Orange County Board certifies first interim budget as ‘positive’ amid Access program deficit

The Orange County Board of Education voted 5–0 to adopt a 'positive' certification of the county office’s first interim financial report after a lengthy presentation and question-and-answer session with fiscal staff.

Fiscal services staff described state and local revenue trends, the Legislative Analyst Office’s assessment of Prop 98 and the county’s multiyear projections, and said combined general-fund projections show a $17,300,000 deficit driven largely by the spend-down of restricted categorical program dollars. The staff recommended the positive certification to meet the California Department of Education’s first-interim reporting requirement.

David (fiscal services presenter) told trustees that the county’s LCFF projection for 2025–26 is roughly $102,800,000 and that state revenue movements tied to capital gains have produced a temporary increase in the Prop 98 guarantee. He said the LAO cautions those gains may not be sustainable and that the statutory cost-of-living adjustment (COLA) assumptions have shifted during the budget window. Staff presented that the Access program had closed fiscal year 2024–25 with about a $15 million deficit and that, after current-year adjustments, the outstanding deficit is closer to $10.5 million. David said some of that deficit reflects prior-year LCAP expenditures and restricted categorical spend-downs and described steps already taken, including closing positions and using a grant to cover certain costs.

Trustees pressed staff for plain-language answers about causes and remedies. One trustee asked, 'How much is Access in the red?' and David replied that the program’s 2024–25 deficit was about $15,000,000 at closeout and that current adjustments reduced that figure. Board members and staff discussed staffing adjustments through attrition, reconfiguration of classes, and other expenditure changes as options to reduce ongoing deficit pressure. Staff said Connections typically does not run in the red because costs are billed back to referring districts.

The board also discussed labor negotiations. According to David, the district’s last offer included a 3.5% increase for salary ranges 2–5 and a 9% increase for range 1 plus coverage of increased health-benefit costs; certificated staff had positioned around a 6.5% across‑the‑board ask with an additional 2% COLA on top. David said the parties had reached the stage of preparing paperwork that could lead to an impasse process in January.

Trustee Williams moved to approve the first interim report as 'positive'; the motion was seconded and the board voted 5–0 to adopt the certification. Staff will submit the certified report to the California Department of Education by the required deadline and return to the board with a midyear Local Control and Accountability Plan (LCAP) update and the second interim report in mid‑March.

What’s next: staff to file the first interim report with CDE by the stated deadline and present a mid‑February LCAP update and the second interim financial report in mid‑March.