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Poway Unified certifies First Interim as "positive" while warning reserves may dip near state threshold
Summary
Trustees certified a positive First Interim in a 6–0 vote, but staff projected carryover-driven expenditure increases and warned unrestricted reserves could shrink to low single digits by 2026–27 without further reductions.
Poway Unified School District trustees voted Dec. 17 to certify the district’s First Interim financial report as "positive," even as finance staff warned the board that multi‑year projections show tightening reserves and continued work on budget reductions will be necessary.
"First Interim is really your full first budget of the year," Associate Superintendent/Finance Greg Magnuson told trustees during a detailed presentation of revenues, expenditures and multiyear projections. He said combined general fund revenues increased by roughly $8 million to about $514 million, while total expenditures rose to about $573 million — an increase driven largely by carryover restricted and unrestricted funds from prior years.
Staff detailed about $31.5 million in additional expenditures recognized in the current year, the majority classified as carryovers: roughly $19 million in restricted carryovers and about $6.8 million in unrestricted carryovers that now must be expensed. Magnitude was driven by multi‑year block grants, program carryovers and committed purchase orders that were not delivered in the prior fiscal year.
Magnuson also outlined the district’s multi‑year assumptions and projections. Under the staff model, the district’s unrestricted ending reserve could decline toward the low single digits by 2026–27 (staff cited a projected reserve near 3.1 percent in worksheet projections circulated to trustees), a level that approaches the 2 percent threshold at which county and state review/oversight steps increase.
Board members repeatedly pressed for more granular, up‑front budget impact reporting as the district brings contracts and PO ratifications forward. Trustee David Chang asked that future consent and procurement reports include the budget category, remaining balance after each proposed purchase, and an explicit notation when items are budgeted versus requiring a budget adjustment.
Despite the concerns, the board approved the First Interim certification and a resolution revising the 2024–25 general fund combined budget (Resolution No. 441‑2244) by roll call. Staff said they will continue work on the second year of budget reductions and bring refined options to the board in early 2025.
What’s next: staff will return with more detailed budget‑impact reporting, timelines for planned reductions, and updates to the multi‑year forecast as state budget actions become clearer.
