Orange Unified board certifies positive financial outlook despite one-year deficit

The Orange Unified School District board voted unanimously to issue a positive certification on the district's 2024'25 second interim financial report, accepting staff's projections that show a current‑year deficit but a return to balanced budgets in 2025'26 and 2026'27.

During a presentation to trustees, district fiscal staff said combined projected revenue for 2024'25 is $421,300,487 and projected expenditures are $437,045,877, producing a projected deficit of $15,745,390 that staff attributed primarily to timing and restrictions on one‑time funds. The presenter said the district's ending fund balance is forecast at about $200.9 million for 2024'25 (roughly 46% of expenditures) and that total reserves exceed the state minimum 3% requirement.

The presenter outlined key budget assumptions behind multiyear projections: statutory cost‑of‑living adjustments (COLA), enrollment and funded average daily attendance (ADA) estimates, STRS and PERS rates, and expected state budget actions. Staff said the district used a 1.7% COLA for 2024'25, projected enrollment of 22,667, and a funded ADA estimate tied to 22,270.60.

Trustees asked about the potential impact of federal funding changes on Title I and nutrition programs, whether the district's reserves would be sufficient to bridge any gaps, and efforts to raise ADA through site‑level attendance strategies and independent study. Fiscal staff said federal funds make up roughly 6%–8% of revenues and that the board can restrict or assign funds to mitigate future uncertainties.

Trustee Thomas moved to approve the positive certification and Trustee Yamasaki seconded; the motion carried on a 7'00 vote. Board materials note the district must certify the interim report by March 15 and that the governor's May revision and the legislature's actions could change state funding assumptions.

The board also discussed operational drivers cited in the presentation, including changes to classified and certificated salaries, and a transfer of redevelopment funds to Fund 40 for capital projects. The presenter said staff will continue to refine the 2025'26 proposed budget as state and local details become final.

The board is required by state education code and district practice to review and certify interim reports; staff recommended and trustees approved a positive certification, indicating the district believes it can meet its financial obligations for the remainder of 2024'25 and the subsequent two fiscal years.