General Fund reserve continues to shrink as Glendale Unified files first interim budget
A structural deficit that began for the Glendale Unified School District more than a decade ago appears destined to continue into the future, according to a district report presented at the last school board meeting.
Glendale Unified filed its first interim budget on Dec. 17 with the Los Angeles County Office of Education and certified the budget as “positive.”
“The definition is that we will be able to meet our financial obligations for the current and two subsequent fiscal years,” said Stephen Dickinson, Glendale Unified’s chief business and financial officer.
Though the district projects it will be able to pay its bills while maintaining a state-required 3% reserve on Dec. 17, the outlook is not all rosy.
District staff acknowledged in the 494-page board packet that GUSD “has had a structural deficit spending pattern since 2008,” which is about to plunge school reserves into new lows.
District staff is projecting the General Fund Reserve balance to dip to $43.51 million by the end of this school year, which would be its lowest since $39.57 million five years earlier.
Beyond this year, the reserves are projected to fall to $36.14 million by the end of 2020-21 school year, $28.03 million by the close of 2021-22 and $24.35 million at the conclusion of the 2022-23 school year.
The district’s reserves were at $62.19 million in the final throes of the Great Recession at end of the 2010-11 school year.
The reserves continue to be eaten away as the district struggles to balance its budget.
Glendale Unified is projecting a deficit of roughly $5.8 million for the current school year, a significant jump from when the budget was formally adopted in June.
Then, the deficit was projected at $4.29 million, and that estimate dropped to $1.53 million in August.
December’s report showed growth for the district in both revenue and expenses.
Glendale is now expected to produce revenue totaling around $304 million, up from $294.02 million in June and $296 million in August.
One reason for the bigger intake is a one-time state grant of $2.4 million for preschool special education funding that Dickinson didn’t seemed enthused about.
“This is just a drop in the bucket for one year only,” he said. “It was really quite meaningless. Not that we’re going to turn it away, but one-time funds are far less valuable to us than ongoing funds.”
On the flip side, listed expenditures of $298 million in June and August soared to $310 million in the first interim, driven in part by debt amounting to $3.5 million that was carried over from the previous school year.
The overwhelming driver for district expenses is employee costs, which are projected to total $257 million this year, or 83% of all expenditures.
Last year, Glendale Unified staff filed a qualified budget at the first interim deadline that indicated the district might not be able to meet its financial obligations.
The certification led the county to warn Glendale Unified via a Jan. 14, 2018, letter to make corrections to the budget or risk potential county “intervention.”
Two weeks later, Glendale Unified dismissed Supt. Winfred B. Roberson.
