Saddleback Valley USD approves 2025–26 budget as officials warn of long‑term structural shortfall

The Saddleback Valley Unified School District Board of Education voted unanimously to adopt the district’s 2025–26 budget and the Local Control and Accountability Plan after a presentation showing the district faces ongoing structural pressures from declining enrollment and lower average daily attendance (ADA).

Assistant Superintendent for Business Services Robert Craven and CFO Christina Michelle told the board the district’s beginning fund balance is $67.8 million; revenues for 2025–26 are projected at about $303 million and expenditures at $304.7 million, producing a modest deficit spend of $1.3 million in that year and larger projected shortfalls in later years without additional structural changes. They said staff used a 2.3% COLA assumption, noted STRS and PERS contribution rates, and described the decision to use a one‑time RDA reimbursement and a supplemental retirement plan to balance the near‑term budget.

Craven said the district’s three‑year ADA funding method, combined with continuing enrollment declines, drives revenue losses even as COLA increases funding. He warned that, looking farther ahead, the multiyear projection shows a growing gap that staff have closed in the short term with one‑time measures but that “there are no more creative or easy answers to the budget shortfall we face.” The presentation cited several drivers, including special education costs, routine restricted maintenance, and additional fees tied to past self‑insured liability coverage.

Board members pressed staff for details on staffing reductions, the $21 million increase in expenditures in 2026–27 shown in the projection, and the demographer’s assumptions. Staff said the district uses a professional demographer with long‑term housing and birth‑rate inputs and offered to return with deeper detail on specific expenditure drivers such as textbook adoptions and technology.

Votes at a glance

- Local Control and Accountability Plan (2025–26): Approved unanimously. - 2025–26 Original Budget: Adopted unanimously. - Received California School Employees Association (CSEA) proposal to the district: Accepted as received, unanimous (receipt of proposals does not approve contract terms). - Received district proposal to CSEA: Accepted as received, unanimous. - Superintendent’s contract amendment No. 12 (term 07/01/2025–06/30/2028; 2.3% salary increase; annual salary $334,331 plus longevity and doctoral stipend and benefits): Approved unanimously.

What it means

District staff said the near‑term budget is balanced largely through one‑time measures and reduced spending, but that long‑term funding gaps remain without either revenue changes (for example, state law changes affecting charter pass‑through counts) or structural expense reductions. Staff recommended continued monitoring, a return in August if the state budget changes materially, and a December first‑interim presentation to revisit assumptions.

Next steps

Staff will monitor state budget action through June, return with any required 45‑day revisions if state allocations change, finalize 2024–25 actuals in September, and present a first interim budget in December. Board members and staff also discussed advocacy options related to state treatment of charter school pass‑through funding.