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South Pasadena Unified board unanimously certifies positive second interim; audit approved
Summary
The board voted unanimously to approve the 24–25 audit with two minor findings and declared a positive second interim budget certification, while staff warned the district relies on expiring one‑time state funds and projected reserves tighten to about 3% by 2027–28.
The South Pasadena Unified School District Board of Education voted unanimously on March 11 to approve the district's 2024'25 audit and to declare a positive certification for the district's second interim budget report.
Superintendent David Baxter and business services staff presented the audit and the second interim as separate agenda items. Business services reported the 24'25 audit included two minor findings: one nonfinancial finding and one incorrect object code on an account string. "When we have a perfectly clean audit and they have 0 findings, I always mention it," the business services presenter said, then added staff was nonetheless proud of the largely clean report.
In the second interim presentation, staff described the document as a midyear check-in that updates projections of spending, revenue and reserves. The presenter emphasized that recent state funding patterns have included more one-time funds and fewer ongoing dollars, and noted projected COLA (cost-of-living adjustment) trends: the state'provided COLA projection for 25'26 has shifted from an earlier 3.94% estimate to roughly 2.3%, with 26'27 at about 0.88%. The presenter said CalSTRS rates have stabilized while CalPERS contributions are still rising, and the district anticipates flat enrollment and unduplicated pupil percentage in the 18'19% range.
Those assumptions produce a projected reserve trajectory of about 7% at the end of the current year, roughly 5% at the end of 2026'27, and just above the 3% minimum required reserve at the end of 2027'28. The presenter warned that the district is using one-time funds to cover structural shortfalls and that, should one-time funds expire or not be replaced, the district may face difficult choices in the next one to two years. "If we don't get ongoing increases or potentially more one-time to fill those holes, then we're going to have to make some serious decisions," the presenter said.
Board members thanked staff and acknowledged the district's reliance on community support and local revenue sources. One member said it was notable that, while many districts are announcing layoffs, "we are very proud that we are not laying off" in this district at present. Several trustees praised the work of cabinet and staff for managing a close-to-balanced budget.
The board then voted to approve the audit and to adopt the positive certification on the second interim.
What happens next: staff will continue refining projections and will return with the June budget, which will extend the multi-year projection window. The board also noted that outcomes could change if the governor or state legislature provides additional one-time funding or if a local bond measure delivers general fund relief.
