Mt. Diablo Unified studies 2025–26 budget and warns of multi‑year shortfalls

The Mount Diablo Unified School District Board of Education on Oct. 4 held a study session on the district's adopted 2025–26 general fund budget and multi‑year projections, where staff warned that unless the district identifies new revenue or reductions it may not meet the 3% reserve requirement in 2026–27 and 2027–28.

Dr. Clark, a district staff member, opened the session and said the meeting was intended to “build a better understanding of school finance” and to give trustees a safe forum to ask questions. Adrian Vargas of fiscal services and a colleague identified as Gustavo walked trustees through the adopted budget, multi‑year assumptions and the district's restricted and unrestricted revenue and expenditure breakdowns.

Staff said the district's adopted total budget on slide 5 ties to a $515,000,000 figure: approximately $353,200,000 in LCFF revenue on the revenue side, unrestricted expenditures of about $330,610,000 and restricted expenditures of about $208,800,000. Restricted categorical balances were estimated in the presentation at roughly $61,300,000 in the adopted budget, and unaudited restricted resources at year‑end were cited as $69,600,000. Vargas described substantial restricted expenditures for special education, noting a contribution “over 73,000,000 goes to special education to ensure services remain fully staffed and compliant.”

On new and changed state revenue, staff estimated the universal transitional kindergarten (TK) add‑on could provide about $2,700,000 based on an assumed TK ADA rate and the $2,397 per ADA add‑on figure used in the presentation. Staff also said a recently enacted one‑time state block grant arrived on the restricted side of the budget and therefore limits the district's flexibility to use those dollars on ongoing unrestricted needs.

Bargaining and compensation were a central concern. Vargas said adopted assumptions included 1% for two bargaining units (CSEA and Teamsters) and that trustees have an outstanding proposal on the table for other units that would cost the district more if made ongoing. As Vargas put it, “When you give a raise in 1 year and it's ongoing, the impact is so for every dollar that you give in the current year, it's gonna cost you $3 in a multi year.” He also presented a district estimate that a 2.3% ongoing salary proposal on the table would amount to roughly $6,300,000 on the unrestricted side when including related special education contributions; restricted programs would need to absorb about $700,000 to balance ongoing increases in those programs' budgets.

Trustees pressed staff on enrollment and timing: staff said the district uses P1 (first principal attendance reporting) and later P2 to produce funded ADA counts that drive LCFF. Vargas noted the district is verifying October 1 census data and said P1 reporting in December will inform the first interim and adjustments for the second interim. He also showed a scenario in which enrollment or unduplicated pupil declines could reduce LCFF revenue by about $1,500,000 in year one and roughly $2,000,000 in later years if current trends hold.

Staff flagged several other budget risks: proposed federal cuts (a cited hypothetical 26% reduction to Title I would equal about $1,600,000 for the district), rising health‑care and pension costs (STRS and PERS), and potential insurance assessments related to AB 218. Vargas said the district had assumed an 8% increase in health‑care costs in out years and that self‑insurance assessments have climbed in recent cycles (he cited an earlier backcast assessment that moved from roughly $1,000,000 to about $2,500,000 in a subsequent year).

Board members and a public commenter pressed for clarity about pay and retention. Linda Ortega, a public commenter, urged the board to “put real salary offers on the table” so the district can “attract and retain the highly qualified educators our students deserve,” saying many teachers find the Bay Area unaffordable. Trustees asked staff for additional follow‑up data; Vargas and Gustavo said the fiscal team will present updated figures at first interim in December and that the district's budget advisory committee will review the material as well.

The meeting began with a roll call and the board adopted the meeting agenda by a 4–0 vote with one trustee absent; no other formal votes were taken at the study session. Staff repeatedly emphasized that many of the new state funds are restricted/one‑time and therefore would be used to cover one‑time costs (for example, the ERP conversion and Title IX settlement work) rather than ongoing salary commitments. Vargas noted the district is planning to use new COP financing and Measure A resources for some facilities projects tied to that settlement, reducing the need for general‑fund set‑asides for those capital costs.

The session closed with trustees thanking staff for the detailed presentation and noting further work with bargaining teams and the county office of education ahead of the first and second interim reports. The board adjourned the study session at the end of the presentation.