Gilroy Unified CBO warns of multi‑year shortfall as board holds public hearing on 2024–25 budget

Alvaro Mesa, Gilroy Unified’s chief business officer, told the school board during a public hearing that state budget uncertainty and declining enrollment are creating a multiyear budgeting challenge for the district.

Mesa said the governor’s May Revision left a large state revenue gap and that the state will use deferrals — delaying cash payments — that will affect district cash flow. “We will have deferrals, meaning a cash payment delay from June of this calendar year,” he said, noting the district expects roughly a $1,000,000 apportionment deferral to be received in July.

Mesa presented the district’s multiyear projections for the unrestricted general fund and highlighted a year‑over‑year net revenue loss of roughly $2.6 million. He said salary and benefits already consume about 88% of unrestricted spending and warned that small changes in COLA assumptions can translate into large dollar swings: “A 1% change in COLA is about $1,000,000,” Mesa said.

Kimberly Smith reviewed the budget detail for the board, noting total general fund revenues of about $167 million and that roughly $11 million of restricted learning‑recovery funds are shown as an encumbered three‑year plan. Smith said the learning‑recovery balance is intentionally carried forward and is not part of unrestricted operational revenue.

Trustees asked questions about the district’s use of restricted carryover and the size and timing of federal and state one‑time grants. Trustee Fayock pressed the presenters on the multiyear projection and whether the restricted fund balances should be counted as part of available resources; Mesa responded that carryover grants are booked differently and that the district plans to spend the learning‑recovery funds across three years.

Mesa recommended that, if COLA funding is restored in future years, a portion should be directed to reduce multiyear deficit spending rather than added to ongoing obligations. He said the district will bring a 45‑day budget revision in early August after the state completes final trailer‑bill language.

No members of the public spoke during the hearing. The presentation will be followed by the board’s formal budget adoption process once state actions and the 45‑day revision are known.