Livermore Valley Joint Unified School District Report

Fiscal Review December 8, 2025 Livermore Valley Joint Unified School District Michael H. Fine Chief Executive Officer December 8, 2025 Torie Gibson, Superintendent Livermore Valley Joint Unified School District 685 East Jack London Blvd. Livermore, CA 94551 Dear Superintendent Gibson: In September 2025, the Livermore Valley Joint Unified School District and the Fiscal Crisis and Management Assistance Team (FCMAT) entered into an agreement for FCMAT to conduct a review of the district’s 2025-26 adopted general fund budget and multiyear financial projections. The agreement stated that FCMAT would perform the following: 1. Review the district’s 2025-26 adopted general fund budget and use it as a baseline to develop an independent multiyear financial projection (MYFP) for the current and two subsequent fiscal years, including a cash flow analysis for the same period. The MYFP will be a snapshot in time of the district’s financial status. 2. The Team will present the final report to the district’s board of trustees at a public meeting following completion of the review. This report contains the study team’s findings and recommendations. FCMAT appreciates the opportunity to serve the Livermore Valley Joint Unified School District and extends thanks to all the staff for their assistance during fieldwork. Sincerely, Michael H. Fine Chief Executive Officer Michael H. Fine • Chief Executive Officer 1300 17th Street – City Centre, Bakersfield, CA 93301-4533 • Tel. 661-636-4611 • Fax 661-636-4647 www.fcmat.org Table of Contents Table of Contents About FCMAT ...................................................................................................ii Introduction ......................................................................................................iv Background ...............................................................................................................iv Study and Report Guidelines ................................................................................iv Study Team .................................................................................................................v Executive Summary .......................................................................................vi Findings and Recommendations.................................................................1 Multiyear Financial Projection ................................................................................1 Adjustment Analysis ...............................................................................................3 Enrollment, Unduplicated Pupils, and Average Daily Attendance ..............5 Multiyear Financial Projection Assumptions .....................................................11 Multiyear Financial Projection Analysis ............................................................26 Reserves and Unrestricted General Fund Balance .......................................32 Other Funds and Recommendations ................................................................33 Cash Flow Analysis ................................................................................................36 Appendix ........................................................................................................38 Appendix A — Study Agreement .......................................................................39 Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District i About FCMAT About FCMAT Purpose and Services FCMAT was created by the California Legislature to help California’s transitional kindergarten through grade 14 (TK-14) local educational agencies (LEAs) avoid fiscal insolvency. Today, FCMAT helps LEAs identify, prevent and resolve financial, management, program, data, and oversight challenges; provides professional learning; produces and provides software, checklists, manuals and other tools; and offers other related school business and data services. FCMAT may be asked to provide fiscal crisis or management assistance by a school district, charter school, community college, county superintendent of schools, the state superintendent of public instruc- tion, or the Legislature. When FCMAT is asked for help with management assistance or a fiscal crisis, FCMAT management and staff work closely with the requesting LEA to meet their needs. Often this means conducting a formal study using a FCMAT study team that coordinates with the LEA for on-site fieldwork to evaluate specified operational areas and subsequently produces a written report with findings and recommendations for improvement. For more immediate needs in a specific area, FCMAT offers short-term technical assistance from a FC- MAT staff member with the required expertise. To help meet the need for qualified chief business officials (CBOs) in LEAs, FCMAT offers four different CBO training and mentoring programs that consist of 11 or 12 diverse two-day training sessions over the course of a full year. For agencies with professional learning needs, FCMAT offers workshops on specific topics. Popular top- ics include associated student body operations, use of FCMAT’s Projection-Pro online financial forecast- ing software, use of FCMAT’s Local Control Funding Formula (LCFF) Calculator, and data reporting for the California Longitudinal Pupil Achievement Data System (CALPADS). FCMAT staff and management also frequently make presentations at various professional conferences. The California School Information Services (CSIS) service of FCMAT helps the California Department of Education (CDE) operate CALPADS; helps LEAs learn about CALPADS, resolve data issues and meet reporting requirements; and provides LEAs with training and leadership in data management. CSIS also developed and continues to host and improve the Standardized Account Code Structure (SACS) web- based financial reporting system for all California LEAs, and provides ed-data.org, which gives educators, policymakers, the Legislature, parents and the public quick access to timely and comprehensive data about TK-12 education in California. Since it was formed, FCMAT has provided LEAs with the types of help described above on more than 2,000 occasions. FCMAT’s administrative agent is the Kern County Superintendent of Schools. FCMAT is led by Michael H. Fine, Chief Executive Officer, and is funded by appropriations in the state budget and modest fees to requesting agencies. Workshop schedules, manuals, presentation slide decks, Projection-Pro software, LCFF calculators, past reports, an online help desk, and many other resources are available for download or use at no charge on FCMAT’s website. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District ii About FCMAT History FCMAT was created by Assembly Bill 1200 (Chapter 1213, Statutes of 1991) and Education Code 42127.8. Assembly Bill 107 (Chapter 282, Statutes of 1997) added Education Code 49080, which charged FCMAT with responsibility for CSIS and its statewide data management work, and Assembly Bill 1115 (Chapter 78, Statutes of 1999) codified CSIS’ mission. Assembly Bill 1200 created a statewide plan for county offices of education and school districts to work together locally to improve fiscal procedures and accountability standards. Assembly Bill 2756 (Chapter 52, Statutes of 2004) gave FCMAT specific responsibilities for districts that have received emergency state loans. In January 2006, Senate Bill 430 (Chapter 357, Statutes of 2005) amended Education Code 42127.8, and Assembly Bill 1366 (Chapter 360, Statutes of 2005) amended Education Codes 42127.8 and 84041. These new laws expanded FCMAT’s services to include charter schools and community colleges, re- spectively. Assembly Bill 1840 (Chapter 426, Statutes of 2018) changed how fiscally insolvent districts are adminis- tered once an emergency appropriation has been made, shifting oversight responsibilities from the state to the local county superintendent to be more consistent with the principles of local control, and giving FCMAT new responsibilities associated with the process. