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Orange Unified budget: district keeps reserves, eyes May Revision funding to expand services
Summary
Finance staff presented estimated 2025–26 actuals and the proposed 2026–27 budget, emphasizing a people-first approach, student-centered reclassification of expenditures to school sites, a new enrollment-decline stabilization reserve, and sensitivity to the governor's May Revision (possible extra COLA and one-time block grants).
District finance leaders told the board the proposed 2026–27 budget is balanced under current state estimates and is built around three principles: invest in staff compensation and supports, shift more discretionary dollars to schools (student‑centered budgeting), and preserve fiscal reserves to guard against enrollment declines.
Interim business officer Yuri Calderon reviewed the estimated 2025–26 actuals and the proposed general-fund outlook: the district projects an unrestricted general fund balance of roughly $46 million at year-end after planned transfers, including a one‑time transfer of district carryover into capital and stabilization funds. Among the new reserve tools is a proposed $12 million Enrollment Decline Stabilization fund (Fund 17) designed to buffer schools and staffing if enrollment drops further.
Calderon explained the district is preparing the budget amid two competing pressures: rising cost indexes (COLA) and continued enrollment declines that reduce per‑pupil revenue. He flagged the governor's May Revision, which — if finalized in the Legislature — could add a 1.44 percentage‑point "super COLA," a one‑time student‑support block grant, and higher special‑education funding that would free general‑fund dollars. The district's budget team said it would model those scenarios before final adoption and recommended a positive certification for 2026–27 at the June meeting.
Trustees asked about special‑education costs, the district's retiree benefits trust (which the board has been funding to prefund OPEB obligations), and how the administration will use one‑time May Revision money if it arrives. Finance staff said they will prioritize one‑time investments for non‑recurring needs (facility and implementation supports, consultants) and maintain structural reserves for long‑term stability.
What's next: the board received the public hearing on the budget; staff will update budget documents to reflect the May Revision and return to the board for final adoption in June.
