutely. Absolutely. And this particular side again again it's to uh point out the fact that in January the governor proposed a budget of about $118 billion uh billion dollars to go towards um the education side but you'll see that there is a downturn uh now in May all of a sudden it's dropped so um it is projected that there will be a decline in revenues for the state of California so they have to have that rainy day deferral type fund as reserves even though it will exceed the legally allowed percentage in our budget. Is that correct? Correct. It used to be a 10%, right? But that that um we're not going to do it if the 10% is lifted. It's no longer um
066in place at this time. Yeah. Yeah. And we'll actually talk about that in our budget study session as well. we'll we'll uh have some recommendations on terms of how we can uh provide a buffer for ourselves in terms of having that cash flow. Yeah. Um and then this particular slide is just to illustrate the fact that the governor is proposing depleting the remaining $540 million of that rainy day fund. As you may recall, there were years where there was a surplus and it did, you know, increase the rainy day fund, but projected future out years, uh it's it will be depleted. And I I don't generally like sharing cartoons, but this one particularly um u drives home the point is that many districts are in an unfortunate position uh where they have spent um reserves
067to pay onetime monies to pay for ongoing costs and that is breaking the cardinal rule. Uh it's rule number one for CBOS and CBO school is that you never spend um you know onetime money on things that live and breathe and eat. So um so in summary in terms of what Prop 98 will pay for uh in future for next year for example is that the governor is proposing that settle up um so reducing the amount but saying that we will ultimately pay um and in terms of deferrals um it it looks almost as if it were it's inev inevitable that there will be deferrals coming in uh there's no cuts uh per se to take TK12 but there might be deferrals meaning that you uh the schools will not get paid uh on its
068regular allocation um uh pay period. It will just be delayed possibly delayed. Have you seen anything allocated um for schools who took in by our impacted students? Not yet. I have not heard anything. Although that's Do you have a three-year average ADA? Is that how we figure out our ADA? Um the ADA is uh calculated from previous year. However, there was a home hold harmless um uh provision in place dur because of COVID. Uh but fortunately for us um our enrollment has increased so we didn't have to rely on that ramp up or referring to a previous year's ADA because I mean like we've said we had um expenditures that we was real money we had to spend in order to accommodate some of these students. However, if you look at them like from a
069percentage of our overall, it's not that much of an increase. Plus, it's only half a year at this point. So, it's really half of an ADA. Yeah. So, we haven't heard anything. Yeah. Because if people get paid back for that. Yeah. We haven't heard anything official from the state. However, one thing that we're we're trying to do is we're working with FEMA uh to um present um costs, additional costs in uh in regards to the wildfire. And one thing that we're cost factoring out is the additional costs uh of um the furniture, the instructional materials um and all that. We have we're working on that. And also, as a result of the meeting that we had uh recently with the senator, um her assistant got back to me again. I did forward an email to
070the board. letting you know uh as an update that the senator did raise our concerns publicly during the education um budget section of their meeting and so she was advocating for San Marino lock south pass um as districts who you know took in the fire victims pursuant to the governor's executive order and advocating for funding and um as you know she feels that that's going to come to fruition Uh but there is nothing official yet from the vendor office. So we'll wait and see. Yeah. Yeah. And of course the the the third thing that uh we want to emphasize from the May revised is the fact that although there are no cuts to TK through 12, there are proposed reductions on the community college side. So a funny visual that was shared with me from
071thickmat was that at the next CBO party uh when we see the uh finance people come from the community colleges the TK through 12 people will be exiting the room on the other exit. Uh so you know it's uh we're fortunate in that regard that TK through 12 is not seeing any significant cuts but um unfortunately it's not the same for community colleges. So one big tangible uh piece that we always um leave from the May revise especially from school services of California is this dart board. Uh it provides the key data points and assumptions that we use to build the budget for the for the upcoming year. Um and the cola will be at 2.3% for 2526. Um you'll also see that that cola is applied to um the base grants as well as
072the adjustment factors. Um, and you'll see that um, there is still an additional transitional kindergarten add-on. Uh, that $5,545 amount uh, did decrease uh, from the governor's original proposal back in January. So, we do have some concerns. Uh, schools do have some concerns about um, you know, what does that mean? Does that mean it's going to stay at that or is it going to decline even further? Uh and um I'll highlight later uh actually school services of California is asking school district not to budget that as um as a revenue um for next year um until we get uh very specific um numbers in the in the budget um in the approved budget. So um furthermore on the dart board you'll see that um the California lotteryies there the the mandated block grant for districts.
