Cabrillo USD Ends Year With Shrinking Reserves as Fund 40 Runs Dry

The Cabrillo Unified School District board approved year-end financials showing the district spent within fractions of its budget — but the one-time fund that masked structural deficits is now nearly gone. In a packed September session, the board also locked in a contractor for the bond-funded Half Moon Bay High School rebuild, endorsed a statewide tax measure, and heard from its superintendent about expanding preschool to the coast side of town.

• District finishes 2025-26 with $5.88M in combined reserves, but Fund 40 is down to $80K — eliminating the cushion that papered over deficit spending

• Rodan Builders selected as general contractor for multi-phase high school rebuild through a $60K pre-construction services award

• Board unanimously endorses Proposition 3 to make permanent expiring income tax rates that fund schools and healthcare

• Superintendent floats preschool expansion to El Granada Elementary as Los Listos nears capacity with 43 of 45 slots filled

• Two contract agencies hired to fill vacant special education positions at elementary and high school sites, with caseloads near legal limits

• $290,600 approved for electric bus charging infrastructure, roughly half covered by a state grant

The Budget Wake-Up Call: Fund 40 Is Gone

The basics: The board unanimously approved the district's 2025-26 unaudited actuals — the final year-end financial snapshot before an independent audit. Unrestricted revenues came in at approximately $38.2M, within 1% of projections, and unrestricted expenditures landed at $31.15M, just $25,000 off the estimate.

Why it matters: Beneath the on-target toplines, the district's fiscal cushion has thinned dramatically. Fund 40 — a one-time reserve that provided a $3.5M transfer in a prior year — is down to $80,000. Combined reserves (general fund plus Fund 17) total $5.88M entering 2026-27, roughly six weeks of payroll.

Where things stand: "A big component of this year's budget was Fund 40. Without Fund 40, we would have been in a much different situation," said Vice President Peter Cerneka. "Now Fund 40 has $80,000 left. So we basically exhausted that fund. So in some ways it's a wake-up call."

Property tax revenue — the dominant funding source for this community-funded district — grew 2.32% year-over-year ($803,000), but came in $51,000 below the P2 estimate and below the 3% growth assumption embedded in multi-year projections. A $190,000 fair market value adjustment was reclassified from current-year revenue to an audit adjustment, further complicating the picture.

Jennifer Marsh, the district's Chief Business Officer, outlined the path forward:

"An important part of our work this year will also be developing a plan to address ongoing deficit spending. While our reserves provide an important safety net, using reserves to support ongoing expenditures is not sustainable over the long term."

Staff will focus on position control, maximizing restricted fund utilization, and ensuring $2.1M in one-time funds is spent only on one-time purposes.

The other side: Superintendent Dr. Ramon Miramontes pushed back against the instinct to project revenue too conservatively, warning it could harm programs.

"I do not want to get into a habit where the board says, let's go more conservative, and then we plan with a more conservative number, and then we shortcut kids, staff members," he said.

He urged the district to use professional property tax projection services rather than gut-level estimates.

Board Member Breanna Lafontaine acknowledged the ongoing structural gap but expressed optimism:

"I am hopeful under your guidance that we will continue to be in good shape and work towards positive spending."

Board Member Mary Beth Alexander noted the $5.88M reserve is equivalent to about six weeks of payroll.

What's next: The Budget Advisory Committee meets Oct. 6. An independent audit is expected in November or December, with the first interim financial report coming to the board in December.

Decisions: Approved 5-0.

Rodan Builders Tapped for High School Rebuild

Why it matters: While the dollar amount on the table was just $60,000 for pre-construction services, board members recognized the vote for what it was — effectively choosing the general contractor who will execute the bond-funded, multi-phase rebuild of Half Moon Bay High School.

Where things stand: Rodan Builders was selected through a competitive best-value process in which four pre-qualified firms submitted proposals and were interviewed. The lease-leaseback delivery method — common for school construction — allows the district to negotiate guaranteed maximum prices before authorizing each construction phase.

Vice President Peter Cerneka made the stakes explicit:

"My read on this vote is that although this vote is for a relatively small amount of money, tonight's vote, in effect, is a vote to select the contractor for the duration of the high school project."

Drew Gamet, Bond Program Fiscal Project Director for the district, confirmed flexibility exists. "If it comes to it, we will walk away," he said, referencing exit provisions in the agreement. The $60,000 covers pre-construction services across three phases:

• Phase 1 (temporary housing, approximately $10,000)

• Phase 2 (pool and building G, $35,000-$45,000)

• Phase 3 (building A, to be added by amendment)

Guaranteed maximum prices for actual construction will return to the board for separate approval.

Cerneka also pressed on construction audit oversight. Drew outlined the Citizens Bond Oversight Committee and independent audit processes required by general obligation bond law, and noted two vacancies on the oversight committee — a senior citizens representative and a taxpayer association representative.

Decisions: Resolution 12-2026 adopted 5-0 by roll call.

