AUSD Faces $16.5 Million Deficit as New Leaders Chart Recovery Path

Antioch Unified School District's new interim superintendent and chief business officer delivered their first public accounting of the district's fiscal crisis at the Sept. 9 Governing Board meeting — a $16.5 million unrestricted deficit with reserves on track to run dry by 2028-29. The sobering numbers arrived alongside an outside consultant's warning that special education spending patterns are unsustainable, and emotional testimony from teachers and parents who say budget cuts have already reached classrooms and fire alarm systems.

• $16.5M unrestricted deficit confirmed as CBO unveils phased recovery plan with solvency presentation due Sept. 23
• Teachers union warns district could lose $37M annually if Proposition 3 fails in November, urging board resolution of support
• Two schools placed on firewatch after budget cut eliminated the district's only electronic technician
• Special education consultant flags dramatically higher contractor costs and inconsistent pre-referral practices as key drivers of a $53M general fund drain
• 36 bond-funded projects delivered across 17 campuses; two major school rebuilds set for October groundbreaking
• Board approves interim superintendent contract for Jose Banda at $1,250/day for up to 46 days

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The $16.5 Million Hole: Inside AUSD's Fiscal Emergency

The basics: AUSD moved from positive fiscal certification to negative status during the 2025-26 school year, meaning the district cannot demonstrate its ability to meet financial obligations for the current and two subsequent fiscal years without corrective action.

Why it matters: The unrestricted general fund — the money that pays for core staffing, programs, and operations — shows a negative $6.3 million ending balance. Factor in the required 3% reserve of roughly $10.2 million, and the gap balloons to $16.5 million. Without intervention, combined reserves will be exhausted by 2028-29.

Where things stand: Chief Business Officer Rosa Losa, presenting her first budget update to the board, traced the structural deficit to years of compounding pressures: enrollment has dropped from 17,965 to 15,159 students, attendance has fallen to 90% versus a pre-pandemic rate of 93–94%, costs have continued to climb, and the district contributes $53 million in unrestricted dollars to restricted programs.

"The projected unrestricted ending fund balance is a negative 6.3. Additionally, the district must maintain a 3% reserve, which is roughly $10.2 million. When we account for that, the unrestricted deficit amounts to $16.5 million," said CBO Losa.

Multi-year projections are equally stark. The combined general fund is projected to spend $40.1 million more than it receives over three years — $8.9 million in 2026-27, $17.1 million in 2027-28, and $14.1 million in 2028-29.

The board previously approved $18.2 million in reductions for 2026-27, but Losa cautioned that board approval alone does not confirm real savings. "Approvals alone doesn't confirm that the full amount has produced ongoing savings. The next step is to verify each approved action," she said. An additional $13.3 million in originally proposed but unapproved reductions may also need to be revisited.

Trustee Antonio Hernandez pressed on the issue of restricted program contributions, asking how grant funding can actually cost the district money. "People hear that there's grants or that there's money coming, but if we get $10 million for a program and we still have to contribute a million dollars, that doesn't actually end up saving us any money, actually costs us money," he said.

The recovery plan has four phases: verify approved reductions against position control and payroll; review contracts; identify eligible restricted expenditures that could relieve the general fund; and bring updated projections with actionable options back to the board.

Decisions: The board adopted Resolution 2026-2728 to transfer restricted grant funds into a special reserve fund, a move designed to prevent one-time dollars from being consumed by ongoing costs. Future withdrawals will require a board vote. Vice President Olga Cobos-Smith asked detailed questions about how the transfer protects the district's fiscal position, and CBO Losa explained it isolates restricted resources so they cannot mask the unrestricted problem.

What's next: A solvency plan presentation is due Sept. 23. Governance training evidence is due Oct. 8. Detailed reduction lists are expected in November.

