By Matthew Rodriguez

Pasadena Weekly Deputy Editor

In the “State of Schools” address, Pasadena School Board President Scott Phelps said the district will resume full in-person learning for the 2021-2022 school year.

He added the financial status is “good” for the immediate future.

“The financial state of PUSD is good for the immediate future,” Phelps said. “There have been positive developments in this area in the last year.”

While the district has struggled with finances in the past, Phelps said the district has a “positive certification” standing for at least the next two years, allowing the district to improve its infrastructure in preparation for the first full year of in-person learning since 2019.

“The district has demonstrated that it could meet its current financial obligations, and that of the next two years, in each of its financial reports since March 2019,” Phelps said. “This is what we call a ‘positive certification.’”

According to Phelps, bond rating agencies and the Los Angeles County Office of Education use this certification to determine the financial health of districts.

The board president chalked up the positive news to the passage of Measure O and surplus funding from the state.

Measure O was passed in 2020 and allows the school district to issue over $516 million of school bonds. Measure O, coupled with the district’s recently upgraded bond rating from Moody’s, allows PUSD to work on projects with less financial burden on the taxpayers.

“What this means is that when the district issues bonds, it will receive a better interest rate, which results in more money for projects and less cost to taxpayers,” Phelps said.

In addition to the bonds, Gov. Gavin Newsom’s state budget proposal dubbed the “California Comeback Plan” has Phelps optimistic for more funds.

Despite a year derailed by the COVID-19 pandemic, the state announced it will have a $75.7 billion budget surplus after originally predicting a deficit of over $50 billion. California is also set to receive $26 billion from federal pandemic aid. The “California Comeback Plan” totals about $100 billion, more than most states’ annual spending.

Newsom has proposed $27 billion of the surplus to benefit K-12 schools. According to Phelps, this money will come in a mixture of ongoing, one-time and targeted program funding. The state will also provide a cost-of-living adjustment (COLA), which increases the district’s ongoing funding per student based on its average daily attendance.

“The COLA will increase our per-student funding by 5.07% which equates to approximately $7.9 million,” Phelps said. “This is welcomed news as it comes on the heels of not receiving any COLA for 2021.”

The district also received millions in COVID-19 relief funds during the 2020 and 2021 school years.

Phelps shared concerns about PUSD’s declining enrollment, as it will affect the amount of funding received in the future. Some funding is determined by the district’s average daily attendance, which is the enrollment multiplied by the attendance rate. Because of the pandemic and the stay-at-home order, the state stopped calculating the ADA for school districts and will continue to do so until the 2022-2023 school year.

While the school district’s ADA declined by about 638 this year, it will not be penalized for it until 2022-2023. Phelps said the projected loss from the 2020-2022 school years will be about 922 ADA, or $8.1 million.

“We have to prepare now for this loss of revenue in 2022-2023,” Phelps said. “Our current fund balance has been bolstered by one-time funds, but once our one-time funds are spent, our operational deficit will become more pronounced and require major budget reductions.”

Phelps said the entire state is seeing a decline in enrollment for K-12 schools and hopes the state will step in to stabilize the school districts going forward.

For the coming school year, Phelps set three fiscal goals: to serve the needs of all students through all available resources, preserve programs and raise employee compensation.

“As we look forward, these fiscal challenges and goals mean we will have tough choices to make,” Phelps said.