073This is a a source of revenue for schools to help uh implement a lot of the uh mandated uh things from the state of California. Uh you'll see that the colas applied there as well. One thing that is interesting on the dart board is the fact that the cowpers contribution rate did decrease. Uh that was unexpected. Uh we had been always been informed that it either stays flat or continues to increase. Uh but uh that has uh been an interesting point for us that it did drop from 27 to 26%. And of course, the reserve minimum state reserve still applies. Same where uh San Marine Unifi's in the 3% minimum reserve. Um going back to transitional kindergarten, this remains a high priority for the state of California. The governor does want full implementation of universal
074TK. Um and uh as Dr. Delator had mentioned that we will be seeing students uh as young as three um potentially uh under the age of four as long as they turn four by September 1st on our campuses next year. Um the mandate that uh the adult uh student to adult ratio uh will apply. Um so it'll change from 12:1 to 10 to1 for every TK student uh 10 TK students you need at least one adult um and the point that it was reduced so in January that TK add-on was $6,44. Um there there is a a slight drop uh in that TK add-on. Um another program uh that was highlighted was the ELO program. This is the program that provides funding for before school, after school, and even summer programs uh to provide enrichment
075uh programs. Uh for us in San Marino, we're looking specifically at where I circled where the UPP is under 55%. That's us. We still don't have enough information of what that funding will be for us. So, we're not we're not aiming to budget that in our uh in our budget at this time until we get uh better figures um from the state on on the ELO program. Um there's a new block grant program called the student support and professional development discretionary block grant. It's a long one, but it is a it is a discretionary block grant. This will be money that will be provided to schools uh to allow school districts uh full discretion on how they want to spend this money. Uh it is a one-time uh um u fund uh that will allow
076school districts to utilize this all the way through 2029. Um uh again there has been no uh clarity in terms of what it translates to. I I did attend a webinar from uh CASBO. They estimated or guesstimated approximately about $300 per ADA. So we'll keep a close eye on this. And really this program was really designed especially for those districts that are really hurting in terms of spending down to the reserves and this to help them get over that uh get over uh 25 26 hopefully through 2029. Uh again, the governor is u prioritizing literacy investments. Um we do anticipate some uh funding going towards literacy programs. Uh but we don't have too many specifics on that. Um the ethnic studies um uh high school requirements. Um as many of you may recall at uh
077past board meeting, we had our high school teachers come and present their work in terms of uh evaluating uh what to include in the ethnic studies course. Um, however, in the May revise, the governor uh is not providing any funding for this. Uh, and the law specifically states that this law will take effect upon appropriation. So, it's likely uh possibly that it may not happen because there's simply no funding going towards it in the May revised budget. And of course, this is a very popular uh chart that school services likes to emphasize that your expenditures will ultimately outpace your revenues. Uh it is a nice snapshot to kind of give you uh an idea of what the co future colas may look like. Uh but aside from that um nothing new. Um special education contribution
078still remains an area that uh districts need to really just monitor and focus on. Um average reserve levels. We get a lot of questions, you know, how's how's the district's reserve levels? How are we uh in comparison to districts across the state? And school services of California did a great study. They did a study and looked at um looking at the average uh between unrestricted general fund dollars and their fund 17 and then dividing it by their comp total budget. Um San Marino Unified um is very much in line with what other districts across the state are. So if we look at between 1,000 and 5,000 ADA, that's where we're at. Um the state averages 25.36% uh reserve. Uh San Marina Unifi is at 24.95%. So very much on par. Um however, um declining enrollment
079still remains a problem in the state of California. Uh in terms of funding for schools, um if you look at that very bottom line of that dash blue color, that's Los Angeles County. Uh it is the uh most impacted in terms of declining enrollment and a projected negative 18% all the way through 20 uh 334. Um there are a few counties that are experiencing increasing enrollment uh but not here in Los Angeles. And then uh in terms of budget development, um the accounting folks uh and I are looking very closely specifically at that 2.3 cola in terms of developing next year's budget, but we're still just monitoring all the other factors that may come into play, but school services is in advising school districts to not budget for those uh factors at this time in
080terms of developing the budget. So takes us to where uh we are with the study and discussion uh areas. So I will focus on four areas uh in terms of uh our study. Um I'd like to first start with the anticipated expenditure increases. Um we are looking at increased costs for materials and supplies. Um it's no surprise uh when Mr. Honk came uh and and shared with me a proposal for the cost of the Chromebooks. He said, "Steve, we need we need to act on this quickly because the the tariffs are really impacting the prices and we have very specific deadlines that will guarantee us this price." So, fortunately, Mr. Mr. Hong uh worked very hard to ensure that we were able to secure um some Chromebooks uh prior to the increase in tariffs. Um
