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Public school districts are required by the State to certify, twice each year, the ability to meet their financial obligations for the remainder of the fiscal year and two subsequent years. This report shows actual activity for the period of July 1, 2022, through October 31, 2022. Financial projections are made through June 30, 2023, and for fiscal years 2023-24 and 2024-25.

The purpose of the report is to identify if deficit spending is occurring so that corrective action can be taken in time to avoid financial insolvency at year-end. The report highlights the General Fund, although all funds are included. Projections show adequate year-end fund balances in all funds.

The projected unrestricted June 30, 2023, Ending Fund Balance for the District's General Fund is $13,267,290. Of this amount, $9,015,000 is set aside for revolving cash and other committed or nonspendable purposes. The Board identified 6% reserve for economic uncertainties is $3,521,003, and the remaining unassigned and unappropriated amount is $731,286.

The projected restricted June 30, 2023 Ending Fund Balance for the District's General Fund is $9,984,221. This is mostly comprised of multi-year grants where the full amount is received in a single year

Management is pleased to present a Positive Certification of Financial Condition, meaning that the District will be able to meet its financial obligations for the current fiscal year and subsequent two fiscal years and meet the 3% minimum State Reserve for economic uncertainty.

The primary factors that will impact our ongoing annual budget include:

Enrollment uncertainty
Insufficiently funded mandated programs, including Special Education and universal free meals
Impact of supplemental taxes

The State and Federal governments only provide a portion of the revenue necessary to support the required mandated programs of the District. As a result, approximately $10.3 million in unrestricted general fund contributions are necessary to support those required programs. While effort is being put forth to manage these programs, the costs continue to rise with increases in frequency and severity of student needs, as well as escalating costs of contracted services.

Staff will continue to provide updates to the Board. In January 2023, the Governor will present revised projections for 22-23 as well as a proposed budget for 23-24.

Staff recommends approval of the 2022-23 First Interim Fiscal Solvency Report, as presented.