After a financial crisis brought state inspectors just a year and a half ago, Cabrillo Unified School District is expecting a healthy financial outlook for this year and beyond.

Chief Business Officer Jesús Contreras brought the latest financial report to the school board last week, explaining that the shift to being funded entirely by property taxes has brought the district into the black in the past and is likely here to stay.

The report comes as Cabrillo is closing its financial books on the 2020-21 school year, using lessons learned to adjust spending for 2021-22. Contreras said that last year’s budget projections didn’t quite hit the mark, with property tax revenue coming in $200,000 short. But the saving grace this year was nearly $2 million in state and federal money to fill in the gaps during the pandemic to give the district a healthy ending balance of $6.7 million.

“That is what keeps us moving forward,” Contreras said. “This is a very healthy closing of the books.”

Still, the district will have to borrow money this year to get it through the months between receiving funding from the state, Contreras said. And by the 2022-23 school year, Cabrillo is projected to be in deficit spending again.

“We have to stay vigilant of our spending habits and really make the best of every dollar we have,” Contreras said.

The La Honda-Pescadero Unified School District went over its books last week too, and also found itself bolstered by state money that came through because it opened to in-person learning during the COVID-19 pandemic. Some of its local revenues, like meal sales, were lower than projected, but so, too, were expenditures because of pandemic-related changes to costs like student transportation, Chief Business Official Erica Hays said.

Cabrillo is also now showing a larger reserve, with just over $1 million in its pocket for rockier years. Superintendent Sean McPhetridge said the district’s improved financial position is what prompted pay increases for teachers passed last year, but he warned about moving too quickly toward spending when the long-term outlook shows more cuts may be needed in the future.

“We were in a really bad place a year and a half ago, and now we’re in a better fiscal position,” McPhetridge said. “But we want to stay there.”

Sarah Wright is the deputy editor for the Review. She reports on unincorporated San Mateo County and local schools. She holds a bachelor’s degree in Foreign Service from Georgetown University and has worked in policy and communications in Washington, D.C.

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