Preschool Near Capacity; Superintendent Eyes El Granada Expansion

Why it matters: The district's only state-funded preschool program is running near its 45-student cap, and families on the south side of town lost access when a previous El Granada program closed.

Where things stand: Graciela Krabbenschmidt, the early learning educator supervisor, presented the Los Listos Preschool program, which is contracted with the California State Preschool Program (CSPP) for 45 part-day spaces. The program currently serves 43 students — 29 in the morning session and 14 in wraparound care — using an 80/20 inclusion model: 80% general education students, 20% students with IEPs. Sign language is used as a communication tool for younger enrollees. A separate Special Day Class preschool on the same Hatch Elementary campus serves four students with greater needs.

The waitlist is exhausted. When Vice President Peter Cerneka asked what was holding back growth, space and resources were the answer.

Superintendent Dr. Ramon Miramontes seized the moment to propose a solution:

"At El Granada, in that community, there used to be a preschool program there and it shut down. We've got two portables that were just dropped there for the construction and they have restrooms in them."

He indicated the state would welcome additional preschool capacity.

Board President Lizet Cortes raised a different concern — what happens to engaged preschool families when their children move to elementary school.

"I think it's so essential that there is a transition plan in place, because these parents are feeling very welcome, very supported, and we need to keep that momentum."

Board Endorses Prop 3 to Preserve School Funding

At the request of CUTA President John Carey, the board adopted Resolution 13-2026 supporting Proposition 3, which would make permanent existing voter-approved income tax rates on higher-income earners currently set to expire in 2031. The revenue funds public schools, community colleges, healthcare, and other state programs.

Staff reminded the board that Board Policy 1160 prohibits them from urging voters to vote a particular way. Board Member Breanna Lafontaine expressed emphatic support for the measure.

Decisions: Adopted 5-0 by roll call.

Two Special Ed Vacancies Filled by Contract

Why it matters: With caseloads at 25-26 students — approaching the 28-student legal maximum — and no district substitutes holding special education credentials, two vacant resource specialist positions represented urgent compliance risks.

The board approved contracts with Emmett Learning LLC (Item 3B) to fill a split position at Hatch and El Granada elementaries that has been vacant all year, and with Every Special Child LLC (Item 3C) to cover an unexpected opening at Half Moon Bay High School. Both include 30-day cancellation clauses if permanent hires are found.

Superintendent Dr. Ramon Miramontes described the contracts as likely one-year arrangements, praising his new HR team's first-year recruitment:

"I honestly believe we did a great job. This, our HR group, first year hiring. They're all new in the HR department. They did a great job."

The district has already reduced its contracted speech-language pathologists from five to three through direct hiring.

Decisions: Both approved 5-0.

Teachers Union Flags Healthcare Costs, Whooping Cough

CUTA President John Carey thanked the board for the Prop 3 endorsement and reported that under the current three-year contract, salary and benefits are not being renegotiated but leave of absence and transfer policies are open topics. He encouraged board members to visit school sites and check in with teachers about staffing decisions.

Carey flagged a more pressing financial concern:

"CUTA would also like to express concerns. We've gone through a little bit of a healthcare change with the healthcare consortium. And we're just concerned about long-term effects on district spending, cost to teachers and staff."

Vice President Peter Cerneka later quantified the issue during board reports, noting "healthcare costs are projected to go up 10 to 15% next year."

Carey also reported a whooping cough exposure at the high school and pledged to work with staff to keep everyone healthy.

Minor Items

• $290,600 approved for electric bus charging equipment and services, including commissioning, warranty, maintenance, and five years of Fleet Box software; a $150,000 ZESP grant covers roughly half. (Approved 5-0)

• Resolution 11-2026 (GANN Limit) adopted as a routine annual state requirement; school districts are effectively exempt from the spending cap. (Approved 5-0 by roll call)

• Consent agenda approved 5-0 by roll call.

• Spotlight of the Coastside Way recognized Elizabeth (parent leader) and Edgar (paraprofessional) for contributions to the Los Listos Preschool program.

• Student Board Member Jamie previewed Half Moon Bay High School homecoming week (Oct. 8-10) and gave a personal shout-out to athletic trainer Crystal Dos Santos for outstanding student care.

• Two community members praised school leadership during public comment. Christina Baker and Lindsay Diggs highlighted Cunha Intermediate Principal Victor Guzman for personally supporting students, and praised the high school's special education department.

• Board Member Lafontaine reported that AB 1204 — which would have adjusted LCFF funding for high-cost areas — died in the second house of the state Legislature.

• A CUSD family lost their home to fire; Lafontaine encouraged GoFundMe donations.

Looking Ahead

Vice President Peter Cerneka announced an Oct. 22 facilities master plan study session focused on elementary school field improvements and urged the public to weigh in. "Now is the time to make your voices heard. If you have opinions or thoughts on what should be done at the fields at any of the elementary schools, reach out to us, reach out to the staff, reach out to the site leadership," he said. The Budget Advisory Committee meets Oct. 6, and Principal for a Day is scheduled for Oct. 6 as well.