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District projects $5.4 million 2026–27 gap after COLA and one-time grants; staff outline risks
Summary
Finance staff told the board the district's proposed 2026–27 budget closes with an estimated $5.4 million shortfall driven by expenses outpacing revenue, reliance on one-time state grants, uncertain COLA carry-forward effects amid declining enrollment, and increased special-education requirements.
District finance staff presented estimated actuals and a proposed 2026–27 budget that incorporates statutory COLA assumptions, one-time state grants and a special-education base increase, but still projects a structural gap if ongoing expenses are not aligned with revenue.
“There is a 1 time student support professional development grant of $6,300,000,” the finance presenter said while explaining revenue components, and added that some of those one-time funds may carry restrictions. Staff noted an increase in interest revenue and one-time reductions due to vacancies, but warned that declining enrollment reduces the realized COLA and that relying on one-time funds to pay ongoing expenses creates fiscal risk. A simplified slide presented in the meeting summarized a projected $5,400,000 shortfall for 2026–27 in the proposed budget.
Finance staff also described the district's multi-year projection scenarios (with and without the EUSD plan that moves unrestricted expenses to restricted accounts) and emphasized monitoring upcoming state actions (the 45-day revise) and special-education maintenance-of-effort requirements that could affect available flexibility.