081but this is not just uh about Chromebooks. This is about a lot of other uh expenditures and operating expenses and we do anticipate some increases due to the tariffs um that's going on and there's a lot of uncertainty about tariffs. You know what you hear today may be different tomorrow. Uh and it's it's it's very challenging for us to to to uh to budget that but it's something that we we are very aware of. Um, a second item that I want to bring uh the board's attention to is the fact that the school district while uh we are very grateful to the city of San Marino for the past several years in terms of providing their Prop A monies to go towards reimbursing our transportation costs. Uh we were informed um uh through Dr. Delatory
082that um the city will no longer be reimbursing the school district for uh transportation of athletic and field trips uh to the tune of approximately $150,000. Um that is uh an additional expenditure and cost that the district will have to uh one way uh either absorb or find an additional revenue source for. So, uh, we've been having very, um, very, uh, focused conversations on trying to find, uh, ways to, um, to fund that, uh, because we do believe that that is, uh, tremendous value in terms of for our students to benefit from going on field trips and going, uh, to, um, events that are related to athletics. That is that is an area that, uh, is of concern. Uh, that we will be working very closely with uh, the school sites as well to find
083solutions to pay for that. Uh secondly, um the trash service expenditure. As you may have heard, the city of San Marino um um has contracted with Valley Vista as their new uh trash service provider. Um and for the past 30 years, uh looking back at the contract that was in place, the city of San Marino did include uh trash services for um the San Marino Unified School District. However, looking at the most recent um RFP as well as the contract that was awarded, um it does not appear that San Marine Unified School District um uh is included as part of that um service agreement. And um we've been having conversations just from an operational perspective to ensure that our trash does get uh removed and and taken care of. Uh we we have communicated with
084Athens. So, we do have a a interim solution uh to ensure that we have trash service all the way through um the last day of school. Um however, we may be looking at possibly uh having discussions with uh either Athens or Value Services or possibly even doing an RFP to ensure that we have the best pricing to continue our trash services. So, was it form the does city do they form that that they're not going to provide the trash services from city? So, um based on our review of the contract, um um and also through some discussions, um with the city, uh we were informed that um the city could not include the school district as part of the uh trash service contract due to AB, I think it was 1383. It's the It's the
085new state law that requires um uh government organizations to be able to uh they have certain additional requirements that they must meet in order to separate organic food waste and for um the city to continue to do that for the school district that they shared with us that that it was not possible. So, so that is why um we are considering this additional expenditure in terms of part of our budget just for budget planning purposes that we may have to have this additional expenditure. Additionally, uh the city manager informed me that they had uh their attorney tell them that it is uh under the provisions of 1383 not legal for uh the city to subsidize um the school district's trash service and it would be transferring the cost um that really belongs to the school
086district to the consumers in San Marino is what he explained. Um but we've had this contract in place with them for probably 30 years. Um, and I'm not sure why it was legal then um to do something like that and not legal now, but perhaps that's a question um for the subcommittee of the board that meets with the subcommittee of the city council um to talk about in the future. Um it just it's it's um I understand that they're having budget challenges and they need to leave reductions. Uh but this is a big cut to the school district in one year. It's $300,000 that we're going to have to come up with that we've never had to come up with before. Uh and the 150,000 in prop a transportation reimbursement um I was informed is
087uh going toward the cost of crossing goods. So I'm sure the board is very clear on that. Uh, still can you in the meantime uh just pull out the agreement we last time we signed for the parking see what's going on. Yeah. So so we when we talk about this too we we we may absolutely I'll provide a copy of the of the parking agreement for the board. Absolutely. Okay. The next topic uh that I'd like to discuss with the board is in regards to cash flow. So, as you heard, um the governor's, uh proposal does seem to indicate that deferrals are coming. Um but it's also very important for the board to understand that um the ending fund balance is not necessarily cash. Um I think a lot of people assume that you have
088a a larger ending fund balance or a significant amount in your ending fund balance that is equivalent to cash. It's not. Um, and you know, many districts, including ours, uh, for that fact, have, um, encountered situations where we simply don't have enough cash flow. Um, and it was years ago that I remember our district had to request and, uh, pass with the board and seek approval to, uh, participate in a tax and revenue anticipation note. It's really us borrowing from the county office of Los Angeles just so that we can ensure that we have sufficient cash flow to for example make payroll, right? Um so one of the one of the areas uh that we recommend is potentially transferring um committed reserve balance of approximately of $2 million towards fund 17.2. It's to increase our
