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District projects multi‑year deficit; board certifies 'positive' with planned reductions
Summary
At the March 3 meeting the district presented its second interim budget showing about $12 million in unrestricted deficit spending in years 1–2 and $13 million in year 3 absent reductions; trustees approved the report after staff outlined $5 million in reductions in 2026–27 and an additional $1 million in 2027–28 to remain solvent over a three‑year window.
District finance staff presented the second interim financial report covering actual revenues and expenditures through Jan. 31 and a three‑year projection, and the board approved the report by voice vote.
The presenter (speaker 7) told trustees the district certified a "positive" certification for the three‑year projection because it incorporated planned budget reductions. Without those reductions, the presenter said, unrestricted deficit spending would be about $12 million in the current year and still $12 million in the second projected year, growing to roughly $13 million in year three. To address that gap, staff have incorporated reductions of $5 million in 2026–27 and an additional $1 million in 2027–28.
Presenter explanations included the mechanics of the SACS reporting format, enrollment projections (a net loss of about 50 students per year in out years after a near‑flat current year aided by added TK classes), and revenue adjustments tied to attendance certification and state budget actions. The presenter said some federal mental‑health funds previously expected had been reduced and that the district received about $250,000 back from a mental‑health allocation, not an ongoing restoration of funds.
Board members pressed for advocacy steps. Trustee questions focused on what the district and statewide organizations are doing to close special‑education funding gaps (federal IDEA obligations historically intended to fund 40% of special‑education costs vs. local realization of about 7% in the district), and on seeking greater unrestricted base funding at the state level. District staff said they participate in CASBO and other coalitions and plan advocacy trips to Sacramento and Washington, and noted some governor’s budget proposals could affect projections but remain uncertain until the May revise and the legislature’s final action.
The presenter highlighted restricted vs. unrestricted funds, noting restricted grants (special programs, Title I, specific one‑time allocations) cannot be repurposed for general operations. Trustees and staff discussed the practical limits of using restricted dollars to solve structural funding problems and emphasized the district’s work on attendance recovery to maximize LCFF revenues tied to average daily attendance.
Trustees thanked finance staff and noted that without additional state or federal funding the district’s path to financial stability will require continued careful reductions. The district will bring a budget adoption item back in June incorporating the May revise and the next full fiscal year projection.
The board approved the second interim report and related consent motions by voice vote; no roll‑call tallies were recorded in the public transcript.
