Fullerton board certifies 2nd interim report; staff warns of multi‑year deficits and limited unassigned funds

At the March 10 meeting the board reviewed the district's 2nd interim financial report covering July 1 through Jan. 31, 2026 and voted to certify the report as "positive." The presentation summarized revenue and expenditure changes since the 1st interim and laid out a three‑year projection.

The budget presenter said unrestricted revenue declined by roughly $200,000 and unrestricted expenditures increased by about $230,000 from the 1st interim, producing a projected downward change in the ending balance of about $430,000. The presenter told trustees the district must legally hold a 3% reserve for economic uncertainties (about $6.44 million) and that of the total ending balance only roughly $2.37 million remains unassigned and available for one‑time spending.

Staff explained components: shifts between restricted and unrestricted funds (for example, E‑Rate and facility rental accounting), higher employee benefits, unfilled positions reducing some salary totals, and capital and services transfers. The presentation also flagged pension (STRS/PERS) employer rates and enrollment declines (projected district enrollment down roughly 300 students next year) as drivers of future pressure on the general fund.

Projected deficit spending was shown for the coming years: staff projected a moderate deficit next year (about $2.12 million) and a larger projected deficit in the third year out (about $3.56 million) under current assumptions; staff noted forthcoming one‑time state funds could mitigate some near‑term gaps.

After questions about assigned versus committed funds, trustees voted to approve the 2nd interim report with a positive certification and directed staff to continue monitoring multiyear projections and return with the May revise and the budget package for June board action.