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The Pleasanton Unified School District Board of Trustees will be voting on the district’s 2025-26 First Interim Budget Report Thursday evening, which shows that although the district’s financials improved slightly over the past few months, its unrestricted end fund balance remains in the negatives.
According to the Dec. 11 agenda report, staff will be recommending that the board approve the interim budget report and submit it as a “negative certification” to the Alameda County Office of Education (ACOE), which will indicate to the county that PUSD “will not meet its financial obligations in the current or subsequent fiscal year.”
“The Negative Certification will translate to additional oversight and support by the ACOE as well as a required fiscal health risk analysis conducted by the Fiscal Crisis Management and Assistance Team (FCMAT),” the First Interim Budget Report reads. “Staff will work closely with ACOE and FCMAT as they support the District’s efforts to stabilize its finances.”
The First Interim Budget Report is the first of two updates that staff will present in regards to the 2025-26 annual budget, which the board adopted back in June.
That budget had already included right sizing, reductions and the continued use of one-time funds as a response to several fiscal challenges that the district has been facing over the past few years, like loss of pandemic funding, rising costs and declining enrollment.
Since the budget’s adoption, the district has been able to paint a better picture of how it currently stands financially thanks to updated actual revenue and expenditure numbers through Oct. 31, 2025. In addition to the state enacting its 2025-26 budget, PUSD also closed its books for the 2024-25 fiscal year and accrued four additional months of actual financial data.
While staff have noted that the district has already taken several steps over the past few years to address its fiscal challenges, it hasn’t been enough, according to the report.
Some recent examples of the district working on improving its financial status include transferring $11 million one-time proceeds from the sale of its Vineyard property to its General Fund reserves and identifying just over $11 million in budget reductions for the 2026-27 fiscal year.
“While the transfer of Sale of Property funds into the General Fund provides a committed fund balance reserve that meets the minimum state required reserve for economic uncertainties, the ending fund balance falls short of the reserve which is reflected as a negative unappropriated fund balance,” the interim budget report states. “Once the District is able to clear this negative balance it can return to a Positive Certification.”
According to the report, the district’s ending fund balance went from a negative $5.7 million to a negative $2.53 million — an improvement that the district said still falls short of its previous projected ending fund balance of about $281,000. The positive projection was based on the district’s 45 Day Budget Update which had included new state revenue and estimates based on cost savings from expenditure reductions.
“While the current projections are an improvement from the Adopted Budget, they do fall short of the 45 Day Budget Update,” according to the staff report. “The First Interim Report shows the District will not meet the projections of the 45 Day Budget Update with a positive ending fund balance.”
According to staff, the main reason for the discrepancy is increased contributions to support the district’s special education program.
“This is now reflected in the General Fund improving the total ending fund balance but not solving our underlying structural deficit or fiscal and budgetary position,” according to staff.
Along with reviewing the updated financials, the first interim report will go over the board’s approved expenditure reductions for the 2026-27 fiscal year and how the county’s Office of Education will provide oversight and support to address PUSD’s financial standings.
“Together, these elements are intended to give the Board and community a transparent view of our fiscal condition and the work ahead to restore long-term solvency while continuing to support high-quality programs for students,” the report reads.
The report also states that while the recent, monthslong efforts to identify new budget cuts and reductions were an “essential step forward to balancing the district budget and ensuring long-term fiscal sustainability,” the district noted that there is still more work to be done in order to stabilize its finances.
“Looking forward, the district will need to take advantage of potential one-time State funds to rebuild its reserves while making the necessary reductions to eliminate deficit spending,” the budget report reads. “Ultimately, the district will also need to increase revenues through local property taxes and leveraging our property assets.”
The board’s open-session meeting is scheduled to begin at 6 p.m. Thursday (Dec. 11). Read the full agenda here.
In other business:
* Staff will be recommending that the board approve an agreement with Swinerton Builders, a construction company based in Santa Clara, to demolish close to a dozen of the buildings at Village High School, including the STEAM Preschool and administration buildings.
The $2,235,800 contract — funded by the district’s $395 million Measure I bond — is the latest development into PUSD’s larger goal to convert the space into the Educational Options Center, which would house — among other things — the continuation school and other similar PUSD alternative education programs.
* The board will be looking at approving a nearly $743,000 contract with United Inspection to provide daily on-site inspections, reporting and other verification work related to the Campus Renovation Project at Foothill High School.
With the demolition portion of the project now complete, district staff said “construction of the new theater and modernization of the gymnasium are expected to begin shortly,” which is why PUSD is seeking to acquire inspection services.
“The project requires continuous Division of the State Architect (DSA) Project Inspector services in order to maintain compliance with all California Building Code requirements and to support DSA certification of the completed facility,” the Dec. 11 staff report states. “DSA mandates that all school construction projects be inspected by a certified Project Inspector who ensures that the work conforms to the approved construction documents, the applicable codes, and all required testing and inspection procedures.”
The agreement between the district and United Inspection, which will also be funded by Measure I, will run until March 30, 2028.
* Regarding the renovation project at Foothill, the board will also be voting on approving another contract with Crawford and Associates, a civil engineering company, for Materials Testing and Special Inspection (MTSI) services.
According to staff, these services will “support structural work, concrete placement, welding, soil testing, and all inspection activities.” The contract will cost the district just over $416,000 from its Measure I fund.
* Staff will also be presenting two separate contract agreements with Robert A. Bothman Construction — one for the Harvest Park Middle School Field Renovations project and the other for the field renovation project at Hart Middle School.
Both agreements will be for pre-construction and construction services at both middle schools. The scope of work for each project includes the installation of a synthetic turf field, synthetic track and landscaping upgrades. The agreement for Hart Middle School also includes the rehabilitation of the asphalt play surface.
Both projects are within budget — funds will come from Measure I as well — and construction for both is expected to begin in early 2026.
* Another contract that the board will be voting on will be between the district and S&H Construction for the Valley View Elementary School Transitional Kindergarten (TK) Building Increment 2 project. The scope of the project includes construction of the new TK building, accessibility improvements, and associated site development.
