Financial exigency means that the financial resources of a school district are insufficient to support its instructional programs or it is unable to finance the full compensation of staff for the current or next fiscal year.
A school district board of trustees may declare financial exigency under one or more of the following conditions:
- The unassigned General Fund balance per student in weighted average daily attendance (WADA)
- has decreased by more than 20 percent over the past two years or
- is projected to decrease by 20 percent in the next year compared to the current year.
- Enrollment has declined by more than 10 percent over the past five years.
- The total General Fund funding per student in WADA
- has decreased by more than 10 percent over one year or
- is projected to decrease by 10 percent in the next year compared to the current year.
- A natural disaster or casualty loss has occurred and requires expenditures for repair or remediation that exceed 15 percent of the current year General Fund budget. A natural disaster or casualty loss means damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual.
- The district has experienced any of the following, or a combination of the following, that exceeds 15 percent of the current year General Fund budget:
- an unanticipated major expense, including significant repair costs;
- litigation expenses, excluding lawsuits against the state; or
- tax refunds.
- The district has experienced any other circumstances, and the commissioner of education has approved a declaration of financial exigency based on these circumstances.
Each time a school district’s board of trustees adopts a resolution declaring financial exigency or a resolution to extend a financial exigency declaration, the board must notify the commissioner within 20 calendar days of the adoption. The notice must include the date the resolution was adopted and the reason(s) for the declaration of financial exigency as specified in the Requirements section above. The notice must be signed by the board president and superintendent.
A declaration of financial exigency expires at the end of the fiscal year in which it is made unless the board adopts a resolution before the end of the fiscal year declaring the continuation of the financial exigency for the next fiscal year.