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PYLUSD projects multi‑million dollar deficits but issues positive fiscal certification
Summary
Chief Business Officer Dr. John Papalardo presented the district's second interim report showing projected deficits over the near term (roughly $11 million this year), declining enrollment and rising benefit costs, and recommended a positive certification while urging reductions and close monitoring.
Placentia‑Yorba Linda Unified School District officials on March 10 presented a second interim financial report that projects multi‑million dollar deficits over the next three years even as the district issued a positive fiscal certification.
Chief Business Officer Dr. John Papalardo told trustees the district currently projects roughly $250 million in general fund revenues and a little over $260 million in expenses for the 2025–26 year, producing a projected deficit of about $11 million for the year. The multi‑year outlook showed deficits continuing into 2027–28 without planned reductions or new ongoing revenue.
Pap alardo said enrollment declines and increased benefit costs are principal drivers: health and welfare premiums rose roughly 7.1% this year and are projected at 8% in coming years, while statutory cost‑of‑living adjustments are modest. He noted restricted one‑time block grants at the state level could bring flexibility but are not yet budgeted. "We are going to report a positive certification," Papalardo said, while also warning the board that reductions will likely be necessary to maintain reserves.
Trustees asked how sensitive revenues are to attendance and were told a 1% change in attendance equals roughly $2.8 million in state funding for the district. Papalardo outlined next steps: monitor the May revision to the governor's budget, return with updates in June, and proceed with budget adoption and revisions as required by state timelines.
What happens next: Administration will continue to refine projections after the May revise, present recommended reductions or options as necessary, and adopt a budget in June with follow‑up reporting to the board.