089our cash flow fund balance. And in this particular uh table, uh here's the rationale behind why we recommend that. If you look at what's currently in our cash flow 17.2 balance, it's about $1.8 million. Sounds like a lot of money, right? But if you take a look at what's circled in the orange box there, that's how much we pay towards salaries on an annual basis. It's about $30 million. If you divide that by 12, you're looking at about $2.5 million per month. our current cash flow balance wouldn't even make it for an entire month's worth of payroll. So, that is the rationale behind why um staff is recommending that we transfer the $2 million in committed funds and committed balances towards the fund 17.2 to have that in cash flow ready to go if we
090need that. Um here's a snapshot of our ending fund balance. Some folks ask you know what is what's in the ending fund balance you know why um you know why is it why is it that this amount these are all the different components and you have your 3% which is required by the state right we also have a carryover assigned balance that that's carryover money that the schools for example at the end of the year when they don't spend all of it that carries over and that is what the assigned balance for school carryover is. There's also four additional assigned balances um which is money set aside um for board goals, deferred maintenance, uh salary adjustments, uh textbooks and program innovations. Then there are the four committed balances. The four committed balances are cash flow,
091future COP payments, future fiscal stabilization, and declining enrollment. The board was very wise in past years setting up these committed balances. the board actually needs to pass needed to pass a resolution in order to commit these funds. And that's why, you know, a lot of people ask, well, what's the difference between assigned balances and committed balances? The key difference is committed balances are balances or funds that are set aside by the board of education and can only be moved by the board taking action. For assigned balances, these are balances that u that staff could move around to meet our needs. So um this is a summary of um what we the staff is proposing that what we can do is if we look at actually the committed balances first um we're proposing uh the board
092consider looking at moving $2 million from the cash flow reserve to fund 17.2 uh for specifically cash flow the future COP payments. Thank goodness for measure M passing that uh initial issuance. We'll use those funds to pay off the remaining COP. It's about $2.6 million. That will free up the future COP committed balance of $1.5 million. What staff is proposing the board consider is moving that 1.5 million towards future fiscal stabilization. There's still a significant amount of instability in terms of fiscal uh health for the state of California and ultimately for San Marina Unified School District. So the staff is proposing that future fiscal stabilization at 3.5 million and keeping that declining enrollment um of 2.5 million there as the reserve as part of the reserve. Um I did include assigned balances. So for board
093goals, it was originally $1 million. Um some of that money has been spent uh to uh promote the initiatives of the board's goals. Um, same with deferred maintenance. Of that 1.5 million, um, in tonight's uh, board general session, there is a budget transfer of that $500,000 remaining uh, to spend on deferred maintenance. Uh, there are some certain projects that we would certainly like to be able to accomplish um, even over the summer uh, to utilize that that remaining assigned balance. Um, textbook adoptions. Um, textbooks aren't going away. Uh, we still have a lot a lot of work ahead with Dr. Richtor's leadership. uh that money will come in very handy once we start adopting those materials. Um and of course program innovations. Um we were able to utilize some of it. Some of it went
094towards the um the ricotta camera project to pay for the um non-matching funds. Um there is a lot of work behind the scenes right now. Um and we anticipate a lot more work uh in the areas of AI uh that we can tap into um utilizing the program innovations funds. Um so those are some of the things that we would like the board to consider in terms of prioritizing. Uh of course no decisions have to be made today but we would very much like your input uh on what you think about this um particular strategy uh for the deferral maintenance 500k. Yes. So um and we uh use from the bar So generally when you have bond funds um you don't want to use general bond funds for deferred maintenance projects because bond funds are
095really designed to go towards capital projects meaning you're you're putting in something new or something significant that you otherwise could not afford to do. Uh with deferred maintenance um the key difference is these are projects that really should be maintained. Yeah. Right. versus some of them maintain because uh Wisconsin come in maybe became the new project. What are some of the examples of those projects that you're proposing? So one one of the projects for example um that um I I've been u brought to um um to participate in um is for example um the lights in the gym at the high school. Um it's been dim uh over a period of over almost two years now. Uh in fact um uh Mr. Care over at the high school shared with me that they've been receiving
096complaints from a competing schools and when they come and play in our gym that it's so dark um and you know this is a deferred maintenance project. It means replacing the bulbs and maybe even replacing just the light the lights the lamps themselves with light lamps that are not no longer working. Um, you know, there's been some discussion about whether or not we should be using bond money to do that. Um, h had we m properly maintained the lights in terms of how much how many lumens and how bright it is, it wouldn't be such a deferred maintenanceheavy project. Um, I I think I think the district has been very conservative in terms of being very selective about what it maintains, but you know, lighting is essential, right? Um, especially especially in the classroom, right?
