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District projects $14.7 million deficit; reserves fall to about 12% by 2027-28
Summary
District finance staff presented a multiyear budget projection showing a 2025-26 beginning general fund balance of $46,262,315, deficit spending near $14.7 million, and an ending fund balance projected at $31,520,819 with reserves declining from roughly 21% to 12% over three years.
A district finance staff member told the school district's governing board that the general fund is expected to begin the 2025-26 fiscal year with $46,262,315 and that the district is projecting deficit spending of nearly $14,700,000, leaving an ending fund balance of about $31,520,819.
The projection, presented as a multiyear forecast, shows assigned reserves for cash-in-stores of $20,000, a 3% reserve for economic uncertainties of $4,400,000, and other restricted carryover funds. The presenter said some funds — including student activity and instructional facility accounts — will show positive ending balances while a few funds will show deficit spending.
The projection breaks down some assigned restricted amounts as $8,300,000 in carried-over restricted funds, a student activity fund at $65,000, instructional facility and technology projects at about $11,000,000, textbook adoption near $3,000,000 and enrollment volatility at $4,500,000. The presenter said the forecast incorporates assumed increases in the Local Control Funding Formula (LCFF) tied to projected cost-of-living adjustments in 2026-27 and 2027-28, while 2025-26 shows a decrease in COLA under the assumptions used.
"This slide shows how the ending fund balance is assigned," the district finance staff member said during the presentation. The staff member also reviewed changes to employer contribution rates for CalSTRS and CalPERS used in the forecast.
Board members were told the multiyear projection assumes average daily attendance (ADA) calculated on a three-year average and anticipates a slight enrollment decrease in 2026-27 with enrollment holding steady in 2027-28. The presenter noted ongoing challenges including high student absences, long-term declining enrollment and various cost pressures that could affect the assumptions.
The presentation flagged uncertainty in state funding and said the district is awaiting the governor and Legislature to reach agreement on funding tied to Proposition 98 and other budget items. Staff said the district must be prepared to manage a proposed June 2026 LCFF apportionment deferral and to absorb potential state and federal funding reductions.
The district will present a final budget for board adoption at the June 23 board meeting, the presenter said. Staff said it will continue to monitor state budget developments and return with any necessary adjustments before adoption.