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District iii Introduction Introduction Background Located in the Alameda County, the Livermore Valley Joint Unified School District has a five-member gov- erning board and serves students in grades TK through 12 at nine elementary schools, two TK-8 schools, three middle schools, two high schools, one continuation school and one alternative education school. The district also operates an adult education program, participates in the Tri-Valley Regional Occupation Program, and partners with the Community Association for Preschool Education Inc for preschool services. According to data from the CDE, the district’s student enrollment has fluctuated slightly over the past five years, dropping from 13,305 to 12,968 in 2024-25, with minor year-to-year changes. As of the 2024-25 second principal apportionment certification (the latest data available), 23.9% of the district’s students were identified as English learners, foster youth, and/or eligible for free or reduced-price meals.1 The district’s 2025-26 adopted budget projected unrestricted deficit spending of $2,903,530 in 2025-26 and $159,173 in 2026-27. To meet the required 3% reserve for economic uncertainties in the two subse- quent years, the district included a $600,000 line-item budget reduction in 2026-27 (line B10 on SACS Form MYP). After a two-year labor settlement for 2022-23 and 2023-242 and a salary schedule restructure as well as a one-time settlement for 2024-25, the district has not reached a settlement with all its bargaining groups for 2025-26. Historically, the percentage of the district’s general fund unrestricted expenditure budget that is allocated to salaries and benefits has been above prior year statewide averages. Table 1. Historical Data and District 2025-26 Adopted Budget Comparison of Percentage of Statewide and District General Fund Unrestricted Expenditure Budget Allocated to Salaries and Benefits Description 2021-22 Actual 2022-23 Actual 2023-24 Actual 2024-25 Actual 2025-26 Budget Statewide Average 86.62% 85.97% 85.95% n/a n/a District Percentage 90.89% 90.40% 98.56% 94.42% 92.26% Sources: Adapted from EdData, District’s 2024-25 unaudited actuals report, and District’s 2025-26 adopted budget report. Notes: Statewide average data not available for 2024-25 through 2025-26. Study and Report Guidelines In September 2025, the Livermore Valley Joint Unified School District and the Fiscal Crisis and Management Assistance Team (FCMAT) entered into an agreement for FCMAT to conduct a review of the district’s 2025-26 adopted general fund budget and to prepare an independent multiyear financial pro- jection (MYFP) for the current and two subsequent fiscal years, including a cash flow analysis for the same period. The MYFP is a snapshot in time of the district’s financial status. FCMAT visited the district on October 1-3, 2025, to conduct interviews with district and school staff, collect data and review documents. Following fieldwork, FCMAT continued to review and analyze documents. This report is the result of those activities. 1 Students are counted only once even if they are in more than one of these categories. 2 Two-year settlement for all bargaining groups totaling 13% increase, 7% effective 7/1/2022 and 6% effective 3/1/2023. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District iv Introduction FCMAT’s reports focus on systems and processes that may need improvement. Those that may be func- tioning well are generally not commented on in FCMAT’s reports. In writing its reports, FCMAT uses the Associated Press Stylebook, a comprehensive guide to usage and accepted style that emphasizes con- ciseness and clarity. In addition, this guide emphasizes plain language, discourages the use of jargon and capitalizes relatively few terms. Study Team The study team was composed of the following members: Roslynne Manansala-Smith Andrea Ward FCMAT Intervention Specialist FCMAT Intervention Specialist Leonel Martínez FCMAT Technical Writer Each team member reviewed the draft report to confirm accuracy and achieve consensus on the final recommendations. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District v Executive Summary Executive Summary In recent years, the Livermore Valley Joint Unified School District has experienced many changes in its leadership team, with four of the assistant superintendents serving in their role for a year or less. The dis- trict also faces uncertain federal funding, low cost-of-living adjustments amid rising expenses, the expira- tion of restricted one-time COVID-19 funds and other grants, and unsettled labor agreements for 2025-26. FCMAT’s primary objective in this study was to review the district’s 2025-26 adopted general fund budget and develop an independent MYFP and cash flow analysis. The team reviewed numerous documents and financial reports, including the district’s 2023-24 annual independent audit, unaudited actuals reports, enrollment and attendance data and other historical financial information relevant to the study. FCMAT developed its MYFP based on the district’s 2025-26 adopted budget report, along with information from the district’s financial system and staff. Financial projections are based on certain assumptions and criteria, including enrollment and average daily attendance (ADA) trends, cost-of-living adjustments, economic conditions, and revenue and expenditure estimates. Therefore, any changes in these underlying assumptions will alter the results of the projection. The district’s 2025-26 adopted budget and MYFP were based on the 2025-26 governor’s budget proposal, governor’s May revise, and other assumptions available at the time of preparation. Due to the time that elapsed between the district’s 2025-26 adopted budget report and FCMAT’s review and preparation of an equivalent MYFP, FCMAT had access to more current information than used in the assumptions used by the district. Specifically, FCMAT’s MYFP was based on the enacted 2025-26 state budget, as well as updated information on economic factors, enrollment and ADA. The district’s 2025-26 adopted budget and MYFP show that it will meet the state’s minimum reserve requirement despite $2.904 million in deficit spending in the unrestricted general fund. A one-time $600,000 budget reduction in 2026-27 lowers the unrestricted deficit spending to $159,173 and keeps the district in compliance with reserve requirements. The district planned to reconvene its Budget Advisory Committees in the fall of 2025 to identify reductions to ensure the district meets its minimum reserve requirements in the two subsequent years. Interviews indicate the district started these committee meet- ings in August 2025. FCMAT projects a slightly lower unrestricted general fund deficit of $2.850 million in 2025-26, with con- tinued deficit spending of $2.154 million in 2026-27 and $1.704 million in 2027-28. This structural deficit reduces the district’s projected ending unrestricted fund balance to $6,147,392 in 2027-28, which means the district will be unable to meet minimum reserves in 2027-28. FCMAT’s MYFP projects a shortfall of about $447,000, suggesting the district may need comparable budget adjustments to meet the 2027-28 reserve requirement. Table 2. FCMAT Multiyear Financial Projection Summary, Unrestricted General Fund, 2025-26 — 2027-28 Adjusted Base Projected 2026- Projected 2027- Description Year 2025-26 27 28 Total, Revenues & Other Financing Sources $120,831,827 $124,534,890 $128,276,906 Total, Expenditures & Other Financing Uses 123,681,967 126,689,088 129,981,317 Net Increase (Decrease) in Fund Balance (2,850,140) (2,154,198) (1,704,411) Beginning Fund Balance, July 1 12,856,142 10,006,001 7,851,803 Ending Fund Balance, June 30 10,006,001 7,851,803 6,147,392 Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District vi Executive Summary Adjusted Base Projected 2026- Projected 2027- Description Year 2025-26 27 28 Components of Ending Fund Balance Nonspendable 150,000 150,000 150,000 Reserve for Economic Uncertainties 6,406,085 6,332,607 6,444,243 Unassigned/Unappropriated 3,449,916 1,369,196 (446,850) Source: FCMAT’s MYFP. Note: Rounding used in calculations. The unassigned/unappropriated fund balance of negative $446,850 in 2027-28 shown in Table 2 is the estimated amount by which the district must reduce expenditures or increase revenues to meet the min- imum reserve for economic uncertainties as required by Assembly Bill 1200. An LEA that consistently spends more than it receives depletes its cash resources. To eliminate deficit spending and depleting its cash resources, the district should develop a detailed fiscal solvency plan that includes timelines for com- pletion. Cash insolvency has severe consequences, including county and state intervention and a loss of local governance and control. