School finance: school districts: annual budgets: reserve balance.

Existing law requires the governing board of a school district, on or before July 1 of each year, to hold a hearing on, and adopt a budget for, the subsequent fiscal year. Existing law requires the governing board of a school district that proposes to adopt a budget that includes a combined assigned and unassigned ending fund balance in excess of the minimum recommended reserve for economic uncertainties adopted by the State Board of Education to provide specified information for public review and discussion. This bill would instead require the governing board of a school district that proposes to adopt a budget that includes unassigned ending balances in the school district's general fund and special reserve fund for other than capital outlay projects in excess of the minimum recommended reserve for economic uncertainties to provide specified information for public review and discussion. The bill would also require the governing board of a school district to adopt a policy establishing procedures for reporting the fund balances as reflected in the school district's governmental fund financial statements, as specified. By imposing additional duties on school districts, the bill would impose a state-mandated local program. Existing law limits the amount of the combined assigned or unassigned ending fund balance contained in a school district's annual budget in any fiscal year immediately after a fiscal year in which a transfer is made into the Public School System Stabilization Account. Existing law establishes formulas for calculating the maximum amount allowable for school districts with less than 400,000 units of average daily attendance and for school districts with more than 400,000 units of average daily attendance, as specified. Existing law authorizes the county superintendent of schools to grant an exemption from those requirements if the school district provides documentation indicating extraordinary fiscal circumstances substantiate the need for a combined assigned or unassigned ending fund balance that is in excess of the minimum recommended reserve for economic uncertainties, as specified. This bill would instead provide that the school district's budget shall not contain unassigned ending balances in the school district's general fund and special reserve fund for other than capital outlay projects in excess of 15% of those funds, and would require a county superintendent of schools to grant a school district an exemption if the school district provides documentation indicating extraordinary fiscal circumstances substantiate the need for those fund balances, as specified. The bill would require the governing board of a school district to report in a public meeting its assigned and unassigned fund balances in the school district's general fund and special reserve fund for other than capital outlay projects, as specified. Because the bill would impose additional duties on school districts and county superintendents of schools, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.