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Board hears budget outlook showing modest deficit and reserve pressure for 2025–26
Summary
Finance staff presented a proposed 2025–26 budget with projected revenues of about $252 million and expenditures of about $254 million, a projected draw on reserves and multiyear projections that would put the district below its 8% reserve policy without corrective actions.
District finance staff presented the Sequoia Union High School District proposed budget for 2025–26 to the board on June 4, warning that multiyear projections showed declining reserves below the board’s 8% policy target if current assumptions hold.
Presenters said the proposed budget projects roughly $252 million in revenues and $254 million in expenditures for 2025–26, a projected deficit of about $1.2 million and an estimated ending fund balance near $34 million. Staff noted the governor’s May revise and a projected statutory COLA of 2.3% as important state inputs that have reduced some one‑time funding; they also flagged a $12 billion projected state shortfall in the May revise that prompted adjustments to categorical and one‑time funding assumptions.
Finance staff described property tax growth projected at 4.37% for the coming year — below historical trends — and said some charter school transfers and declining enrollments at East Palo Alto Academy (enrollment ≈ 278) will require continued general‑fund support; staff estimated EPAA may need roughly $2 million in general‑fund contributions to maintain current services under the projection.
Trustees asked whether the multiyear projection violates the district policy on reserves (8%) and whether the board should change policy or make near‑term budget adjustments. Staff responded that the projection did fall under the policy threshold in later years of the multiyear projection and that September’s closing of the books and the first interim report will be key decision points. Trustees also discussed possible “quick wins” and the timing of hard decisions; staff recommended post‑September analysis before making structural changes.
Several resolutions with budget impacts were taken later in the meeting (temporary interfund loan, fiscal transfers), and the board approved those items by roll call. Finance staff said additional adjustments will be brought forward as the enacted state budget and updated property‑tax figures are finalized.
