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PAUSD presents second interim budget; staff forecast positive certification and highlight MOU costs
Summary
The district presented its second interim financial report, projecting a positive certification, an estimated $2.6M revenue increase, a $1.6M expenditure increase, and highlighted multi‑year impacts of benefits and a track‑guard MOU with the city.
District finance staff presented the second interim budget update for 2025–26 on March 17 and asked the board to certify that the district can meet its financial obligations through the current year and the next two years.
The presenter summarized revenue and expenditure changes, reporting an estimated $2.6 million increase in revenue and approximately $1.6 million in additional expenditures that together show a projected $2.0 million increase to the district’s ending fund balance. The presentation listed drivers including AV (assessed valuation) growth, federal and state grant adjustments, local revenues and restricted donations. The presenter noted that $1.7 million of local revenue was tied to specific parent or donor gifts and therefore not available for ongoing salary increases.
On compensation, staff said the district’s multi‑year projection reflects proposed ongoing salary increases and the potential fiscal impact of continuing the district’s 90/10 medical cost‑sharing commitment to protect employees in 2026. The presenter explained that benefits and statutory employer contributions (STRS/CalPERS) expand the total cost beyond base salary adjustments and cited a $27.2 million total impact figure across multi‑year projections tied largely to benefits assumptions.
Staff also described a roughly $800,000 total MOU cost to share staffing of track watch/crossing‑guard services with the City of Palo Alto (a 50% cost share for the district’s portion through February 2027), which affects both 2025–26 and 2026–27 results. Trustees asked questions about assumptions, benefits calculations, and how bond and capital funds are accounted for separately from the general fund.
The board voted to certify the second interim (motion made and seconded; board votes recorded in the public record). Staff said they will return with adopted‑budget materials in June and continued LCAP stakeholder engagement.
Next steps: staff will finalize the adopted budget schedule (presentation in June) and return with revised committed‑funds resolution items to reflect board guidance.
