Martinez Unified approves second interim budget amid county's warning to shore up reserves

The Martinez Unified School District Board of Education voted March 9 to approve its 2025-26 second interim financial report after a presentation from district finance staff and public comment raising concerns about cuts.

Andy Cannon, who presented the report, told the board the second-interim projections show $62,250,000 in revenue against $64,230,000 in expenditures and a projected decline in combined beginning balances from about $9,000,000 this year to roughly $5,000,000 by 2027-28. "This second interim projection is ... good. I mean, we are in a healthy spot," Cannon said, while cautioning that the figures do not yet include the board's recently approved 2% salary increase.

Why it matters: the Contra Costa County Office of Education review—read into the record by Superintendent Doctor Patrick—concurred with a positive certification but warned the district "anticipates deficit spending in the current year and two subsequent fiscal years" and "strongly recommend[ed] that the district take decisive action to implement the proposed budget reductions with the explicit goal of increasing reserves." Trustees pressed staff on how raises, cuts and one-time grants affect multi-year projections and whether bond sales or pooled insurance arrangements alter near-term cash flows.

The presentation laid out the key figures trustees discussed: a projected $4 million decline in combined fund balance over three years, an attendance-based ADA assumption adjusted to 95% and a modest increase in LCFF revenue that is partially offset by declining enrollment. Cannon noted that local revenue growth—led by interest, facility rentals and Martinez Education Foundation donations—helped the revenue line, while books and supplies rose when MEF donations were recorded.

Trustees asked for clarification on specific items such as unsold bond proceeds, which Cannon said the district staggers to avoid penalties; workers' compensation rates, which are set by the district's joint-powers authority; and the composition of unrestricted versus restricted reserves. Public commenters reiterated concern that planned reductions could affect employees: Stephanie Wentz of CSEA said, "People's jobs are going away," and asked why cuts appeared to flow into savings rather than services. Jen Fennell read figures from the executive summary showing multi-year shortfalls she characterized as approximately $1.99 million in 2025-26, $990,000 in 2026-27 and $1.05 million in 2027-28.

Next steps: the board approved the second interim report by voice vote; staff will incorporate updated estimated actuals into the June budget adoption (the presentation noted the district's June budget adoption will include estimated actuals and any changes required by the state). Cannon and district staff offered to provide follow-up detail on any line items trustees requested.

The board's approval means the district submitted the second interim as required; the county office letter remains on record urging that the district increase reserves and implement structural solutions to reduce reliance on one-time funds.