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Board certifies second interim positive but staff warn enrollment decline and state cash‑flow deferrals could strain reserves
Summary
Business services presented the second interim financial report showing updated COLA projections, flat enrollment assumptions, and improved unduplicated pupil percentage; staff certified a positive interim but cautioned that a 200‑student decline and possible state payment deferrals for June payroll could require borrowing or reserve drawdown.
The district's business office presented its second interim financial report — expenditures through Jan. 31 — and recommended a 'positive' certification while outlining risks tied to enrollment and potential state cash‑flow decisions.
Staff said the district projects $42 million in state LCFF funding and about $60 million in total revenues but is tracking a decline of roughly 200–215 students for next year. That enrollment drop will reduce ongoing revenue and could materially affect reserve projections. Business staff said the district's unrestricted reserve was projected in the mid‑teens percentage range but that potential payroll deferrals by the state for June could require borrowing or reserve use to cover two months of payroll.
Officials explained that the governor's budget and Legislative Analyst Office estimates differ, and that COLA projections for the 2026–27 outlook decreased compared with earlier projections, which lowers revenue forecasts. Staff emphasized the AB 1200 process will reflect negotiated raises and that the adopted interim does not yet include pending negotiation outcomes.
Board members asked about the percentage of reserves required to cover a deferral; staff indicated two months of payroll would consume roughly 9–10% of the budget and that without additional cash or borrowing the district would need to plan for contingencies.
The board moved and unanimously approved the second interim certification (item 242.697). Staff will return to the board with updated projections in May and during the June budget adoption process.
