Newark Unified presents 2025–26 budget and LCAP; staff warn of one‑time ESSER end and multi‑year shortfall

Newark Unified finance staff and instructional leaders presented a draft 2025–26 Local Control and Accountability Plan and the district’s proposed budget on Tuesday, warning that one‑time pandemic funds (ESSER) are exhausted and that the multi‑year projection shows a structural gap that will require either reductions or new revenue to avoid negative reserves.

Consultant Stella Kemp reviewed the statewide economic outlook and the district’s revenue assumptions, telling trustees that updated state revenue forecasts have trimmed personal and corporate tax projections and that declining average daily attendance is reducing locally available funds. “We are basing our budget development on an ADA of 93%,” Kemp said, and urged investment in attendance recovery strategies.

Nancy Chen, who presented the ESSER/SR3 snapshot and estimated actuals, told trustees the district fully utilized ESSER funds and closed out balances previously earmarked for learning‑loss purchases; remaining COVID‑related one‑time funds are not expected. Chen outlined proposed 2025–26 revenue of approximately $58 million in LCFF revenue and cautioned the board that the district plans a contribution of about $16.87 million from unrestricted funds to restricted programs (special education and routine restricted maintenance), producing a projected net decrease in unrestricted fund balance of about $9.6 million for 2025–26.

Member Hill pushed staff for an explanation of an apparent jump in estimated expenditures compared with prior year actuals, saying the district’s estimated actuals for 2024–25 were higher than expected and asking for a line‑item explanation. Staff explained several drivers: roughly 19 positions previously budgeted in a now‑absent block grant were shifted back into the general fund; special‑education staffing and related outside services remain hard to recruit and therefore cost more; and legal and other outside services increased during the year. Chen said the district had attempted prior reductions but must maintain mission‑critical positions.

Trustees asked for clearer dashboards and for a full reconciliation showing: (1) which positions moved from block grants to general fund, (2) one‑time versus ongoing expenditures, and (3) legal and contracted services spending. Several trustees urged faster hiring for a chief business officer (CBO) to give the board more hands‑on financial oversight.

The draft LCAP (presented by Assistant Superintendent Karen Allard) kept the district’s four goals and proposed three new actions for 2025–26: expanded credit recovery, a monitoring tool for high‑school academic progress, and targeted salary support to recruit/retain teachers at low‑performing sites. Allard said the draft LCAP will return for approval on June 25 after required public‑hearing steps.

What’s next: The board will receive a revised budget at the 45‑day update after the state finalizes the budget and the county reviews the district’s submission. Staff committed to returning a memo reconciling the expenditure increases and a clearer multi‑year projection showing one‑time items and position shifts.

Context: Trustees noted that ESSER and other pandemic funds previously buffered district budgets; without those funds, districts statewide are reassessing base‑level staffing and program costs. The district’s actions will affect program staffing, maintenance contributions and potential program reductions in future years.

Ending: No final budget vote occurred; the board is scheduled to vote on the LCAP and budget items on June 25 and may adopt revisions after the state budget is signed.