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District vii Findings and Recommendations Multiyear Financial Projection Findings and Recommendations Multiyear Financial Projection This section examines the Fiscal Crisis and Management Assistance Team’s (FCMAT’s) multiyear financial projection (MYFP) for the district, including the methods and assumptions used in its development. It also presents findings related to the district’s 2025-26 adopted budget and MYFP, along with recommendations to guide the district in preparing future budgets and projections. Assembly Bill (AB) 1200 and AB 2756 require multiyear financial projections (MYFPs) as part of the budget adoption and interim reporting process. AB 2756, signed into law in June 2004, made substantive changes to the financial accountability and oversight process for monitoring the fiscal health of school districts and county offices of education. This included granting greater authority and responsibility for the superinten- dent of public instruction (SPI) and county superintendents of schools to intervene during fiscal crises and request assistance from the Fiscal Crisis and Management Assistance Team (FCMAT). At any time during the fiscal year, if a school district cannot meet its financial obligations for the current or two subsequent fiscal years, or if it receives a qualified or negative interim report certification, the county superintendent must notify the district’s governing board and the SPI. The county office must adhere to Education Code (EC) 42127.6 when helping a school district in fiscal distress. EC 42127.6 allows for the development of “a multiyear financial recovery plan that will enable the school district to meet its future obligations.” The MYFP is the primary tool used to develop this plan and restore the school district’s required reserve for economic uncertainties. Multiyear financial projections provide school districts and their governing boards with a fiscal planning framework to guide budget decisions and strategically allocate current and future resources in alignment with district goals, programs, and Local Control and Accountability Plans (LCAPs). MYFPs are required by both AB 1200 (Chapter 1213, Statutes of 1991) and AB 2756 as part of the budget adoption and interim reporting processes. Maintaining fiscal solvency while maximizing services to students with available resources is a continuing challenge for governing boards, which have a fiduciary responsibility to ensure the fiscal solvency of their respective school districts. Prudent financial planning is critical for all local educational agencies (LEAs), regardless of their size or structure. Each school district has unique financial risk factors, including reserve levels, enrollment trends, employee compensation, revenue volatility, and other local conditions. Recognizing financial trends is criti- cal for maintaining fiscal health. Monitoring and analyzing year-over-year trends in key budget areas allows school districts to identify financial risks early and take action to mitigate their effects. The primary goal of an MYFP is to support the development and maintenance of a balanced budget that ensures the district’s fiscal solvency and prevents the loss of local governance. Multiyear financial projections forecast the future fiscal impact of current decisions. However, all financial forecasts have inherent limitations because they rely on economic assumptions and key factors such as enrollment trends, cost-of-living adjustments (COLAs), estimates of one-time and ongoing costs, and shift- ing economic conditions at the federal, state and local levels. As a result, projections should be viewed as point-in-time trends based on recent assumptions rather than precise predictions of future amounts. To remain effective, MYFPs should be updated regularly — at each financial reporting period, whenever economic forecasts change, and before making any significant budget decisions, such as salary adjust- ments or major financial commitments. Ongoing budget monitoring is important, particularly in times of Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 1 Findings and Recommendations Multiyear Financial Projection fiscal uncertainty, when projections may be less reliable due to frequent changes in projected federal and state revenues. California LEAs use various methods and tools to prepare MYFPs. Significant investments in one-time and ongoing restricted programs over the past five years make the development of MYFPs by resource essen- tial to ensure projections accurately account for both one-time and restricted funds available for expen- diture over multiple years. Developing MYFPs by resource also helps school districts prioritize spending restricted funds before using unrestricted funds, plan effectively plan for the best use of funds and accu- rately project general fund balances into subsequent years. Tracking can be accomplished using FCMAT’s Projection-Pro multiyear and cash flow projection software, a web-based forecasting tool that is available for free to all school districts, charter schools, and county offices. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 2 Findings and Recommendations Adjustment Analysis Adjustment Analysis To develop the MYFP for the district, FCMAT reviewed the district’s revenue and spending trends for 2022- 23 through 2024-25 to understand its financial history. The 2025-26 adopted budget report served as the basis for determining the projections for the base year and the two subsequent fiscal years, and applied industry-standard criteria from the Department of Finance (DOF), the California Department of Education (CDE) and the School Services of California Inc. (SSC). The first step in FCMAT’s MYFP development process was to establish the base year revenues and expen- ditures. For this analysis, the base year is the 2025-26 fiscal year. Accurately estimating the base revenue and expenditure amounts is crucial because they are the foundation for subsequent years’ financial projec- tions. Without accurate base figures, the projections for the following years may be flawed or unreliable. Table 3 compares the district’s 2025-26 adopted budget report with FCMAT’s analysis. Due to the timing of the district’s completion of its adopted budget report, the 2024-25 estimated actuals report was used to determine the beginning fund balance, nonspendable amounts, and restricted fund balances for 2025-26. In contrast, FCMAT used the district’s 2024-25 unaudited actuals, finalized in September 2025, to deter- mine these amounts. As a result, the district’s 2025-26 general fund beginning balance was $11.53 million higher than its estimate. Differences in projected revenues and expenditures are explained in the “Multiyear Financial Projection Assumptions” section of this report. Table 3. Multiyear Financial Projection Comparison Summary, Combined General Fund, 2025-26 Object District Adjustment FCMAT Description Code 2025-26 Budget to Base Year 2025-26 Budget A. Revenues & Other Financing Sources LCFF Sources 8010-8099 $153,992,011 ($124,280) $153,867,731 Federal Revenue 8100-8299 11,931,401 1,334,458 13,265,859 Other State Revenues 8300-8599 22,521,212 4,414,756 26,935,968 Other Local Revenues 8600-8799 18,195,872 3,773,657 21,969,529 Other Financing Sources - Transfers In 8900-8929 11,012 0 11,012 Total, Revenue & Other Financing Sources 206,651,508 9,398,592 216,050,100 B. Expenditures & Other Financing Uses Certificated Salaries 1000-1999 91,128,088 (240,775) 90,887,313 Classified Salaries 2000-2999 35,701,335 1,167,391 36,868,726 Employee Benefits 3000-3999 53,422,440 (101,095) 53,321,345 Books and Supplies 4000-4999 8,354,924 (1,062,955) 7,291,969 Services and Other Operating Expenditures 5000-5999 22,538,391 496,107 23,034,498 Capital Outlay 6000-6999 121,046 208,466 329,512 Other Outgo (excluding Transfers of Indirect 7100-7299 Costs) 7400-7499 2,056,591 0 2,056,591 Other Outgo - Transfers of Indirect Costs 7300-7399 (214,228) (89,561) (303,789) Other Financing Uses - Transfers Out 7600-7629 50,000 0 50,000 Total, Expenditures & Other Financing Uses 213,158,587 377,578 213,536,165 C. Net Increase (Decrease) in Fund Balance (6,507,079) 9,021,013 2,513,934 D. Fund Balance Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 3 Findings and Recommendations Adjustment Analysis Object District Adjustment FCMAT Description Code 2025-26 Budget to Base Year 2025-26 Budget Beginning Fund Balance, July 1 14,879,367 11,534,742 26,414,109 Ending Fund Balance, June 30 8,372,288 20,555,755 28,928,043 Components of Ending Fund Balance Nonspendable 9710-9719 150,000 0 150,000 Restricted 9740 1,809,934 17,112,108 18,922,042 Committed Stabilization Arrangements 9750 0 0 0 Other Commitments 9760 0 0 0 Assigned 9780 0 0 0 Unassigned/Unappropriated Reserve for Economic Uncertainties 9789 6,394,758 11,327 6,406,085 Unassigned/Unappropriated 9790 17,596 3,432,320 3,449,916 Total Available Reserves - by Amount 6,412,354 3,443,647 9,856,001 Total Available Reserves - by Percent 3.01% 1.61% 4.62% Sources: District’s 2025-26 adopted budget report and FCMAT’s MYFP. Notes: Rounding used in calculations and FCMAT’s 2025-26 Budget includes the updated beginning balance from the district’s 2024-25 unau- dited actuals report. