Dinuba Unified tightens belt on FY ‘24-25 budget

Dinuba Unified School District prepares tighter budget for fiscal year 2024-25, projects enrollment decline

The Dinuba Unified School District Board of Trustees discusses current events at a meeting June 13, 2024. (Serena Bettis)
Serena Bettis
Published June 21, 2024  • 
9:00 am

DINUBA – As cities around the Valley adopt their budgets for the upcoming fiscal year, school districts are looking to do the same, albeit with higher numbers and an abundance of caution.

Dinuba Unified School District (DUSD) is preparing to adopt its budget for fiscal year 2024-25 after Gov. Gavin Newsom’s May Revise of the state budget cleared up some of the questions clouding K-12 education funding that has lingered ever since the governor’s office announced a multi-billion dollar budget shortfall. Although a final budget agreement has not been reached at the state level, DUSD must adopt its budget before June 30. 

The district Board of Trustees plans to do this at its next meeting on June 27 after DUSD Chief Business Official Rachel Nunez presented the tentative budget to the board during a public hearing held on June 13. Nunez noted the projections in the budget were made using the information available to the district, and staff will continue to be careful with the financial resources they have. 

“As school district officials, we must ensure that our district is able to meet all of our financial obligations each year,” Nunez said. “This is done by evaluating the district’s current and anticipated fiscal condition while developing plans to address any shortfalls the district may experience now and in the future.”

Nunez provided an overview of the district’s financial position, including expected state funding allocated through the Local Control Funding Formula (LCFF), expenses related to certificated and classified employee salaries and benefits and the district’s debt service payments for the year.

Through the LCFF, the district receives funding based on three factors: the average daily attendance (ADA) expected for the upcoming year, the unduplicated pupil percentage — which provides additional funding for students classified as English learners, low-income or in the foster care system — and a cost of living adjustment. 

Nunez said based on current demographics, she is predicting a decline in ADA from fiscal year 2023-24 to 2024-25, continuing into fiscal year 2025-26 as well. For 2023-24, the district had an ADA of 6,225, which Nunez is predicting will decline to 6,004 for the upcoming year and to 5,901 for 2025-26. For 2026-27, the district has predicted a slight uptick in ADA to 5,927.

Per student, the base grant provided through the LCFF is projected to be $10,025 for transitional kindergarten through third grade, $10,177 for fourth through sixth grade, $10,478 for seventh and eighth grade and $12,144 for ninth through 12th grade.

DUSD’s unduplicated pupil percentage for 2024-25 is 85.2%, Nunez said. The May Revise of the state budget increased the cost of living adjustment from the 0.76% proposed in the January budget draft to 1.07%. This is still lower than in previous years; 2023-24 saw an adjustment of 8.22% and 2022-23 saw an adjustment of 6.56%. 

Taking all of these factors into consideration, the district will receive more than $91 million from the state through the LCFF. 

Overall, Nunez said the district is expecting to bring in $93.3 million in unrestricted general fund revenues and $29.8 million in restricted general fund revenues, meaning the district has to spend that money a certain way. For expenses, DUSD is projecting it will spend approximately $92 million from the unrestricted general fund and $34 million from the restricted general fund. 

In the unrestricted general fund, the district is beginning the 2024-25 fiscal year with a balance of more than $28.9 million and will end the year with a balance of more than $22.7 million, a net decrease of more than $6 million. In the restricted general fund, the fiscal year beginning balance is more than $37.4 million and is projected to end the year at more than $33.1 million, a net decrease of more than $4.2 million.

Due to a state-mandated cap in the amount of funds held in reserves — which is required to be no more than 10% of total general fund expenses for the year — DUSD had to commit additional funding to various projects, including costs related to the new high school, the reconfiguration of the old high school to the middle school and payments into Other Post-Employment Benefits (OPEB), Nunez said. 

This means that while the final unrestricted general fund balance – after taking into account revenues and expenses – was approximately $22.7 million, the district had to commit to spending an additional $10.1 million. This put the reserves at $12.6 million, which is 10% of the combined unrestricted and restricted expenses of more than $126 million.

Nunez said the district’s reserves have never been that low.

While still in a stable financial position, trustees expressed concern over the reserve level and the overall net decrease in the budget that they anticipate they will see this year.

“I was looking at just the rough figures, revenues and expenses, unrestricted plus restricted, we’re proposing a $2.9 million deficit for the year,” Trustee Ron Froese said. “So that’s the first time we’ve seen that from the get-go. We don’t have much leeway there. Especially if we’re projecting declining enrollment, and so that’s gonna even hurt us more if we have more than what we estimate.”

The budget was presented as an informational item only at the June 13 meeting and will be voted on at the next board meeting on June 27.

Serena Bettis
General Assignment Reporter