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Board certifies second interim despite concern that reserves are eroding
Summary
Trustees certified the district can meet financial obligations for 2025-26 after hearing the second interim: unrestricted ending balance reported at $11.9 million, total expenditures $243.2 million, and multiyear projections show reserves falling in future years, prompting trustees to warn of deficit risks and request follow-up.
The board voted to certify the district's second interim financial report after a staff presentation that summarized revenue, expenditures and multi-year projections.
Staff noted a 2.3% COLA for the year, projected ADA of 10,026.1, a modest increase in unduplicated pupil count, and several one-time state funds that support the current certification. Total district expenditures were presented as $243.2 million and unrestricted ending fund balance as $11.9 million. The presenter explained that those figures reflect spending down carryover, routine obligations, and a planned contribution from Fund 14.
Several trustees expressed concern about reserves and potential future declines: one trustee described $11.9 million as a small cushion on a $250 million budget and warned that dropping to 3% reserves would require difficult decisions. Staff explained the district would prioritize retaining the 3% reserve and could reduce a planned Fund 14 contribution if necessary.
After discussion, a motion by member Valadao, seconded by member Catuso, to approve and certify that the district will be able to meet its financial obligations carried unanimously by voice/roll-call vote.
Trustees asked for continued monitoring of reserves, clarification of multi-year assumptions and follow-up reporting as budget development continues. No additional budget actions were taken at this meeting beyond certification.