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 4 Findings and Recommendations Enrollment, Unduplicated Pupils, and Average Daily Attendance Enrollment, Unduplicated Pupils, and Average Daily Attendance Enrollment and average daily attendance (ADA) projections are essential elements of any MYFP because student enrollment and ADA by grade level are core components of the Local Control Funding Formula (LCFF), the primary revenue source for school districts. Accurate enrollment projections are crucial for iden- tifying changes that may significantly impact an LEA’s estimated revenue and expenditures in the current and subsequent fiscal years of an MYFP. Failure to identify significant ADA changes and to plan for neces- sary staffing adjustments in a timely manner can severely affect a school district’s financial position. Enrollment and ADA projections should be prepared frequently and with sufficient detail to monitor and project class sizes for subsequent years. Timely preparation of projections enables school districts to respond appropriately to enrollment declines or increases, allowing them to adjust staffing and expenditure budgets accordingly. These projections are also essential for determining instructional priorities, staffing ratios, grade level configurations, and/or potential boundary changes. Enrollment and ADA projections have inherent limitations because they are based on assumptions rather than exact calculations. Enrollment is influenced by various factors, such as the unpredictable timing of housing developments, unforeseen events affecting enrollment (e.g., the COVID-19 pandemic), shifts in local and regional demographics and birth rates, and fluctuating local, state, and national economic condi- tions. Other variables include historical ratios of enrollment progression between grade levels, changes in educational programs, and incoming and outgoing interdistrict transfers. Therefore, enrollment and ADA projections should be viewed as reasonable forecasts or trends rather than predictions of exact numbers. To develop its MYFP, FCMAT reviewed the district’s enrollment, unduplicated pupil count3 (UPC), and ADA trends from 2020-21 through 2027-28. The team then used Projection-Pro to prepare enrollment, UPC and ADA projections for the base year and the two subsequent years. These projections were used to calculate LCFF and other federal and state revenue estimates. Enrollment Since 2020-21, the district’s enrollment declined at an overall rate of 2.533%. However, during this time the district also experienced relatively stable enrollment during the most recent three years, with actual change of less than +/-1% each year. In the adopted budget, the district used the three-year weighted average cohort survival method to project grades TK-12 student enrollment of 13,126 in 2025-26, a 0.9% year-over-year decline in 2026-27, and stable ADA in 2027-28. LEAs commonly use the cohort survival method to project enrollment, which is also the model used by FCMAT’s Projection-Pro software. This method groups students by grade level upon entry and tracks them through each year they remain in school to evaluate the longitudinal relationship of the number of students advancing from one grade to the next. By doing so, the cohort survival method more closely accounts for student retention and new and departing students by grade. 3 Students unduplicated pupil count refers to the number of students identified as English learners, foster youth, and/or eligible for free or reduced-price meals. Each student is only counted once even if they fall into more than one of these categories. This count is exclusively for calculating supplemental and concentration grant funding under the Local Control Funding Formula. (EC 2574[b][2] and 42238.02[b][1]). Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 5 Findings and Recommendations Enrollment, Unduplicated Pupils, and Average Daily Attendance Cohort survival rates are calculated from historical enrollment data certified on the Fall 1 census day for the California Longitudinal Pupil Achievement Data System (CALPADS), which is always the first Wednesday in October. This data is used to determine the percentage increase or decrease in enrollment between any two grades. For example, if 100 students were certified as enrolled in ninth grade in 2022-23 and that number increased to 104 in 10th grade in 2023-24, the cohort survival rate would be 104%, or a ratio of 1.04. These ratios are calculated between each pair of grades over several years. Such ratios are key factors that contribute to the reliability of the projections and depend on the validity of the initial data. Each ratio collectively encompasses the variables that could account for an increase or decrease in the size of a grade cohort as it progresses over time. The district’s 2025-26 enrollment projection was based on early registration counts, as of March 17, and a three-year weighted cohort survival factor. Within the early registration counts was a transitional kindergar- ten (TK) count of 735. Had the TK enrollment materialized, it would have been a significant increase com- pared to the prior year’s enrollment of 476. The base year projection, 2025-26, is the final year of TK implementation. For the 2025-26 school year, all children who have their fourth birthday by September 1 of the school year may register to be enrolled in TK. In direct comparison, the fourth birthday eligibility date for 2024-25 was June 2. In addition, children are not required to attend TK; however, school districts are required to provide TK within the district to age-el- igible children per EC 48000(c)(1). The birthday eligibility date has shifted every year since the program’s inception in 2012-13. Per local processes, new students are assigned to their home school at the start of elementary, middle school and high school. In cases where space is unavailable at the home school, the district will assign the student to another school. The district offers intra-district transfers between schools via a formal transfer process, pending space availability at the desired school. Some schools have waitlists. Once approved, stu- dents may remain at the chosen school without needing to reapply each year, unless they wish to transfer again. Historically, TK placement was not a home school assignment and did not give priority for kindergarten placement. For full implementation in 2025-26, the district changed practice and began using TK place- ment in determining the home elementary school assignment. Students were enrolled in their home school and then submitted an intra-district request, per the standard process. The district believes the inflated TK registration counts may be related to the community’s intra-district culture. Parents registered their children for TK as it presented an additional opportunity to request an intra-district transfer to their desired school. Then when the district was unable to grant all intra-district requests for TK, parents opted their children out. TK enrollment has been difficult to project across the state for many school districts due to the