Ross Valley School District pressed to outline budget plan

The Ross Valley School District must outline a plan to restore fiscal stability its budget by Dec. 15, a county education official said this week.

Although the district’s budget was approved for the current year and two years out, warning lights are flashing in the roughly $30 million spending plan, said Breean Brown, an assistant superintendent with the Marin County Office of Education.

In particular, a roughly $2.6 million deficit is causing rapid depletion of the budget reserves, Brown said in a letter to the district on Monday.

“The district is deficit-spending at an unsustainable rate, resulting in a 61% decrease to the projected ending fund balance over three years,” Brown wrote. The ending fund balance refers to budget reserves.

Because of that trend, “the district is required to submit a budget reduction and reserve restoration plan with the first interim budget,” Brown said. The first interim budget report covers the first four months of the fiscal year, from July 1 through Oct. 31.

Chris Carson, the district’s chief business officer, told trustees on Wednesday that the required “budget reduction and reserve restoration plan” does not have to be implemented right away.

“They just want to see the plan,” Carson said.

The state deadline for the district to issue preliminary layoff warning notices is March 15. Neither Carson nor Superintendent Tyler Graff discussed the possibility of layoffs, but they have previously said that they were planning $500,000 to $1 million in budget cuts by the end of the current school year.

“The fiscal cliff that we saw in the future? This is that future. The future is today,” Carson told trustees.

Earlier this year, district officials had hoped to head off the crisis by passing Measure E, a parcel tax renewal and increase proposal, in a May special mail-in election. Almost 63% of district voters favored the plan, but it was not enough to carry it over the two-thirds threshold to pass.

Graff told trustees on Wednesday that he is optimistic a new parcel tax effort launched earlier this month will generate the right combination of elements to appeal to a greater number of voters. The district aims to place a new parcel tax measure on either the June 2 primary election or the Nov. 3, 2026, general election ballot.

“This community is right there,” Graff said. “It’s just the delta between that 63% and the 66%. We’ll get there.”

The second of two public forums on the parcel tax is scheduled for 5:30 to 7 p.m. Thursday at the district office at 100 Shaw Drive in San Anselmo. After that, the district intends to form a committee of 20 leaders to help guide the new campaign.

The current parcel tax, which generates about $7.8 million annually, expires in 2028. Measure E would have renewed that amount and generated another $3 million so that the district could give teachers raises and also offset the structural deficit.

The district’s ending fund balance, or reserves, for 2025-26 is projected at 10.2%, which is at the district’s target level of 10%. However, it dips to 8.6% in 2026-27 and 6.4% in 2027-28.

The state minimum reserves amount is 3%. Lower than that, a school district would face potential insolvency and a possible takeover by the state. Small school districts especially are advised to have higher reserves levels because they would be hardest hit by an unexpected large expense, such as a legal settlement, Carson said.

Although a few comparable school districts in Marin have relatively low reserves, none has the added budget stress of the structural deficit, Carson said.

The main cause of the district’s financial problems is a lower-than-normal state revenue allocation. Ross Valley receives about $11,700 per student in state subsidies, compared to the state average of $14,500 per student, Graff said. The $11,700 per student amount is the lowest of all 17 Marin school districts.

“If we just had the state average, that would be $3,000 more for each of our 1,700 students, more than $5 million for the district,” Graff said.

The smaller state subsidies can be attributed to Ross Valley’s relatively low property tax base. Many homes are covered by state Proposition 13, which limits the amount of property tax increases on a house. Also, the district has a relatively small number of foster youths or low-income youths, which would generate additional state subsidies.

On the plus side, attendance and enrollment at the district are increasing, Graff said. The district, which is state-funded, receives additional subsidies for each student who attends.

“We’re at our highest attendance rate in four years,” Graff said.

“We need to increase our attendance by 30 or 40 students, reach the state average in subsidies, make cuts to the budget and pass the parcel tax,” Graff said. “All four have to happen to balance this budget.”