Fresno Unified’s reserves have become a hot topic amongst critics of the district’s recent decision to move forward with potential layoffs.

The Fresno Teachers Association is stoking the flames in social media posts, which claim reserve levels are almost double what the district says.

The organization is citing the unrestricted funds ending balance of $179 million, of which $92 million has been placed in reserve. The rest has been “committed” to one-time payments for multi-year plans, said district spokesperson AJ Kato.

But, in FTA President Manuel Bonilla’s eyes, this is a choice that allows the district to “play semantics.”

“They get to put in whatever amount they want in that reserve and say, well, we only have 5% (or) we only have 2%. But all of that is just a line item,” Bonilla previously told GV Wire. “It’s what’s called a structural reserve. They’re stocking away money.”

However, some of this money is actively being spent, while the rest is promised for future use, according to Kato.

“The district is not choosing to store away funds rather than using the money for employees’ salaries. The majority of the money is already committed to multi-year plans in several areas,” Kato said. “To imply the district is stockpiling money is false.”

Where Does the Money go?

The ending unrestricted funds not placed in the reserve are dedicated to future textbook adoption, pandemic learning recovery, support negotiated for students by FTA, and inventory.

Altogether, the district has committed about $81.9 million to these purposes.

“The 2025/26 Proposed Budget includes a multi-year approach for utilization of one-time state and federal recovery resources to address the learning needs of students and the effects of the pandemic,” budget documents state.

The district has allocated $23.6 million to cover K-12 math textbook adoption in the 26-27 school year and English language arts adoption in 27-28.

A one-time $32 million pandemic recovery fund is supporting salaries, benefits, and supplies. Another $20 million goes toward an agreement with FTA requiring $30 million to be spent over three years on student support.

The district committed $6.3 million to inventory, which “includes the district warehouse of items and areas that are prepaid for a future year that must be reserved.” Inventory is defined as  materials such as computers, art supplies, janitorial supplies, and other necessities.

“It is important to understand they are one-time in nature and do not represent a long-term reserve for the district, as they will be fully utilized by the end of the 2027-28 school year,” Kato said.

Potential Layoffs Heighten Criticism

The size of district reserves is often a point of public scrutiny, but criticism has escalated over the news of potential layoffs.

Fresno Unified is considering more than 250 positions for layoffs, hour-reduction, and reorganization to manage the massive deficit caused in part by declining enrollment.

The district has lost about 1,200 students a year since the pandemic, costing about $15 million annually in state funding.

But FTA and its allies believe money can be taken from reserves. They say reserve funding exceeds 10%, five times the 2% state minimum.

The district only reports 5.83% in reserves, following Board policy that mandates the reserve stay at 5-10%.

The Importance of Reserves in Education

School districts rely on a volatile funding source, which allows for little consistency in revenue.

“It’s about the source of dollars that goes up and down that causes us to react. And reserves are critical to stabilize that,” Michael Fine, CEO of the state’s Fiscal Crisis and Management Assistance Team said in a recent EdSource roundtable. “Too many reserves is an indicator that we aren’t doing our job, but sticking to the state minimum (2%) is completely inadequate.”

Budget reserves are intended to allow school districts to respond to financial challenges, such as those confronting Fresno Unified.

“The district has utilized the reserves for three years to strategically plan for budget adjustments,” Kato said.

The reserve level is expected to drop to 3.69% in the upcoming school year, according to district documents.

“Reserves are currently being spent down. And if we do not take action in order to reduce that deficit, what will occur is the district’s reserves will drop below the 2% state requirement,” district CFO Patrick Jensen previously said. “And that’s not something that we can do, because that would put us in a scenario of … being under threat of state takeover.”