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The Dublin Unified School District revealed last week a budgeting error of $3.6 million, contributing to an updated reduction target of approximately $8.4 million for next school year.
Additional factors driving the increased need for cuts include lower-than-expected state funding dubbed the cost-of-living adjustment as well as higher-than-anticipated expenditures on staffing, facilities and insurance, compared to values assumed at the time of the 2025-26 budget adoption.
The new estimates are reflected in the first interim report, a budget revision that is based on actual changes that have occurred by the end of the reporting period Oct. 31.
Meanwhile, DUSD officials now anticipate that deficit spending this school year may total $9.2 million, up from $6 million expected at the time of the budget adoption, according to a slideshow on the report that is set for presentation at Tuesday’s regular meeting.
Superintendent Chris Funk addressed the new spending reduction target in an update Dec. 5 to DUSD staff and the community.
“I take full responsibility”, Funk said of the vacancy-savings budgeting error.
According to Funk, the district has built “vacancy savings” into its budget for many years, per standard practice. The savings occur when positions are unfilled.
“However, this year, those assumed savings were significantly overstated and not caught before the budget was adopted,” according to Funk.
It is not immediately clear why vacancy savings were previously over-budgeted.
Since the error, the district has implemented “new, stronger internal review controls and checks” over the district’s entire budgeting system to prevent a similar mistake from occurring, he said.
As for COLA, the projected range is now 1.27% to 2.53% for 2026-27, “far below” the 3.02% estimate used at budget adoption, according to Funk.
Provided at the lowest end of the COLA estimate represents a potential loss of $2.6 million in ongoing revenue, Funk added.
However, the final COLA is set to be announced during April of 2026 and Funk expects the value to be higher than 1.27%.
Other factors at play in the budgetary changes include expenses such as $900,000 due in delayed solar project close-out costs, $136,000 increase in insurance related to childhood sexual assault, $67,500 set aside for potential parcel tax consulting, $925,000 in various certificated and classified positions — associated with leaves of absences and column moves added after adoption — and $310,000 increase in health and welfare benefit costs due to higher participation, according to Funk.
“No single factor is unusual for a growing district, but together they place added pressure on our current-year budget,” Funk said.
Upon averaging projected deficits across the next three years with updated COLA assumptions, the reduction target is set at $8.4 million.
In relation to labor unions, a reduction of over $8 million would complicate negotiations with the Dublin Teachers Association, DUSD spokesperson Chip Dehnert said.
Facing their new reduction target, DUSD officials are identifying potential areas for cuts while maintaining classroom learning, safety as well as program and staffing stability, Funk said.
During Tuesday’s meeting, the board is set to consider approving the first interim report of the 2025-26 budget with a qualified certification, meaning the district may not meet its financial obligations for the remainder of the current fiscal year or for the two subsequent years.
Trustees will also consider whether to rescind their prior commitment of $2.9 million from the unrestricted general fund for the future repayment of debt associated with the district’s solar generation project, according to the memo.
Originally, the board approved the commitment of funds June 11, 2024.
Since approving the financial commitment, the district’s unrestricted deficit has increased due “in large part” to the vacancy-savings error and solar project close-out costs, the memo states.
Staff recommends withdrawing the committed funds to meet the district’s statutory reserve requirements in the current year, the memo states.
District staff are set to revisit the budget at the Jan. 13 board meeting with proposed reductions and an updated multi-year financial plan.
The DUSD board meeting’s open session is scheduled to begin at 6 p.m. The full agenda is available here.
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