097I know this is the gym, but we use the gym for all sorts of It's not going to cost $500. No. No. But thinking like mainly think the high school because the high school is getting less attention. No, it could be it could be other areas. It could be Yeah. But it could be it could be other areas like we had we had funds set aside for deferred m we had 1.5 million set aside for deferred maintenance. So some of the things for example we we replaced a lawn mower uh uh last year. um I think it was um from last year's fund and it's hard to believe how much this lawn mower costs but that is that is one of the areas that we need to maintain our lawns right um so those are
098the types of projects maintenance projects compared to contrast with capital projects right we need to replace some of the tiles there's painting projects those kinds of things um that we would need to get done over the summer. Yeah, power washing that that's done deep the deep cleaning is done every summer in anticipation of reopening our schools for the upcoming year. Um but going beyond that, one of the things that um I learned from my superintendent student advisory council is one of the things that the students complain about is really the quality of the restrooms um that they have to use. And I've heard uh you know many of our PTA parents come to me with the same concerns. Um that the bathrooms are just you know the appliances are very old. Um the tiles old
099and it just looks grungy. Um it needs to be freshened up, painted. Um you know there's cracked tiles. There's you know many examples of chipped peeling paint. um stains on the ceiling from water leaks and all of those kinds of things need to be addressed. Dividers in Deo's bathrooms um where the urinals are. That's one thing that they recommended we do. Um and I think it's a you know spot on recommendation. And so those are examples of like maintenance projects as opposed to modernization of construction where you're taking out a wall and you're upgrading, you know, your electrical or something like that. That's a really big project that would require fond investment funds as opposed to um the bird vacance. Um we were talking today about the painting project here, right? Um there's you know
100maintenance that needs to be done that would be categorized. So um we were informed that the pe the paint is peeling off the side of the building right by the by where the roof is and that would be considered a maintenance project. How how much we use for 24 to 25 the main things I wouldn't but we need to be a certain if you want to set aside money there is a first week it's going to cost a lot so it's for a lot of this pro context of our like it's not modernization. It's not construction. It's maintaining the zones that we have. So, but you're you're proposing um spending that down and then we won't have a fund for deferred maintenance anymore. We're not proposing to spend it down right now. All we're proposing
101is that it's in the committed balance. So we want to transfer it to funding which is a deferred maintenance fund. It will just be sitting there and um if we also need if we also need to have cash transfer it to the general fund getting borrowed from I just don't see that explained in this slide. That's fine. And I agree. Actually up there it says deferred maintenance 500,000 was 1.5 million. So I can see where the board might be saying, okay, where's the million dollar? What if you spend the million dollar? That's it. Looks like you spent a million dollars. There's only 500 left. But I don't see where it says that we're transferring it to committed. And then Stephen said he's going to spend it this summer. That's what you No, not the whole
102thing for sure. The 500. That's what That's what I heard. So I just think that that's where the confusion. Is that what you heard, Jess? Yeah. So when we ended 24 part of our starting balance is 1.5 million to be transferred to the deferred maintenance fund. We had only transferred a million dollars. So for this afternoon this meeting for meeting we are proposing we are requesting that the balance by 500,000 be transferred into the deferred right doesn't mean that it's going to be spent it's just going to be transferred into the fund for deferred maintenance for those types of okay it just yeah I I hear what you're saying because it doesn't look that doesn't tell the story up there you just told the story that the slide doesn't reflect so it's that's that's Good
103clarification. It helps us to better understand what you're talking about. Yeah. Thank you. That's what we were asking. At least $500,000 worth of projects for this summer. That's what we were both thinking from the information that we just heard. That's Yeah. No, I I was clarifying um what types of projects might be considered deferred maintenance, but not related to this particular transfer, not not the dollar amount. So the deferred maintenance um account is it falls under the category of committed balances and you want to is that what you said? It's a signed balance assigned balance now right but you're saying that you want to trans into the for maintenance fund which is a committed fund or not? No. Okay. Got it. So so it's a separate fund 14. Steve can you go back to this