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Special Ed Costs Expose Systemic Gaps

Why it matters: The $53 million the general fund contributes to restricted programs — with special education as the largest driver — is one of the core forces behind the structural deficit. An outside consultant's findings suggest the district is spending dramatically more on contracted special education services than comparable districts, and that inconsistent practices in general education are pushing more students into costlier programs.

Where things stand: Angenette Pelletier of School Services of California presented findings from a comprehensive study of the district's special education program. AUSD's percentage of students with disabilities exceeds the statewide average and has been growing even as overall enrollment declines.

"Your expenditures on contracted services by personnel who do not work for you directly but are contracted by you are dramatically higher," Pelletier told the board. "So that is an area driving special education need for general fund contribution."

The study found that Multi-Tiered System of Supports (MTSS) and Student Study Team (SST) practices — the general education interventions that can address student needs before a formal special education referral — vary significantly across school sites. Sites with firmer pre-referral practices have fewer referrals.

"We were able to see general ed data that there are some sites where there are firmer practices and at those sites there are fewer referrals for assessment," Pelletier said.

The study found no evidence of overstaffing but identified opportunities for veteran staff to share expertise and build internal capacity. Pelletier also delivered a pointed warning about the risks of cutting programmatic support during a fiscal crisis: "In the midst of being fiscally responsible, you also need to be fiscally sustainable. And the risks of not providing that support could lead to additional unplanned expenditures."

What's next: The consultant recommended consistent SST processes districtwide, better behavioral support in general education settings, and monitoring of instructional benchmarking data. Trustee Hernandez asked how the district would measure MTSS fidelity across sites.

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Schools on Firewatch After Budget Cuts

Why it matters: Two district schools have been placed on official firewatch — meaning personnel must physically patrol for fire hazards — after the elimination of the district's electronic technician position during prior layoffs left fire alarm panels unable to communicate with the fire department.

Where things stand: Three public speakers — Danielle Watson, Jacob F., and Trustee Hernandez during future agenda items — raised the issue from different angles.

Watson told the board that an outside contractor was hired to inspect fire alarm systems at more than 20 campuses, questioning whether the cost exceeded what the technician's salary would have been. "The district eliminated the electronic technician position in last year's layoffs. Your own resolution lists that position for the elimination," she said.

Jacob F. cited workload studies showing the position carried the third-highest workload in the district and urged the board to place reinstatement on a future agenda.

The other side: Interim Superintendent Jose Banda acknowledged the complexity of the situation, explaining that the entire position title was eliminated — meaning reinstatement would require HR work, budget review, and union negotiation. He clarified that evacuation systems at the schools still function. "The real concern is those panels communicate to the fire department. And that's where the issue is. It's the communication between the school and the fire department," Banda said.

What's next: Trustee Hernandez requested a full fire alarm system update at a future meeting. Banda committed to looking into the matter.

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Teachers and Parents Sound the Alarm on Classroom Conditions

Amanda Freitas, a 19-year veteran kindergarten teacher at Fremont Elementary, delivered some of the most striking testimony of the evening, describing what budget-driven staffing losses look like inside a classroom.

"I do not currently feel like an effective teacher, and I feel defeated on a daily basis. I have been teaching for 19 years, 15 years at Fremont Elementary. I know how to teach," Freitas said. She described being the sole adult in a room of students with complex behavioral, developmental, bilingual, and learning needs, and said she has called for assistance every single school day this year. She advocated for the return of split schedules that once allowed smaller instructional groups.

Watson connected the classroom crisis to data, citing CASP results showing only 14% of AUSD students met math standards. For students with disabilities, the numbers were devastating: "That means 93% of our 11th graders with disabilities were below the math standard," she said. Watson linked these outcomes to the school-to-prison pipeline, citing federal civil rights data on disproportionate discipline and law enforcement referrals for students with disabilities.

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Prop 3: $37 Million Question Looms Over Budget Crisis

Bob Carson, President of the Antioch Education Association, used public comment to urge the board to pass a resolution supporting Proposition 3, which would permanently extend Prop 55 — originally Prop 30 from 2012 — maintaining higher tax rates on individuals making over $371,000 and couples making over $743,000.

