Banning Unified reports positive certification in first interim despite one-time spending and projected deficit

Banning Unified School District trustees on Dec. 11 approved the district's first interim financial report after business staff reported a "positive certification," meaning the district expects to meet its financial obligations for the current and two subsequent fiscal years.

Mr. Fernando Herrera, the district's business officer, said the snapshot taken for first interim shows enrollment higher than the adopted budget and new revenue recognition. "We are currently at about the 03:00 hour, presenting the first interim," Herrera told the board, and he said the change in ADA methodology and stronger attendance produced revenue increases that helped the outlook.

Chief financial presenter Rafael Ramos said enrollment for fiscal 2024-25 was 4,248 students and the first-interim snapshot for 2025-26 was 4,264 students; Ramos added the district's December 1 count is 4,289 and that number will be reflected in the second interim. "When we developed the adopted budget in June, we were projecting our student enrollment would be 4,246. We actually came in higher than that," Ramos said.

The presentation listed combined general-fund revenues at about $90,000,000 and expenditures at about $100,000,000. Ramos said the unrestricted general fund includes $1,400,000 in one-time expenditures; removing those led to an unrestricted deficit of roughly $1,100,000 on the first-interim view. He said the district's reserve for economic uncertainties increased from a June budget projection of $6,500,000 to $7,200,000.

Herrera said those one-time funds are being used to support targeted programs such as math intervention and coaching. "Some of these one-time funds are being used to form and support student achievement, which includes the coaching and intervention program," he said. The staff presentation also described projected sample increases in special education costs and adjustments to cost-of-living assumptions used in multiyear projections.

Trustees asked clarifying questions about whether a higher reserve carries penalties; Herrera replied there are no penalties for a larger reserve and that districts are advised to keep reserves equal to roughly two months of operating expenditures. Trustees also pressed staff on the timing and assumptions behind multiyear projections.

After discussion, Trustee Novellis moved and Clerk Laura Troutman seconded approval of the first interim; the motion passed 4-0. The board will receive the district's 2024-25 financial audit in January and staff said next reporting is scheduled in March.

Ending: The board approved the first interim report and staff said they will watch enrollment and state budget updates ahead of the second interim.