Placentia‑Yorba Linda Board adopts 2025‑26 budget amid warnings of multi‑year deficits

The Placentia‑Yorba Linda Unified School District board voted 5‑0 on June 17 to adopt the district's 2025‑26 budget after staff outlined a multi‑year fiscal outlook marked by declining enrollment and state revenue uncertainty.

Interim business services chief Yolanda Velasquez told the board the district’s combined general fund revenue for 2024‑25 was about $375 million, with the Local Control Funding Formula supplying roughly $270 million (about 74%). Total expenditures were presented as approximately $414 million, with salaries accounting for roughly 80% of that figure. Velasquez said the district currently projects an unrestricted ending reserve of about $62.7 million but forecasted that reserve percentages would decline in subsequent years without additional reductions or revenue changes.

Velasquez and staff highlighted several state and federal risks: the May revision to the governor’s budget, an anticipated $4.4 billion decline in the state’s minimum Proposition 98 guarantee, possible additional state cash deferrals, and reductions to funding assumptions for universal transitional kindergarten. She said the May revision proposes new deferrals that would postpone some LCFF apportionments from June to July and noted the district can handle the short delay this year because of healthy cash reserves.

Board members and staff reviewed fund‑level details, including childcare (Fund 12), cafeteria (Fund 13), capital facilities, and the district’s self‑insurance fund. Velasquez reported the district’s unrestricted general fund next‑year revenue is estimated at roughly $289 million and unrestricted expenditures around $253.6 million once transfers and designated contributions are considered. The combined 2025‑26 budget figures presented showed total revenues of about $356 million and total expenditures of about $399 million when restricted funds and transfers were included.

Velasquez said the district expects a need for $15.6 million in ongoing reductions by 2026‑27 to maintain fiscal solvency and meet County Office expectations. She described potential reduction approaches that will be part of a forthcoming budget stabilization plan: tighter staffing at sites, position reductions and non‑personnel cost savings. The plan will be brought to the board for review prior to adoption of the 2026‑27 budget.

Trustees asked for and received clarifications about one‑time versus ongoing costs, the district’s reserve policy, and the source of several large fund balances. Board members also asked that staff continue to identify options to limit the program and staff impacts of any required reductions and to return with more detailed line‑item analyses.

The board also voted to adopt Resolution 2425 establishing the Education Protection Account allocations for 2025‑26 and certified AB 1200 reporting for bargaining impacts. Velasquez said the district will monitor the governor’s final budget and return with material revisions within 45 days of the state budget signing if needed.

What happens next: staff will prepare the budget stabilization plan and timeline for board consideration and will present final 2024‑25 unaudited actuals to the board when the books close. The board asked staff to prioritize options that preserve classroom positions where possible.