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Livermore Valley Joint Unified School District officials expect to meet the agency’s financial obligations this school year while also expecting to require budget reductions totaling approximately $16 million for the two subsequent years.
As part of the first of two interim budget reports, the district was slated to meet the state’s requirement of a 3% minimum reserve this school year as well as 2026-27 and 2027-28, according to a Dec. 9 presentation to the LVJUSD Board of Education by Kayla Wasley, assistant superintendent of business services.
The first interim report was based on the district’s actual finances from July 1 to Oct. 31.
Given the anticipated achievement of the state’s required reserve, the board unanimously approved a positive certification of the 2025-26 first interim financial report without discussion via 3-0 vote — absent Trustees Craig Bueno and Deena Kaplanis — in accordance with Superintendent Torie Gibson’s recommendation.
However, following the presentation, district and teachers union negotiators reached a tentative agreement Dec. 12. The compromise still requires approval by LEA membership and the district’s board.
LVJUSD intends to use one-time funds to cover retroactive benefit increases for this year, district spokesperson Michelle Dawson told Livermore Vine this week. The ongoing cost of providing increased benefits and salaries are set to be reflected in cuts to the district’s budgets for the 2026-27 and 2027-28 academic years, she added.
While the costs associated with the tentative agreement are not expected to create a budgetary insolvency this school year, officials now eye approximately $14.7 million in ongoing cuts for the 2026-27 budget and an additional $1.5 million for the following academic year, district officials confirmed this past weekend.
The cuts would follow on the heels of multi-million dollar budget reductions made for the 2025-26 school year.
“The district will need to continue to evaluate spending to reduce deficit spending as well as allow for competitive compensation increases”, the interim budget report stated ahead of reaching a tentative agreement.
According to the report, the district’s total deficit spending this school year was anticipated to be $7,780,423, an additional deficit of $1,273,344 compared to the adopted budget.
Of the total deficit spending expected this school year, $2,960,847 was forecasted to come from unrestricted funds — a “stable” amount compared to the unrestricted deficit spending projected at the adopted budget, the report states.
Deficit spending of unrestricted funds was also anticipated to continue into next school year ($2,224,539) and 2027-28 ($489,242), according to Wasley’s presentation.
In effect, the district’s unrestricted ending fund balance was expected to creep to 3.35% in 2027-28, down from 4.37% this school year, the presentation states.
Despite the district’s expected deficit spending, LVJUSD’s total general fund balance was updated to be $18,633,686 for this school year— over $10 million above the anticipated total ending fund balance within the adopted budget thanks to a higher-than-expected total beginning fund balance, the report states.
As for total revenue this school year, the district expected $215,064,357, up from the adopted budget value by about $8.4 million.
Of the projected $200 million-plus general fund revenue, 72% was expected to come from LCFF sources, according to the report. The next largest chunk of expected funds (12%) was anticipated to come from other state revenues.
LCFF funding fell short of the adopted budget value by $181,935 due to lower-than-expected enrollment, the report states. But the loss was offset thanks to an increase to the transitional kindergarten LCFF add-on for lower staffing ratio.
To create the district’s multi-year projection, the Cost of Living Adjustment was reduced from 3.02% to 2.3% for 2026-27 and 3.42% to 3.02% for 2027-28, marking a downturn in funding from the projections in the adopted budget.
On the expenditure side of budgeting this school year, the district expected to spend $9,686,193 more than anticipated at the budget adoption for a total of $222,844,780.
Spending expected to exceed the adopted budget is composed of unrestricted expenditures ($81,248) and restricted expenditures ($9,560,227), according to the report.
Of the restricted expenditures, books and supplies represented the greatest over-budget expense anticipated — $6,424,718 more than planned — due to the use of carryover restricted funds and new grants as well as the shift of funds between supplies and services, the report states.
Of note, total salaries and benefits account for 82% of the district’s total budget, according to the report.
In terms of cash flow, the district anticipates ending the year with positive cash balances, the report states.
During some months of the 2025-26 school year, the district anticipates “negative cash”, covered by temporary borrowing from Fund 40.
Ahead of Wasley’s presentation of the first interim budget report, representatives from the Fiscal Crisis and Management Assistance Team — hired by the district to conduct a review of its finances — stated that the first interim report was more up-to-date than the FCMAT review.
Following the report presentation, Gov. Gavin Newsom is expected to release the 2026-27 State Budget proposal in January. The proposal is key to solidifying the district’s expected revenue.
Also next month, two budget advisory committees — formed this year to help prioritize LVJUSD programs and spending — are set to present their priorities to the board.
