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102 <br /> EXECUTIVE SUMMARY Page 18 <br /> Board of Education to implement a tiered spending reduction plan to restore financial stability, <br /> eliminate deficit spending, and rebuild reserves over time. Tiers I and I1 were enacted as <br /> immediate, stop-gap measures to stabilize operations and return the District to a structurally <br /> balanced position by FY 2025, while Tier III was designed to restore long-term sustainability <br /> and rebuild local fund balance reserves in future fiscal years. As a result of the first two tiers, <br /> approximately $360,425 was restored to fund balance in FY 2025, demonstrating that the <br /> corrective measures were successfully implemented and achieved their intended outcome. <br /> During FY 2025-2026, Tier III was specifically designed to rebuild reserves to a more <br /> sustainable level. Based on current projections, the District estimates that FY 2026 will conclude <br /> with approximately$4.5 million in unassigned fund balance. This represents meaningful <br /> progress toward restoring financial stability and moving closer to the BOCC's minimum target <br /> reserve level. <br /> As a result of these actions, the District anticipates entering FY 2026-27 with a structurally <br /> balanced budget that includes an estimated surplus of approximately the same magnitude. This <br /> potential structural surplus will allow the District to continue rebuilding fund balance toward a <br /> sustainable level in alignment with policy and cash management requirements. <br /> FY 2026-27 Board of Education's Budget Request Summary <br /> In summary, the FY 2026-27 budget request reflects a balanced and forward-looking approach <br /> that addresses both the immediate operational needs of the District and its long-term financial <br /> sustainability. The continuation budget underscores the real and unavoidable cost pressures <br /> required to maintain current service levels, driven largely by compensation, benefits, and <br /> inflationary impacts. Even after accounting for projected local revenue growth, a significant <br /> continuation need remains, highlighting the structural challenges facing the District as it works to <br /> sustain high-quality educational services in a constrained fiscal environment. <br /> At the same time, the Board of Education's expansion request represents a strategic and <br /> intentional investment in the future of CHCCS. The proposed enhancements to both classified <br /> and certified compensation structures are critical to maintaining competitiveness in a challenging <br /> labor market, supporting employee retention, and recognizing the essential contributions of staff <br /> across the organization. Similarly, the investment in instructional resources acknowledges the <br /> evolving nature of curriculum delivery and the need for sustainable, predictable funding to <br /> support both materials and implementation. Together, these targeted investments align with the <br /> District's commitment to realignment and reinvestment in high-impact areas that directly support <br /> student success. <br /> Equally important is the District's progress in restoring financial stability through disciplined <br /> fiscal management and a multi-year recovery strategy. The rebuilding of fund balance from <br /> critically low levels to a projected $4.5 million demonstrates a strong commitment to structural <br /> balance and responsible stewardship of public resources. Maintaining this trajectory will be <br /> essential to ensuring long-term resilience, meeting policy targets, and preserving the District's <br /> ability to respond to future uncertainties. <br /> Chapel Hill—Carrboro City Schools—FY 2026-27 Board of Education's Budget Request <br />