implemen- tation schedule and opt-in structure. With final implementation in 2025-26, eligibility will be stabilized. However, local projections may continue to be complicated due to the opt-in option in combination with the intra-district culture. The district may wish to revise its projection processes to account for this local behav- ior. For example, developing historical counts of students with withdrawn TK registration and applying that information to historical registration counts to develop a ratio can create a useful metric that can be applied to early registration counts to develop a more reasonable projection with earlier registration data. FCMAT’s 2025-26 enrollment projection of 13,004 is based on early census data from late September, as provided by the district. This information was unavailable at the time adopted budget was developed by the district. FCMAT concurred with the projection methodology, applying the three-year weighted cohort sur- vival method in FCMAT’s Projection-Pro tool, and estimating TK and kindergarten will remain stable at full implementation. FCMAT’s projection contained no local adjustments to the results of the standard method- ology because none was provided by the district. Common information sources used to modify the results Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 6 Findings and Recommendations Enrollment, Unduplicated Pupils, and Average Daily Attendance of standard methodologies and customize a projection for local use include: local birth rates, residential development and changes to local industry. The anomalies of 2020-21 and 2021-22 caused by the COVID-19 pandemic made using a five-year cohort survival method unreliable. To account for these irregularities, FCMAT used a three-year historical average to project enrollment. Summary results of FCMAT’s enrollment projection can be found in Table 4. Table 4. Historical Data and FCMAT Projections of Enrollment by Grade Span, 2020-21 — 2027-28 Actual Actual Actual Actual Actual Projected Projected Projected 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Grade TK only 170 189 266 458 476 694 694 694 Grade span TK-3 4,046 3,905 3,961 4,032 4,049 4,164 4,091 4,103 Grade Span 4-6 2,848 2,850 2,821 2,885 2,858 2,846 2,803 2,709 Grade Span 7-8 2,012 1,923 1,881 1,887 1,909 1,897 1,918 1,920 Grade Span 9-12 4,399 4,328 4,293 4,246 4,152 4,097 4,055 4,091 Total Enrollment 13,305 13,006 12,956 13,050 12,968 13,004 12,867 12,823 Enrollment Increase (Decrease) -- (299) (50) 94 (82) 36 (137) (44) Percent Change -2.25% -0.38% 0.73% -0.63% 0.28% -1.05% -0.34% Source: Adapted from DataQuest, District’s 2025-26 adopted budget report and FCMAT’s MYFP. The 2024-25 financial audit was in process at the time of fieldwork, and any pending findings related to enrollment counts were unavailable. FCMAT’s projection does not include any adjustments that may result from the audit. A comparison of district and FCMAT results can be found on Table 8, Comparison of District and FCMAT Student Data Projections, 2025-26 – 2027-28, in the Local Control Funding Formula section. Unduplicated Pupil Percentage The district’s unduplicated pupil percentage (UPP) is used to determine a portion of its LCFF funding, specifically for supplemental and concentration grants. The UPP is the percentage of students identified as English learners, foster youth, or eligible for free or reduced-price meals. Each student is counted only once, even if they meet more than one of these criteria. The UPP for LCFF funding is calculated annually using a three-year rolling average of unduplicated students to total enrollment. The three-year rolling average creates stability within the calculation, and it is common not to see significant change year-to-year. Historically, the district’s UPP was stable, averaging 28.40% between 2022-23 and 2024-25. It is common for districts to use a weighted average of historical identification counts, known as the undu- plicated pupil count (UPC), as the basis of the UPP projection. In 2024-25, the district modified its data collection process of students eligible for free or reduced-price meals to minimize false positive identifica- tions. Consequently, the 2024-25 identification count decreased. The district used the new rate generated by the lower count to project the UPP in subsequent years. The three-year rolling average will gradually implement the full impact of the change over a three-year period, with the full impact of the new 23.90% identification rate first projected in 2026-27. Under these circumstances, FCMAT concurs with the use of the new single-year historical rate to project future identification counts until additional history collected under the new process is available. The sin- Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 7 Findings and Recommendations Enrollment, Unduplicated Pupils, and Average Daily Attendance gle-year assumption was applied in the Projection-Pro software to create FCMAT’s UPC projection. And the UPC value was entered into FCMAT’s LCFF Calculator to generate the UPP projection. The negative variance between the district’s and FCMAT’s UPC projections is due to the use of updated enrollment estimates unavailable to the district at budget adoption, as discussed in the Enrollment section. There is no variance between the district’s and FCMAT’s UPP projection. Summary results of FCMAT’s UPC and UPP can be found in Table 5. Table 5. Historical Data and FCMAT Projections of Unduplicated Pupil Count (UPC) and Unduplicated Pupil Percentage (UPP), 2020-21 — 2027-28 Actual Actual Actual Actual Actual Projected Projected Projected 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Enrollment 13,305 13,006 12,956 13,050 12,968 13,004 12,867 12,823 Ratio 26.54% 25.03% 33.61% 27.04% 23.90% 23.90% 23.90% 23.90% UPC 3,531 3,255 4,354 3,529 3,099 3,108 3,075 3,064 UPP --* --* 28.39% 28.59% 28.21% 24.97% 23.90% 23.90% Sources: DataQuest, Principal Apportionment Exhibits and FCMAT’s MYFP. *Note: The FCMAT MYFP projection did not include the 2020-21 or 2021-22 UPP rates. The 2024-25 financial audit was in process at the time of fieldwork, and any pending findings related to UPP were unavailable. FCMAT’s projection does not include any adjustments that may result from the audit. A comparison of district and FCMAT results can be found on Table 8, Comparison of District and FCMAT Student Data Projections, 2025-26 – 2027-28, in the Local Control Funding Formula section. Average Daily Attendance Average daily attendance (ADA) is the calculated relationship between the number of student attendance days in a school year divided by the total number of instructional days. School district LCFF apportion- ments can be based on the greater of the current, prior or the average of the three most recent prior years’ second reporting period (P-2) ADA. P-2 ADA is calculated using student attendance from the first day of school through the last school calendar month ending on or before April 15. One method to project ADA is to use the relationship between enrollment and P-2 ADA. Similar to the methodology introduced in the Unduplicated Pupil Percentage section, the weighted average ratio of his- torical years is calculated and then applied to projected enrollment. During the COVID-19 pandemic, the state made several temporary changes to how ADA was reported and funded. For the 2019-20 school year, the second and annual attendance reporting periods were adjusted to include full school months from July 1, 2019, through the last month ending on or before February 29, 2020, inclusive. For 2020-21 funding purposes, the state allowed LEAs to use 2019-20 ADA as a proxy for 2020-21 ADA. These temporary changes created an issue with using 2020-21 as a historical reference year to determine the ratio. The district experienced decreased attendance rates for enrolled pupils following the COVID-19 pandemic. In 2019-20, the TK-12 ratio of enrollment to ADA for the district was 96.1603%. Post-pandemic, the ratio has been as low as 93.8919% in 2022-23 and slowly grown to 94.3834% in 2024-25. While 94.3834% rep- resents the ratio for all grades, ratios can be monitored separately by grade span. For example, the lowest ratio in 2024-25 was 93.0829% in grades 9-12, and the highest ratio was 95.2635% in grades 4-6. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 8 Findings and Recommendations Enrollment, Unduplicated Pupils, and Average Daily Attendance At adopted budget, the district’s ADA projection applied the prior year districtwide ratio of 94.3% to all grade spans in 2025-26, and a slight increase to 94.4% in 2026-27 and 2027-28. This rate matches the district’s most recent historical fiscal year, 2024-25. While it is common to apply a weighted average of mul- tiple historical years, the district’s recent history demonstrates an upward trend post-pandemic. Applying a multiyear weighted average would result in an overly conservative projection rate. FCMAT concurs with the use of the single historical year’s ratio. The negative variance between the dis- trict’s and FCMAT’s ADA projections is due to the use of updated enrollment estimates unavailable to the district at budget adoption, as discussed in the Enrollment section, and the application of individual grade span ratios with no projected rate growth. Summary results of FCMAT’s ADA by grade span can be found in Table 6. Table 6. Historical Data and FCMAT Projections of ADA, 2020-21 — 2027-28 Actual Actual Actual Actual Actual Projected Projected Projected 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Grade TK (only) Enrollment 170 189 266 458 476 694 694 694 Ratio -- -- 86.48% 86.76% 93.16% 93.16% 93.16% 93.16% ADA -- -- 230.04 397.36 443.45 646.54 646.54 646.54 Grades TK-3 Enrollment 4,046 3,905 3,961 4,032 4,049 4,164 4,091 4,103 Ratio 101.33% 95.12% 93.18% 94.06% 94.85% 94.85% 94.85% 94.85% ADA 4,099.79 3,714.54 3,690.86 3,792.41 3,840.39 3,949.47 3,880.23 3,891.61 Grades 4-6 Enrollment 2,848 2,850 2,821 2,885 2,858 2,846 2,803 2,709 Ratio 99.73% 96.61% 94.61% 95.60% 95.26% 95.26% 95.26% 95.26% ADA 2,840.17 2,753.31 2,669.03 2,758.04 2,722.63 2,711.20 2,670.24 2,580.69 Grades 7-8 Enrollment 2,012 1,923 1,881 1,887 1,909 1,897 1,918 1,920 Ratio 102.48% 96.44% 93.82% 95.03% 94.91% 94.91% 94.91% 94.91% ADA 2,061.83 1,854.58 1,764.74 1,793.16 1,811.82 1,800.43 1,820.36 1,822.26 Grades 9-12 Enrollment 4,399 4,328 4,293 4,246 4,152 4,097 4,055 4,091 Ratio 95.32% 96.85% 94.11% 92.36% 93.08% 93.08% 93.08% 93.08% ADA 4,193.33 4,191.63 4,040.01 3,921.72 3,864.80 3,813.61 3,774.51 3,808.02 Grades TK-12 Enrollment 13,305 13,006 12,956 13,050 12,968 13,004 12,867 12,823 Ratio 99.17% 96.22% 93.89% 93.99% 94.38% 94.39% 94.39% 94.38% ADA 13,195.12 12,514.06 12,164.64 12,265.33 12,239.64 12,274.71 12,145.34 12,102.58 ADA Increase (Decrease) -- (681.06) (349.42) 100.69 (25.69) 35.07 (129.37) (42.76) Percent Change -5.16% -2.79% 0.83% -0.21% 0.29% -1.05% -0.35% Sources: DataQuest, Principal Apportionment Exhibits and FCMAT’s MYFP. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 9 Findings and Recommendations Enrollment, Unduplicated Pupils, and Average Daily Attendance The 2024-25 financial audit was in process at the time of fieldwork, and any pending findings related to ADA were unavailable. FCMAT’s projection does not include any adjustments that may result from the audit. A comparison of district and FCMAT results can be found on Table 8, Comparison of District and FCMAT Student Data Projections, 2025-26 – 2027-28, in the Local Control Funding Formula section. Recommendations The district should: 1. Collect local population data and modify enrollment standard methodology results to create more accurate enrollment projections. 2. Collect data on TK registration versus enrollment trends, then update the TK enrollment projection process to produce a more reasonably accurate projection. 3. Project ADA with individual grade span ratios rather than a single districtwide ratio. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 10 Findings and Recommendations Multiyear Financial Projection Assumptions Multiyear Financial Projection Assumptions FCMAT’s MYFP used the district’s 2025-26 adopted budget as the baseline for its projections and included the impact of the state’s 2025-26 enacted budget. The study team reviewed district records, interviewed district staff, and examined various financial documents to gather the necessary information for the MYFP. Assumptions were based on conservative economic factors and estimates, described by major revenue and expenditures categories in line with the object code structure. In developing its MYFP, FCMAT used Projection-Pro to update each separate funding resource for the base year and subsequent fiscal years. The key planning factors and budget assumptions used in FCMAT’s MYFP were based on the latest information available at the time the projection was completed, as shown in Table 7 below, and further described in the following paragraphs. The assumptions were based on infor- mation and figures from the district and various statewide sources such as the DOF, CDE, SSC, and other commonly used resources. These figures are fluid and subject to change. The district’s 2025-26 adopted budget and MYFP incorporated some of the same projection factors used by FCMAT. However, FCMAT also used updated California Consumer Price Index (CPI) figures based on more recent economic data. The best practice is to update budgets and MYFPs often, at least at each finan- cial reporting period, using the most recent assumptions to produce the most accurate projections. Table 7. FCMAT MYFP Budget Assumptions, 2025-26 — 2027-28 Description 2025-26 2026-27 2027-28 Statutory COLA (DOF) 2.30% 3.02% 3.42% LCFF COLA 2.30% 3.02% 3.42% State Categorical COLA 2.30% 3.02% 3.42% Federal COLA 0.00% 0.00% 0.00% California CPI 3.09% 2.82% 2.72% California Lottery, Unrestricted per ADA $190 $190 $190 California Lottery, Restricted per ADA (Proposition 20) $82 $82 $82 Mandate Block Grant, District (TK-8), per ADA $39.09 $40.27 $41.65 Mandate Block Grant, District (9-12), per ADA $76.48 $78.79 $81.48 Interest Rate Trend for 10-Year Treasuries 4.50% 4.36% 4.40% CalSTRS Employer Rate 19.10% 19.10% 19.10% CalPERS Employer Rate 26.81% 26.90% 27.80% Certificated Staff Step & Column 1.50% 1.50% 1.50% Classified Staff Step 2.00% 2.00% 2.00% Health & Welfare Percent Change 0.00% 0.00% 0.00% State Unemployment Insurance Rate 0.05% 0.05% 0.05% Workers' Compensation Insurance Rate 1.90% 1.90% 1.90% District Indirect Cost Rate 4.24% 3.73% 3.73% Sources: FCMAT, DOF, CDE, SSC and district-provided data. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 11 Findings and Recommendations Multiyear Financial Projection Assumptions Revenues Projected revenue was based on validated funding from the CDE, School Services of California (SSC) Dartboard, grant letters, historical receipts and analysis of district estimates for any sources that could not be independently verified. Adjustments were made for any one-time or carryover funds from previ- ous years, including as contained in the unaudited actuals report approved by the governing board on September 9, 2025. Adjustments made to the 2025-26 base year budget net $9,398,592, or 4.55% of the revenue budget. Of this total amount, unrestricted revenues were increased by $822,300, and restricted revenues were increased by $8,576,291, or 0.52% and 18.22% of the respective budgets.. Local Control Funding Formula Sources The LCFF is the primary funding source for school districts. The LCFF provides the following: • A base grant per ADA that varies by grade level. • A grade span adjustment of 10.4% of the TK-3 base grant and 2.6% of the 9-12 base grant. • A TK add-on rate per current year ADA. • A supplemental grant that provides an additional 20% of the base grant, multiplied by the school district’s UPP. • A concentration grant that provides an additional 65% of the base grant, multiplied by the school district’s UPP exceeding 55% of total enrollment. (The district does not receive con- centration funding because its UPP is below 55%). Base grant, grade span adjustment and TK add-on funding are cumulatively apportioned based on the ADA of specific grades. For example, one TK ADA would yield base grant funding at the TK-3 rate, grade span adjustment funding at the TK-3 rate, and TK add-on funding. Whereas one 4th grade ADA would yield only base grant funding at the 4-6 rate. In FCMAT’s 2025-26 ADA projection, the enrollment update accounts for a related net loss of 115.05 TK-12 ADA compared to the district’s original adopted budget estimate. The different methodology, using a single ratio across TK-12 