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The Pleasanton school board reviewed and approved the district’s second interim budget report last week, which shows a $3.3 million deficit that the administration is working to clear in order to move out of the negative certification category with the county.
According to staff, the wider variance from the roughly $2.5 million ending fund balance projection in the first interim report was mainly due to increases in costs like salary, benefits and other compensation, which makes up about 91% of the district’s expenditures in the unrestricted side of its budget.
But even with the nearly $1 million of additional costs that the district has to address in order for Pleasanton Unified School District’s budget to return to a positive certification with the Alameda County Office of Education — it’s had to submit the last two budget reports as negative certifications — staff remain hopeful that the district’s finance will eventually level out this year.
“The second interim (report) does show a slight deterioration from the first interim … but we do believe that through vigilance in our spending for the remainder part of the year, we can improve the ending fund balance,” Ahmad Sheikholeslami, assistant superintendent of business services, said during the March 12 meeting.
“As our financial picture improves and we’re able to clear that negative balance, we can return to a positive certification,” he told the Board of Trustees. “We believe it’s possible, depending on the state budget, to achieve that at some point in the coming fiscal year.”
Over the past year and a half, PUSD has been dealing with financial challenges, which continue to be highlighted during these budget reports.
According to PUSD, declining enrollment, less money from the state and higher costs for operational supplies and services are all just some of the reasons why the board has had to make tough fiscal decisions.
The board recently approved over $11 million in reductions across many departments, a move that has received negative feedback from the community so much so that parents have organized a “Save our Schools Rally” at the Ken Mercer Sports Park this Saturday. Starting at 3 p.m., participants will voice their concerns over the millions of dollars worth of cuts to services and staff positions.
And as detailed in last week’s budget report, other increases in expenditures have negatively impacted the district’s finances. This comes off the heels of the first interim budget report in December where PUSD had to submit its budget to the county with a negative certification, which led the county and state to send financial experts to aid the district in addressing its financial issues.
This latest interim budget report, which uses the most recent budget data, is the second of three updates to the district’s 2025-26 budget.
Some of the new information showed adjusted expenditures where salaries and benefits increased by nearly $750,000.
When asked about that specific expenditure increase, Sheikholeslami said that since covid, there has been a trend of more employees going on sick leave, meaning more substitute teachers need to be hired, which raises the overall costs. Sheikholeslami said during budget development for next year, staff will aim to account for those absences better.
Board members also reviewed some of the other hefty expenditures that the district has had to account for when reviewing its finances, including notable costs to special education services and utility costs.
“When I first came here our total water bill was around like $500,000. Now it’s close to $900,000,” Sheikholeslami said, adding that in 2019 the district spent about $2.7 million for utilities and now, they are spending over $5 million.
Trustee Charlie Jones suggested bringing up the idea of some sort of subsidy or reduced utility rates deal with the city, which Sheikholeslami said would be something they could discuss at the next PUSD and city liaison committee meeting.
In regards to special education costs, staff said that is one expenditure that they can never accurately estimate because of many different factors like students being placed in special education late or in the middle of a school year. That’s why staff said they try to minimize surprise costs by being more conservative when projecting those expenditures.
Board President Kelly Mokashi also spoke on the special education topic and how those costs can be, as she put it, exorbitant. She noted how the district also can’t really hire employees for specific services, which means that they have to hire costly contractors — another notable expense according to the presentation — to provide individual services for specific students in special education.
“That’s where a lot of our special ed costs are coming,” Mokashi said.
“When you have high intense needs students who require very specialized services … sometimes we cannot hire in house people to provide that specific service,” Ed Diolazo, deputy superintendent and assistant superintendent of student services, said during the meeting.
He said that at the end of the day, those students need those specific services and additional staff, which will cost money. But he also said that it doesn’t help that the state isn’t doing much to aid the district when it comes to special education.
“We just are not getting the funding,” Diolazo said. “What does that mean; we dig into (the) general fund.”
But last week’s meeting wasn’t all negative.
Apart from going over certain increases in revenue, staff noted that they are working to bring in more money into the district. Some examples include bringing in new tenants at the district office, expanding the Kids Club program and potential grants from the state that could offset the entire negative ending fund balance.
Sheikholeslami said the district is expecting one-time money that will help, it’s just that they don’t really know when that money will come in or how much it will be.
“It may end up being $3 million,” Sheikholeslami said.
A parcel tax is also another revenue generating idea that the district continues to toss around as being one of the best ways to address its loss of revenue.
Superintendent Maurice Ghysels also pointed out that the district has been working on a revenue-generating dashboard which will come to the board for review on March 26.
Despite all of that, many board members were still very wary about the district’s ongoing fiscal challenges and said they all need to think more long term about PUSD’s fiscal health in order to avoid being in the same situation in the future.
Jones specifically said they need to address declining enrollment — one of the main reasons for PUSD’s financial status — by possibly bringing in more kids and their families from other districts, which is something that the district has already been looking into. However, he said that won’t be possible without some help from the city.
“We need revenue generators and the city needs more housing,” Jones said. “That’s just the reality.”
“At the end of the day, I would just reiterate with the board, part of our goal is to really work with the district for the long-term strategic planning so that we’re not kicking the can down like we did a few years ago with the one time funding because at the time we validated it and now we’re all saying that was a mistake,” Mokashi said.
“We know there’s been challenges in the past in this community,” she added. “At the end of the day … we do have to be smarter and more strategic (in the) long term.”
