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Vallejo board approves EPA spending plan and unaudited actuals as officials warn structural deficit remains
Summary
Business services presented the district's 2024-25 unaudited actuals showing a $25.6 million operating deficit and an ending fund balance of $52.2 million (including $30 million restricted); the board approved the Educational Protection Account spending plan (~$30 million) and adopted Gann limit calculations as compliance items. Staff said fiscal stabilization work continues to avoid cash exhaustion.
Business services staff presented three fiscal items: the Educational Protection Account (EPA) spending plan for 2024-25, the district's unaudited actuals for 2024-25, and the Gann limit calculation required for state reporting.
"For this year, our district expects to receive approximately 30,000,000 in EPA revenues," the business-services presenter stated, noting EPA funds are constitutionally restricted to instructional purposes and that the spending plan primarily funds teacher salaries and instructional support. The board approved the EPA plan as a compliance item.
On the unaudited actuals, staff reported that the general fund closed the year with an operating deficit of $25,600,000 and an ending fund balance of $52,200,000, which includes $30,000,000 in restricted funds, $14.6 million in assignments, and $7,000,000 reserved for economic uncertainties. Staff also said the district contributed approximately $35,000,000 to special education and the routine restricted maintenance account. The presenter described these results as aligning with the district's fiscal stabilization plans and warned that continued structural deficit spending risks running out of cash without further cuts.
Trustees asked how these results should be explained to the public and pressed for clarity on how stabilization measures translate to fewer future closures; staff responded that the unaudited actuals provide a definitive snapshot of the prior year's finances and form the basis for out-year planning. The board adopted the unaudited actuals and the Gann limit calculation by roll call.
Why it matters: The unaudited actuals and EPA plan frame near-term budget decisions, including the magnitude of program cuts or consolidations the district may need to balance multi-year deficits. Staff emphasized that personnel costs make up about 80% of unrestricted spending and remain the principal driver of fiscal pressure.
Next steps: Auditors will review the unaudited actuals; the board will receive an interim budget snapshot in December to update projections and any required stabilization actions.