ADA or separate grade span ratios, accounts for a minor net increase of 11.94 TK-12 ADA. Table 8 provides a summary comparison of district and FCMAT LCFF enrollment, UPP and ADA student pro- jections. As discussed in the Enrollment and Average Daily Attendance sections, the major difference is the availability of updated enrollment information, which impacts both enrollment and average daily attendance projections. Table 8. Comparison of District and FCMAT Student Data Projections, 2025-26 – 2027-28 2025-26 2025-26 2026-27 2026-27 2027-28 2027-28 District FCMAT District FCMAT District FCMAT Enrollment 13,145 13,004 13,026 12,867 13,014 12,823 Difference Over (Under) (141) (159) (191) Percent Difference -1.07% -1.22% -1.47% UPP (three-year average %) 23.90% 23.90% 23.90% 23.90% 23.90% 23.90% Difference Over (Under) 0.00% 0.00% 0.00% Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 12 Findings and Recommendations Multiyear Financial Projection Assumptions 2025-26 2025-26 2026-27 2026-27 2027-28 2027-28 District FCMAT District FCMAT District FCMAT Percent Difference 0.00% 0.00% 0.00% ADA 12,395.72 12,274.71 12,296.50 12,145.34 12,285.18 12,102.58 Difference Over (Under) (121.01) (151.16) (182.60) Percent Difference -0.98% -1.23% -1.49% Sources: District’s LCFF Calculator for 2025-26 adopted budget and FCMAT’s MYFP. Table 9 contains a summary comparison of major LCFF assumptions between the district and FCMAT’s projections. In addition to the availability of updated enrollment information, the state 2025-26 budget included an increase to the TK add-on funding rate to support reducing the student-to-adult ratio to 10-to-1. The net LCFF funding adjustment for each projected year is less than +/-.20%. Table 9. FCMAT and District LCFF Calculator Projections, 2025-26 — 2027-28 2025-26 2025-26 2026-27 2026-27 2027-28 2027-28 District FCMAT District FCMAT District FCMAT LCFF COLA 2.30% 2.30% 3.02% 3.02% 3.42% 3.42% Funded ADA 12,395.72 12,274.71 12,395.71 12,274.71 12,308.47 12,219.90 3-Prior Year 3-Prior Year LCFF ADA Funding Method Current Year Current Year Prior Year Prior Year Average Average Transitional Kindergarten Add-on Rate per ADA $3,148 $5,545 $3,243 $5,712 $3,354 $5,907 Transitional Kindergarten ADA 692.37 646.54 692.37 646.54 692.37 646.54 Total LCFF Entitlement $152,870,510 $152,746,230 $157,156,336 $157,025,281 $161,386,652 $161,682,986 Funding Difference Over (Under) ($124,280) ($131,055) $296,334 Percent Change -0.08% -0.08% 0.18% Sources: District’s LCFF Calculator and FCMAT LCFF Calculator. Recommendations None Federal Revenue FCMAT reviewed, verified, and adjusted federal funding amounts for the base year 2025-26 where possi- ble and appropriate. New information from 2025-26 award and allocation notifications and 2024-25 unau- dited actuals were incorporated. The best practice is to regularly update the district’s revenue estimates as entitlement allocations and grant amounts are finalized, ensuring that budgeted revenues align with the most recent funding allocation schedules. Carryover or unearned revenues from prior years should not be included in the current year budget until the prior year unaudited actuals are completed and should be eliminated from the subsequent years of the MYFP. Including estimates of carryover or unearned revenues before those amounts are known may result in overbudgeting and overspending. The district’s practice is in alignment with the best practice and indicated carryover and unearned revenues would be updated at first interim. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 13 Findings and Recommendations Multiyear Financial Projection Assumptions Aside from the multiyear Magnet Schools Assistance Program, these adjustments resulted in only slight variances compared to the district’s projections. Overall, FCMAT increased 2025-26 federal revenues by a total of $1,334,458, as described below. • Applied $203,969 total of carryover to Title I Part A, Title IV Part A and Title III English Learner Student Program. • Reduced Title I Part A, Strengthening Career and Technical Education for the 21st Century, Title II Part A, Title IV Part A, Title III Immigrant Student Program and Title III English Learner Student Program by a total of $123,617 due to CDE’s most recent allocation notifications. • Increased federal special education program funds by $98,307 to reflect the most recent Tri-Valley Special Education Local Plan Area (SELPA) revenue allocation. • Increased Indian Education Formula Grant by $1,401 for 2025-26 revenue per the grant award notification. • Increased School-Based Mental Health Services Grant Program by a combined $21,153 for prior carryover and 2025-26 revenue per the grant award notification. • Increased Magnet Schools Assistance Program by $1,133,245 for prior carryover and 2025- 26 revenue per the grant award notification. In April 2025, the U.S. Department of Education notified the district that it was canceling the five-year School-Based Mental Health Services Grant Program funding as of December 31, 2025. The district filed an appeal, which was subsequently denied. The district indicated there is a pending court case that may alter the outcome. The district has not developed a plan to alternatively fund the program should the grant be canceled, nor has it taken action to discontinue the services. For purposes of the multiyear projection, FCMAT assumed the funding to continue as provided on the grant award notification and services as ongo- ing. Should funding be canceled, the district will need to develop an alternative funding plan or modify ser- vices. Estimated funding loss for the program is between $3 million and $4 million total through December 31, 2027. Shortly prior to fieldwork, the U.S. Department of Education requested the district to make additional asser- tions as a condition to continue receiving its federal magnet school grant after September 30, 2026. As of fieldwork, the district had not yet determined its action, and response to the request was pending. The five- year grant was originally awarded through September 30, 2027. For purposes of the multiyear projection, FCMAT assumed the funding to continue as provided on the grant award notification and services as ongo- ing through the same period. Estimated funding loss for the program is between $566,419 and $6 million total through September 30, 2027. The large variance is due to the availability of prior carryover throughout the grant award period. Should funding be canceled, the district will need to develop an alternative funding plan or modify services. Adding carryover revenue to a new year’s budget is a major step in updating the budget at first interim. The district’s accounting records did not fully identify all types of carryover, requiring FCMAT to reconcile mul- tiple years of historical data to identify the true carryover update for revenues. This is especially important for federal revenues, which often have fiscal years that do not align to the state and local fiscal year ending June 30. During the unaudited actuals preparation, modifying the resource reconciliation process to more accurately identify prior year carryover revenue from current year revenue would allow the district to clearly identify the three types of carryover revenues (i.e. unearned revenues, accounts receivables, and revenues yet to be earned and received) in preparation for the first interim update. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 14 Findings and Recommendations Multiyear Financial Projection Assumptions Recommendations The district should: 1. Develop alternative funding sources or service modification plans should funding be discontinued for federal mental health and magnet grants. 