"It is projected that AUSD will lose about $37 million a year beginning in 2030 if this proposition doesn't pass," Carson warned. He described the union's canvassing work and asked the board to formally endorse the measure.

A CSEA representative echoed support, saying the community "can't afford to let it go."

No board action was taken, as the item was raised during public comment.

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Bond Program Delivers, but $2 Billion in Needs Remain

Director of Facilities Miguel Cruz provided a comprehensive update on the Measure B bond program, reporting 36 completed projects across 17 of 24 sites, impacting more than 10,000 students, with over $30 million invested from the first $75 million issuance.

John Muir's phase one parking lot expansion was completed on schedule, and steel is now erected for new construction. Orchard Park and Fremont are in the bidding phase, with groundbreakings anticipated in October.

But Cruz was candid about the gap between needs and resources. The district's 2018 facility master plan identified nearly $1.2 billion in needs — roughly $2 billion in present-day value. The $195 million bond covers approximately 10% of that.

"Our reality is that there will not be sufficient funding under this bond to deliver all of the projects within phase two or that other category," Cruz said. He noted the district is pursuing state OPSC funding and Prop 2 state bond eligibility.

Sustainability elements in completed projects include expanded solar installations, new EV charging stations, battery energy storage systems to offset peak PG&E costs, bioretention swales, and reflective TPO roofing. A project stabilization agreement draft has been shared with the trades council for review.

Board members commended the transparency and professionalism of the facilities program. Vice President Cobos-Smith and Trustee Hernandez both praised the presentation.

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Board Pushes for Values-Centered Budget Process

Vice President Olga Cobos-Smith expressed frustration that last year's budget cuts were rushed through without a conversation about the district's values.

"I would like to have a session where we do talk about values, because it's been said from this dais that our values guide our budget. And I'm wondering whose values we're working with right now," she said.

Cobos-Smith also pushed back on concerns about meeting frequency, noting that "the most effective boards actually meet at least three times a month. So this notion that we are doing too many meetings is just one that I don't think really aligns with becoming an effective board."

Trustee Hernandez echoed the call for community engagement, urging staff to provide tangible, actionable information rather than lecturing.

CBO Losa committed to flexible scheduling for community forums, including afternoon sessions for working parents. "We wanted to reach out to parents, have community forums late in the afternoon to ensure that parents that are working during the day are able to attend and provide their feedback," she said.

Interim Superintendent Banda pledged transparency and no surprises. The board agreed to schedule a values study session and governance training before October.

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Minor Items

• Interim Superintendent Jose Banda's employment contract approved 4-0 at $1,250/day for up to 46 days; Trustee Rocha absent. (Vote: For: 4 — Brown, Hernandez, Cobos-Smith, Lathan; Against: 0; Absent: 1 — Rocha)
• Acting Superintendent Edward Dacus's 5-day contract ratified 4-0 at $300/day for the brief transitional period. (Vote: For: 4 — Brown, Hernandez, Cobos-Smith, Lathan; Against: 0; Absent: 1 — Rocha)
• Ascend Rehab Services agreement approved 3-0-1 after being pulled from the consent agenda for a separate roll call vote; VP Cobos-Smith abstained. (Vote: For: 3 — Brown, Hernandez, Lathan; Abstain: 1 — Cobos-Smith; Absent: 1 — Rocha)
• Nutrition Services Buyer position created, funded entirely by Child Nutrition Fund with no general fund impact; supports nearly 3 million meals annually.
• Office Assistant position reinstated for universal meal benefit application processing; CDE reimbursement expected.
• Resolution 2026-2723 adopted, updating the district's Conflict of Interest Code.
• Resolution 2026-2729 adopted, approving provisional internship permits for teachers in the credentialing pipeline.