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The San Ramon Valley Unified School District has been downgraded from a positive to a qualified status from the county upon its review of the district’s second interim budget update and uncertainty over ongoing cuts that had been proposed for the teacher’s union.
SRVUSD Superintendent CJ Cammack and Board President Shelley Clark received the letter announcing the news from County Superintendent of Schools Lynn Mackey April 16, noting that while the full $26 million in budget cuts approved by the board earlier this year would meet the reduction in spending required by the county during last year’s budget process, the fate of $13.7 million in cuts that would impact SRVEA represented employees remains unclear.
“As of the date of this letter, we understand that the district has not finalized the plan for reductions of approximately $13.7 million,” wrote county Deputy Superintendent of Business Services Daniela Parasidis in the letter. “Without these reductions, your fiscal condition will be compromised.”
The district is set to face a budget shortfall either way, according Parasidis, with a $34.7 million deficit in the current fiscal year. If the full $26 million budget reduction plan is implemented, the district would see a $12.2 million shortfall in the upcoming fiscal year and a $3.6 million shortfall in the 2026 to 2027 fiscal year.
But that number could be higher, with the district still not having a formal agreement with SRVEA for the $13.7 million – approximately half – of the $26 million budget reduction package that would impact the teachers union’s bargaining members.
Last month, the district declared an impasse in bargaining with SRVEA over cuts to the bargaining unit, a move that SRVEA did not join in – instead alleging that district management had failed to negotiate in good faith or consider alternatives to the cuts, and filing an unfair labor practice charge.
According to SRVEA representatives in a town hall last month, negotiations had stalled over district management’s refusal to back down from the proposed $13.7 million in cuts via teacher layoffs and refusal to approve alternatives that were proposed by the union, including an early retirement package, reducing pay for district administrators, and a revenue enhancement plan. For their part, SRVEA leaders said that they had refused to agree to the $13.7 million in cuts without seeing other alternatives first considered in good faith.
Without an agreement in place on the $13.7 million impacting SRVEA, the district would see a $25.9 million deficit in the next fiscal year and a $17.3 million deficit in the 2026 to 2027 fiscal year. That would push its ending fund balance into the red, to negative $8.1 million in the next fiscal year and negative $18.2 million in the following year. Special Reserve Fund 17 would be fully depleted by the end of the 2026 to 2027 fiscal year, and the district would not be able to meet the required 3% of reserve funding, all amid projections of declining enrollment, according to Parasidis.
“For these reasons, the Contra Costa County Superintendent of Schools is invoking her authority… and changing the district’s certification from positive to qualified,” Parasidis wrote. “A qualified certification indicates that the district may not meet its financial obligations for the current or two subsequent fiscal years.”
The qualified status means that the county will be conducting a study on the district’s finances, including a review of internal controls, and requiring the district to submit financial projections for all fund and cash balances as of June 30 for the current and following fiscal years.
In addition, the district is required to provide a status update on the pending $13.7 million in cuts by April 30, and a third interim report by June 30. It is also required to submit a disclosure of non-voter approved debt issuance to the county 30 days prior to its approval, as well as to provide any proposed collective bargaining agreements with SRVEA.
Further, the change in certification status has the potential to “trigger an engagement” with the Financial Crisis and Management Risk Assessment Team, which would conduct a fiscal health risk analysis of the district to evaluate its financial health and risks of insolvency during the current and two subsequent fiscal years.
The SRVUSD Board of Education is set to discuss the certification status as part of a second interim budget update at their upcoming meeting at 6 p.m. Tuesday (April 22). The agenda is available here.
In other business
*The board is set to issue proclamations recognizing Asian American and Pacific Islander Heritage Month, Day of the Teacher, Classified School Employees Week, Mental Health Awareness Month, Jewish American Heritage Month, and In Support of Heroes Month.
*The board is set to hear a Child Nutrition Department update.
*The board is set to vote on adopting a new Ethnic Studies curriculum.
