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Pacifica School District projections show multiyear deficits; staff recommends "qualified" certification
Summary
The district's financial consultant presented a second-interim budget showing ongoing deficit spending and recommended a "qualified" certification because about $375,000 (FY26-27) and $450,000 (FY27-28) in reductions remain unidentified. The board heard extensive public comment and recorded a motion to advance the certification; the transcript does not record a final vote.
Dusty, the district's financial consultant, told the Pacifica School District board on March 11 that updated revenue and expense projections leave the district running a multiyear structural deficit and recommended the board self-certify the second-interim report as "qualified." "I'm recommending that we go with qualified," Dusty said during the presentation, noting the district still needs to identify $375,000 in additional reductions for 2026-27 and $450,000 for 2027-28 to maintain a 3% reserve.
The presentation explained the drivers behind the shortfall: a lower-than-expected cost-of-living adjustment in the governor's January budget, one-time grants that expire, higher contract and legal costs tied to special-education placements and settlements, and lingering enrollment uncertainty that reduces LCFF revenue. Dusty said the district is projecting continued deficit spending even after already-adopted reductions and one-time funding adjustments.
Dusty detailed next steps if the board approves the qualified certification: the district will file the certification with the county superintendent, produce a third-interim report in May with actuals through April 30, and then propose an adopted budget in June. "Because we are qualified, we will do a third interim," Dusty said. The consultant also listed specific balance-sheet effects the board should consider, including the possibility that parcel-tax revenue cannot be counted beyond next year unless renewed.
Board and public members pressed for detail and alternatives. Trustees asked about parcel-tax revenue (Dusty said it is "just under $1,000,000" annually and could not be assumed past next year if not renewed) and options to recover ADA via independent study or Saturday-school programs. Members of the public, including teachers and union representatives, urged the board to reconsider cuts that would affect student-facing services.
A motion to approve the 2025-26 second interim financial report with a qualified certification and to authorize its filing with the county superintendent of schools was made and seconded at the meeting; the transcript records the motion and second but does not include the vote result. The board scheduled follow-up briefings and warned the district could face heightened county oversight while the qualified status remains in effect.
What happens next: staff will prepare the third-interim report with updated actuals and any newly identified reductions and return to the board before the adopted-budget process in June.
