SFUSD board receives second‑interim financial report and adopts qualified certification, cautions on out‑year deficits

The San Francisco Unified School District presented its second interim financial report, multi‑year projection and budget balancing plan (often referenced as AB 1,200) to the board before a lengthy public Q&A. Financial Services Officer Jackie Chen summarized the district's position: enrollment growth raised revenue modestly, but recent negotiated salary increases and one‑time accounting shifts reduced the district's ending unrestricted fund balance.

Key figures presented included a $48 million transfer from unrestricted to restricted funds, an estimated $95 million increase related to salary negotiations (spread across years), projected general fund deficit spending of about $88 million overall (including $59 million restricted and $29 million unrestricted), and that the district could meet current‑year obligations only if the board approves and implements the stated budget‑balancing solutions immediately.

Fiscal advisor Elliot Duchan told the board the second interim represents a best‑case scenario and highlighted risks that could widen projected deficits. Duchan recommended accelerating budget‑balancing actions, freezing nonessential hiring, and an aggressive review of contracts and vacancies. He warned that, even if actions occur as planned, the district faces structural deficits in the out years and reliance on one‑time reserves would not be sustainable without additional reductions.

Board members pressed staff on transparency and the evidence that proposed site allocations would still allow schools to meet goals. District leaders said they will publish a school staffing and budget resource guide explaining allocations by student need, encourage school site councils to use inquiry processes, and schedule an earlier study session in May so the public can review proposed site budgets before formal adoption.

Action: The board proceeded with the certification vote as recommended by staff (qualified certification for the district) and asked for continued monitoring and public updates as the budget process continues toward the May study session and June adoption timeline.

What happens next: Schools finalize site budgets and submit inquiries if allocations appear inadequate; staff will follow up on public comments and provide the board with progress updates on vacancy eliminations and other balancing measures ahead of the adopted budget.