The San Marino Unified School District Chief Business Official Michael Lin recently closed out 2023 with the first interim financial report at the last Board of Education meeting of the year.
The report, based on financial data collected by Oct. 31, was submitted to the Los Angeles County Office of Education by Dec. 15. Another budget update will be brought to the Board in March that captures the Jan. 31 snapshot, the second interim financial report.
Lin, who said of the three possible certifications SMUSD could have fallen into — negative, qualified or positive — he was happy it was the latter.
“I’m pleased to convey on behalf of the accounting team, led by our director of accounting Vangie Lingat, that SMUSD is in the positive range for board certification,” Lin said. “What that means is the district can meet our financial obligations for the current year and two subsequent years.”
REVENUES
As of the end of September 2023, the district registered enrollment at 2,939, which increased by 179 since 2022. This, Lin said, translates to a projected rise in LCFF, or Local Control Funding Formula, with funded average daily attendance (ADA), and local donations and parcel taxes. The district is anticipating a 1% cost of living adjustment, or COLA, for 2024-25.
“The good news from a fiscal solvency standpoint is that our enrollment has not only stopped decreasing, but has increased since last year,” Lin said. “Enrollment is key when we look at fiscal projections.”
When comparing the first interim report and last year’s, the change in the LCFF increased to $33 million from $29.8 million. Special education funding increased to $3.97 million from $3.12 million. Parcel tax revenues increased to $5.99 million from $5.86 million. On the other hand, the comparison also showed that federal revenues decreased to $2.57 million from $2.62 million and the San Marino Schools Foundation slipped to $2.01 million from $2.02 million.
GENERAL FUND REVENUES
A chart detailing the general fund revenues in 2023-24 indicated that property taxes will contribute 36% with $18.66 million; state aid and the Education Protection Act will bring in 28% with $14.36 million, parcel taxes make up 11% with $5.99 million, other state revenues add up to 7% with $3.56 million, special education include 6% with $3.18 million, San Marino Schools Foundation offers 4% with $2.01 million, PTAs, ASBs and miscellaneous take up 2% with $952,907 and facility use and interest round out the last 1% with $477,416.
“As you can see, property taxes are not enough,” Lin said. “We need the state to provide subsidies in the form of state aid to get us to the minimum funding level of 64% in LCFF that we qualify for based on our student demographic composition and grade span enrollment numbers. In previous years, the bulk of our revenue has come from LCFF funding. We also see that about a quarter of the total revenues come from local sources, over $3 million, or 6% of this is in the form of special education transfers to support our students with disabilities. Federal dollars only account for 5% of our revenues in the form of title funds used for low-income, English-language and professional development programs.”
KEY EXPENDITURES
When comparing the first interim reports of 2023 and 2022, top-spending expenditures increased to $19.75 million from $17.83 million. Classified salaries went up to $8.64 million from $7.92 million, employee benefits rose to $12.25 million from $11.62 million, books and supplies went up to $4.12 million from $3.42 million, operating expenditures increased to $9.51 million from $8.47 million and equipment rose to $2.02 million from $1.49 million.
“Seventy-two percent of the district’s expenditures are in people, the rest are in books and supplies, operating expenditures and equipment,” Lin said.
FIRST INTERIM ENDING BALANCE
Based on the revenue factors for the county and the state, as well as the recent staffing increases, Lin said SMUSD is projecting a beginning balance of $23.12 million and ending balance of $16.55 million, along with a lower COLA of 1% next year.
“We will likely continue with deficit spending,” Lin said. “This is in light of sobering news from the legislative analyst’s office regarding a revenue shortfall … but because of adverse weather phenomenon in 2022 last year, our basement at the middle school flooded and we had atmospheric rivers, and a lot of damage was caused.
“A comforting thing to note when we are looking at the first interim ending balance is that the Board took wise steps to commit reserves last year and the year before to help the district weather the tough financial times that we will be experiencing ahead.
“We’ve been through financial challenges before, and staff is working diligently to ensure the district is financially solvent,” Lin concluded.
First published in the Jan. 4 issue of the San Marino Tribune
