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Fountain Valley trustees hear midyear budget update, staff report positive position but warn of state uncertainty
Summary
At its March 12 meeting, the Fountain Valley School District board received a second interim budget update from the district finance team reporting a healthier midyear position driven by higher enrollment and one‑time grants, while staff cautioned about state funding uncertainty including a proposed $5.6 billion Prop 98 withholding and a lower projected COLA.
At its March 12 meeting, the Fountain Valley School District board of trustees received the district’s second interim financial report, with Chief Business Officer Isidro Guggenhera and Director of Fiscal Services Puja Shah telling trustees the district is in a healthier midyear position but faces state funding uncertainty.
“Happy to report that, just like that first interim, we have a healthier district budget,” Isidro Guggenhera said, describing higher enrollment — notably from the full implementation of transitional kindergarten (TK) — and stronger average daily attendance (ADA) as primary drivers of improved revenue. He added that salaries and benefits remain the district’s largest expense.
Puja Shah said the presentation covered both unrestricted and restricted funds and noted that the district has been drawing down one‑time block grants on a planned schedule. “This budget does give us an opportunity to reassess any revenue or expenditure assumptions,” Shah said, noting recent increases in state apportionments for student support and the first allocation of learning recovery emergency funds.
Staff told trustees the district’s enrollment increase and the TK add‑on improved Local Control Funding Formula (LCFF) revenue this year, but they cautioned the gains may not be sustained. Presenters and trustees flagged a state proposal to withhold roughly $5.6 billion tied to Prop 98 — an amount the district’s staff said equates to about $900 per student under some analyses — and noted the California Department of Finance’s February inflation data and a downward revision in the projected statutory COLA for 2026–27.
Guggenhera and Shah walked trustees through the district’s multiyear projections and the components of the ending fund balance, including non‑spendable inventory, restricted funds, committed and assigned funds, and a reserve for economic uncertainty (the board’s current target is the statutory 3 percent benchmark). Trustees asked whether the district should consider a higher reserve policy; staff said that topic could be studied and returned for board consideration.
Trustees and staff also discussed the timing and expiry of one‑time grants the district has used to support programs through 2028–29 and the need to align future spending if those funds are not renewed.
The presentation concluded with staff saying the district can self‑certify a positive second interim if the board is comfortable with the assumptions, and that updated projections will be presented again after the governor's May Revision and the county’s funding review.
What’s next: staff will continue monitoring ADA, state budget actions and federal program stability and expect to return with revised numbers after the May budget actions.
(Reporting based on the second interim presentation to the Fountain Valley School District board, March 12, 2026.)