104shows the fund balance. Oh yeah. Oh yes. So, so there's there's 114 uh deferred maintenance. Um Okay. And it's currently um one oh projected to be 2.4, right? So if the $500,000 is approved tonight, it'll increase that to 2.9. Oh. So So you want to adding 500,000? Yes. It doesn't mean it's going to get all spent, but it's I thought you want to make another 500,000. No. So reduce it. Okay. Okay. Yeah. Okay. I think we're on the same page. Didn't understand the way that it was. Yeah. But there is a lot of work to be done on the maintenance side of the house that typically we, you know, dig into that over the summer in addition to deep cleaning. Um we try to take on a lot of those maintenance projects. And um I
105I'm hoping that we can accomplish as as many of them this summer as we can. Yes. So, when will we need to um have a line item for these additional expenses that we could be incurring due to the trash, the transportation, and then with the new CIF U rules about the different divisions that we might be under um you know, where our children may not be able to travel together because, you know, there's one program has to go to a different division in a different CF. So where when are we going to kind of anticipate that? Is that in the fall that we're going to look at that that amount? So the CIF uh leaping change I believe takes place 26 27. Okay. So that's a year out. Okay. Um but we still uh have
106you know the expense of student transportation to and from athletic events. usually in the form of busing um that we will need to find a revenue source for um and in the past some of that has been funded by parents. So we may have to go back to asking parents to help pay the transportation. Um but when you look you know to see if there's any other funding switch that I mean I know the middle school allows parent drivers. Is that an option? it's free. Um it it is an option, but if you think about like a football team, you know, driving out to um I mean it is what it is. It is what it is, you know, but you got cheerleaders and football team and and the band, right? And all the bands
107instruments, they all have parents. Yeah. But it's that's yeah in a D if we're going down to zero I don't know where that money is coming from because in five years it's 2.25 million like in five years that's what the cost is looking like. So and with our vans are we able to transport the equipment if the parents were just able to transfer transport the children? Um you'd have to take the seats out, right, for the band equipment. And then the band equipment has to be secured. Doesn't vans have um some sort of vehicle or um trailer or something that they pack up. I was under I've seen I've seen that. Yeah. But I don't know if if we utilized Prop A monies in the past to help reimburse for transportation of equipment. I don't
108know. A van mom was telling me how they like had it done with science packing up a van. So or truck. So I'm wondering if that's a rental or could be but I don't think we've used proper money for that. We do use it for buses right for the city does not for those that's part of their program maybe the boosters uh cover that probably. Yeah. Yeah. So um with the textbook adoptions, did we ever look at um instead of the uh textbooks, the physical textbooks, did we ever look at e textbooks, electronic textbooks, did that ever materialize like in terms of eventually our costs would be Do you want to answer that? like I I knew we were we talked about it a long time ago but I don't know where we are on
109there. Yes. And that was actually um a large discussion held during our um committee meetings through the uh piloting committee looking at both the digital and the physical print um textbooks or curriculum if you will. And oftent times there was not a large cost saving when you bought the print with the digital. And so for our high school I believe could be wrong. I have to go back and look. I think for our high school they only selected the digital for their their curriculum and for elementary because they are a little bit younger. Um the physical printed materials were a lot easier the teachers preferred to have the printed materials but that also came with the digital materials. And so as students um metriculate to um higher grade levels, it looks like there may be
110a shift to the more digital curriculum, but in the early grades, they did prefer the printed material. In fact, we did have a couple teachers that only wanted the digital in primary, the lower elementary, and then the transition was made to also um adopt the printed material because the students really needed that hands-on printed material. And so there is a cost savings when you have both the printed and the digital. Um and that seems to be the most preferred for the adoptions that we just went through. Okay. Thank you. What about in terms of um literature actual books? I mean is have you ever looked at you know we are providing a Kindle and or some sort of reader you know without other things on it and then that can just be loaded with any
