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District certifies second interim budget as "positive" while flagging $1.5 million ongoing deficit
Summary
The Rescue Union Elementary board approved a second interim budget certified as "positive," but finance staff warned that after stripping one-time items the district faces an estimated $1.5 million structural deficit and will monitor reserves and negotiations.
Lisa Donaldson, a district staff member who presented the budget, told the board the district's second interim report must certify whether it can meet financial obligations and concluded the district's certification is "positive." "Spoiler alert. We're positive," Donaldson said during the presentation.
The board's decision to approve the second interim budget does not erase longer-term concerns, Donaldson said. She summarized revenue and expenditure changes since the first interim: about $200,000 more revenue overall, a slight decline in LCFF (local control funding formula) due to average daily attendance tracking, and an estimated $226,000 increase in expenditures largely driven by salaries and services. Donaldson told trustees that LCFF represents nearly 80% of district revenues, making attendance and enrollment assumptions critical to the district's outlook.
Donaldson said the district has received about $1.7 million in one-time discretionary funds this year and is not counting those dollars as ongoing; when one-time items are removed from the calculation the district's true ongoing deficit is about $1.5 million. She also noted that employer pension costs (STRS and PERS) have grown substantially in recent years and remain a pressure on future budgets.
The presentation included projections for multi‑year assumptions, a note that some staffing placeholders remain until enrollment is confirmed, and the caveat that state COLA and final one-time funding figures will affect outcomes. Donaldson said reserves are currently at about 10% total, with unrestricted reserves estimated to be about 11% by the third projected year under present assumptions.
Trustees asked whether the district could forecast the 2028–29 position; Donaldson said she had not completed that projection and that it would depend on COLA, enrollment and whether the $1.7 million estimate materializes. After discussion, a trustee moved to approve the second interim report; the board voted to adopt the report, with one trustee recorded as opposing.
The district will return in June with a revised May‑revise and final budget and further multi‑year updates as talks with bargaining units and state actions become clearer.
