San Ramon Valley Unified board certifies first interim as 'positive' while flagging $15.1M deficit driven by restricted one‑time spending

The San Ramon Valley Unified School District board voted unanimously to self‑certify its 2025–26 First Interim financial report as "positive," a designation staff said means the district can meet its financial obligations this year and for the next two years.

Assistant Superintendent of Business Services Danny Hillman delivered the report, telling trustees the district projects approximately $461 million in combined revenues and a combined deficit spend of about $15.1 million. He said most of the deficit — roughly $14.7 million — is on the restricted side of the budget, meaning it represents one‑time funds carried forward and earmarked by grant or donor rules rather than ongoing general fund commitments.

"The way this is flowing is largely a carryover of restricted funds," Hillman said. "We start the year with a beginning fund balance of roughly $32.7 million and are projecting ending balances that decline across the three‑year projection because a lot of the spending is on restricted, one‑time dollars." He noted the district's unrestricted side is nearly balanced (about a $453,000 deficit projected) while the restricted carryover accounting creates larger headline changes.

Hillman walked trustees through state context cited in the Legislative Analyst Office outlook, including stronger personal income tax receipts that lift the Prop 98 guarantee and the possibility of substantial one‑time funding at the state level. He cautioned, however, that much of any new state money may come with restrictions or be allocated in ways that limit local discretion.

Board members pressed staff on the county office's prior review (which downgraded a previous certification to "qualified" at second interim) and Hillman said timing and assumptions had driven that earlier determination. "At the time they reviewed us last spring, some reductions were not yet finalized; this time our assumptions reflect board‑approved actions," he said.

Hillman also reviewed reserve targets. The district has a statutory minimum economic uncertainty reserve of 3% and a board target of 7% for a strategic reserve; current projections show a roughly 4.1% reserve this year and staff said reaching the 7% target will require additional steps.

Trustees voted 4–0 to accept the First Interim Report and self‑certify the district's position as "positive." Hillman said the district will submit the report to the county office and monitor the governor's January budget proposal and the March second interim report for further changes.