The Placentia‑Yorba Linda Unified School District on Dec. 16 received a first interim financial report that warns of multi‑year deficit projections and approved steps intended to reduce borrowing costs.

John Papalardo, presenting the first interim, outlined assumptions underpinning the district’s multi‑year projections: an anticipated decline in enrollment of about 1.8% annually (roughly 400 students per year), a tentative statutory COLA projection (staff used 2.3% for the current year in modeling), and rising health and welfare costs (projected at 8% increases). Based on those assumptions, the presentation showed general‑fund revenues of roughly $249.1 million against expenditures of about $261.3 million for the current year, a technical deficit that staff said is mitigated in the near term by a sizable beginning unrestricted fund balance (about $66 million).

Papalardo said the district will prepare a budget stabilization plan to address an estimated $16.1 million adjustment needed to maintain fiscal solvency for future years. He emphasized that restricted one‑time federal grants have supported programs in recent years but will decline and that long‑term staffing and program choices must be examined.

On related fiscal measures, trustees considered Resolution 25‑18 to authorize the sale of 2026 refunding certificates of participation (COPs) to refinance outstanding COP debt at lower interest rates. Staff clarified that the financing uses a leasehold structure and does not transfer title to district property. Fieldman Financial’s Jason Chung answered trustee questions on collateral mechanics and explained the historic context (a 2016 refunding used two properties as collateral; the current refunding will use a smaller collateral package and aims to reduce interest expense). Trustees approved the refunding authorization.

The board also took a procedural vote on the required first interim certification (positive/qualified/negative) consistent with State of California reporting deadlines; staff reported they submitted materials to the county and recommended a positive certification for the current and two subsequent fiscal years, noting the need for a stabilization plan. The board voted to approve the interim report as presented.

Trustees asked staff to return with specific options for cost reductions and revenue strategies during the spring budget cycle so the board can consider staffing‑level, non‑personnel and vacancy management changes before the 2026–27 budget adoption.