111book that they need to read for class and that can be um on loaded on their iPads uh possibly through Clever there's an app that a lot of our teachers use which is called open source K TK through 12th grade where they're able to go in and access curriculum costfree um and so that is something that they're doing to supplement the core curriculum that we have purchased whether it's the digital curriculum or the print materials but there are a lot of resources outside I mean out there now that are at no cost to educators correct standards aligned thank you welcome and um are you able to speak any more about program innovations um you mentioned AI was there anything else that was under that category that we're looking Yeah. Well, um I recall uh last
112year we also uh tapped into program innovations funds uh to help pay for SMUC Tech Academy. So that was a nice program that we offered to our faculty and staff after school. Uh because professional development um is essential. It's important for our our staff and faculty to have hands-on experience. It's not just about buying a program and and uh making it work. It's it's actually um having that experience. So um along with AI we would like to uh reinvest uh in in our faculty and staff um using program innovations. Thank you. Great. Looks good. Everything looks good. If there are no more questions, I would like to just fast forward to our last part of the presentation which is um sort of a sneak peek of uh clear gov transparency. Um, you know, in finishing
113up my my first year as the CBO, I I I kept asking myself, you know, there's got to be an easier way to understand all these financials, you know, these reports. I I I love spreadsheet sheets. Perhaps not as much as maybe as much as Angie or Susanna, but um, you know, I I was in search of a tool that can help us understand the financials better. And I found this great tool called Clear Gov Transparency. and what it does for school districts as well as uh city governments. Um they do a really good job of um communicating uh what the budget is uh in a very visual way, very easy to understand. Um and uh I evaluated a number of solutions and came across clear gov and it was clearly um the easiest to
114use solution. So, I plan to implement this uh in the fall next year uh with our uh adopted budget for 2526. Um, and what's also great, aside from uh creating powerful visuals of your uh budget, uh it also provides the opportunity for the district to really uh describe its financial story. Um, just as I was able to describe um the history of California and how SMUSD is different, I'd like to be able to do that online so that the larger community perhaps folks that um don't come to the board meetings uh right can truly understand and appreciate how unique we are in terms of a district. So in in this program, are you able to like that one question you had that the end balance is not cash? Does it have like um tutorials where
115you can push a button and it'll it'll explain like no the fiscal story began, you know, or something like that or it's just your standard plug in your your numbers and then it just kind of gives you the charts and everything. Does it have various um tutorials, if you will? That's a good question. And yes, Clear Gov does provide the ability to customize uh and also provide uh notes. Um, it allows us to cater um and explain the data versus just showing it. I think it's a good enhancement to what we're already doing. And oftentimes, um, people will go to our website and seek out information and they overlook a lot because they don't know specifically where to go or, um, you know, how, uh, how public education or governmental financing and budgeting compares with
116private industry. They're looking for profit and loss statements and things like that, which we do not have. Um, and so I think this will simplify um, providing the public with information that tells our story and our story does need to be told. I'm I'm oftentimes shocked and how many people do not know even the senator didn't know that we were not a basic eight district. Um, and that is, you know, an assumption we don't want people to make about San Marino because that's why we are always asking for uh contributions and and this program, what's the cost of this program, this basic program? Um, or does it cost more when you want more stuff on it? It is a subscription. Um, and there is an initial cost of setting it up. Um just off the
117top of my head, I believe it was about $9,000 a year um to provide this platform. Um there clear gov does provide uh additional products. Um they also provide a solution for strategic planning. Uh they provide something called a budget book. Um however, I'm really more focused on the transparency product which is just taking our existing budget and then putting it in terms where people can understand what the budget is. Are we going to utilize that with the measure and budget into? So one feature that it does offer um is something called uh department dashboards and um one creative way is that we can utilize that to actually highlight some significant capital projects. So if we're doing uh let's say a new construction of a classroom building at Valentine, we can actually use the same
118platform uh to communicate uh updates um budget for that particular project. Um so yes, it can be utilized for for bond. Thank you. Any other questions? Anyone in remote? No, you're good. That's all I have. Thank you. That [Music] uh anyone have a question for us? Okay. Uh no question. Uh I'd like to have a motion to the meeting. So moved. I'll second. Okay. Uh roll call. Uh Mr. Song I uh Mrs. Uh Ryan I M I Mr. Ch. Okay.