District unveils fiscal stabilization plan as reserves are projected to decline

Director of Fiscal Services David Norton and the district's business leadership presented a proposed 2025-26 budget and a companion fiscal stabilization plan the county had requested. Norton summarized key assumptions: declining enrollment, ongoing pension cost increases, step-and-column salary growth, and a projected drawdown of unrestricted reserves over the coming years. He said the proposed budget relies on using allowable one-time state funds (learning-recovery and AMIM) to offset general-fund costs, but that the district still must plan for ongoing reductions.

The stabilization plan included several strategies: a review and reduction of contractor and consultant costs (projected savings $3.5M), a hiring freeze for unrestricted positions with cabinet exceptions, eliminating vacant nonessential positions and relying on attrition/early-retirement incentives where possible (projected savings ~$9.14M), and aligning staffing to enrollment. Staff noted the county office required a plan because the district's 2nd interim snapshot showed a reserve decline that exceeded LACOE's threshold for fiscal-planning oversight, even while the district retained a positive certification. "The primary goal of the fiscal stabilization plan is to eliminate the structural deficit while maintaining adequate reserves and safeguarding student services," the presentation said.

Board members asked for worst-case and scenario details, and staff said the version presented is a proactive, first-draft framework that will be refined with stakeholder input and a budget advisory committee through the fall. The plan will return to the board for adoption next week as a first reading with final adjustments expected as state budget and enrollment data firm up.