2. Modify the revenue reconciliation unaudited actuals process to more accurately identify prior year and current year revenue and more clearly calculate unearned revenues, accounts receivables, and revenues yet to be earned and received. Other State Revenue FCMAT confirmed other state revenue amounts for 2025-26 using available schedules from the CDE, grant award letters and results of the 2024-25 unaudited actuals, resulting in a net increase of $4,414,756 in state revenues, as described below: • New revenues of $4,023,086 are due to three new programs, announced after the adopted budget period: Student Support and Professional Development Discretionary Block Grant (SSPDDBG), Literacy Screenings, and the Restorative Practice Grant Program. • Revised revenues of $697,968 for updated award letters. • Revised carryover revenues of $348,379 per 2024-25 unaudited actuals. • Reduced calculated revenue estimates of net $654,677 based on updated assumptions for Home-to-School Transportation, unrestricted and instructional materials lottery programs, assessment apportionments and the Expanded Learning Opportunities Program (ELOP). Home-to-School Transportation estimates for 2025-26 were increased by $120,051 based on the district’s ability to be reimbursed 60% of prior year expenditures. Subsequent year expenditures were increased by the consumer price index (CPI) and the revenue was adjusted accordingly. The district’s MYP projected 2025-26 revenue consistent with the 2024-25 revenue estimate, calculated an update to the 2026-27 reve- nue estimate, and held 2027-28 revenue consistent with 2026-27. In the advanced apportionment certification letter, dated July 18, 2025, the CDE estimated that the state’s ELOP budget allocation for was insufficient to meet the minimum Rate 2 target of $1,575. Administration has indicated plans to stabilize Rate 2; however, additional information is not available. FCMAT estimates are based on the funded Rate 2 value of $1,280.21. Should sufficient budget be allocated, FCMAT’s estimates an additional $545,480 in 2025-26 ELOP revenue, assuming all other factors remain constant. For subsequent year projections, one-time revenues and carryover funds were removed in the follow- ing programs: SSPDDBG, Literacy Screenings, Restorative Practice Grant Program, Learning Recovery Emergency Block Grant (LREBG), Early Education: Universal Prekindergarten Planning and Implementation Grant (UPK), Golden State Pathways Program and Strong Workforce. Other prior year adjustments were reversed from the Unrestricted and Restricted Lottery Programs. LREBG has been treated as a one-time revenue source in FCMAT’s projection because funding is not guaranteed although there is intent language to restore additional funding in 2026-27 and 2027-28. For all other subsequent year state revenues, FCMAT carried forward 2025-26 revenues and adjusted for COLA, enrollment, and ADA projections as appropriate. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 15 Findings and Recommendations Multiyear Financial Projection Assumptions Recommendations The district should: 1. Ensure other state revenue projections are developed based on the district’s enrollment, ADA or expenditure projections as appropriate. Other Local Revenue The district receives local revenues from a variety of sources, including grants, parcel taxes, redevelopment funds, leases and rentals, interest earnings, donations, SELPA pass-through payments, and other miscella- neous sources. FCMAT reviewed the district’s budgeted amounts for reasonableness by comparing them to grant award notifications, actual revenue received to date, or, if information otherwise was unavailable, actual revenues from prior years. Based on this analysis, FCMAT increased other local revenue by a net $3,773,657, as detailed below. • ELOP tuition, yearbook, Medi-Cal billing, and student activity fundraising accounts were increased by $2,738,869 in 2025-26 per actual receipts. $1,850,960 is due to Medi-Cal bill- ing receipts in 2025-26, a reimbursement program with inconsistently distributed revenues. Student activity fundraising accounts were increased by $746,336 in alignment with actual 2025-26 receipts. • Other miscellaneous unrestricted revenues were increased by $200,000 based on 2024- 25 revenues and actual 2025-26 receipts. Examples include but are not limited to Costco rebate, toner recycling program, lost book fees, and stale dated warrants. • Parcel tax estimates were updated by $67,482 per Francisco and Associate estimates dated September 18, 2025. • Redevelopment funds not subject to LCFF deduction was increased by $30,950 based on 2024-25 receipts. • Increased special education program funds by $14,684 to reflect the most recent Tri-Valley SELPA revenue allocation. • Sale of equipment and supplies were updated by $8,600 per actual 2025-26 receipts. • Associated student body (ASB) pass-through revenues were increased by $7,487 per actual 2025-26 receipts. • Local grants were adjusted by a net $4,866 per local agreements, including Student Behavioral Health Incentive Program (SBHIP) and Housing and Homelessness Incentive Program (HHIP). Most recurring revenues are treated as ongoing for subsequent year projections, like interest earnings; parcel taxes; community redevelopment funds; SELPA pass-through revenues; and leases and rentals. Interest earnings are adjusted according to changes in the interest rate for 10-year treasuries. SELPA pass- through revenues are adjusted with the state COLA in subsequent years. Medi-Cal Billing estimates were reduced to align with annual historical receipts based on the prior years. One-time local grants (i.e., SBHIP, HHIP, Project Build, Wellness Coach Employee Supplemental Grant, Mental Health Student Services Act) were adjusted per local agreement documentation. Other revenues that are nonrecurring, like donations, are reduced or eliminated in subsequent years. Although these revenues create a noticeable variance between adopted budget and unaudited actuals in Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 16 Findings and Recommendations Multiyear Financial Projection Assumptions historical years, the best practice is to conservatively project revenues without an ongoing commitment as they are received. The district’s adopted budget multiyear projection follows this practice. FCMAT’s multi- year projection materially follows this practice with the exception of budgeting $40,000 in minimum year- book revenues based on historical receipts. The district tracks other state, federal and local grants using different coding conventions in its general ledger. Federal grants are identified by resource code, while local and state grants are tracked by cost centers with a shared resource code. This practice makes the process of reviewing and updating grant bud- gets inconsistent, which may lead to an inaccurate budget. Local revenues contain numerous local grants. Consolidating the practice of recording grant activity to locally defined resources will make the budgeting process more efficient and protect more strongly against potential errors. Recommendation The district should: 1. Track grants consistently using a locally defined resource code. Expenditures FCMAT reviewed the district’s 2025-26 adopted general fund expenditures budget for reasonableness comparing the base year projections to the prior two years’ actual expenditures, grant agreements, and expenditure and encumbrance activity through September 2025.4 In general, FCMAT’s MYFP assumes that the ongoing costs expensed or transferred in the district’s 2024-25 unaudited actuals report will continue unless adjusted as noted below. When appropriate, the most current CPI inflation factor should be applied to both unrestricted and restricted expenditures (books and supplies and services and other operating expense categories) by fund- ing resource. The district’s 2025-26 adopted MYFP applied the state’s May Revision CPI inflation factors of 3.42% for 2025-26, 2.82% for 2026-27 and 2.77% for 2027-28 to the following unrestricted operating expenses: insurance, utilities, telephone and cell phones. While these were the most recent CPI factors at the time, the district did not apply CPI to all other budgets for books and supplies and services and other operating expense categories in year two and year three. FCMAT’s MYFP applied the most current CPI inflation factors from the enacted state budget (2.82% for 2026-27 and 2.72% for 2027-28) to all unrestricted general fund expenditures except salaries and benefits. In year two (2026-27) of the district’s adopted MYFP, the district included a one-time budget reduction of $600,0000 on line B10 (other adjustments) to meet the state minimum reserve requirements for the second and third year. Line B10 on the CDE’s SACS Form MYP is used to account for any additional adjustments that are not yet classified under the other major object code categories. The district started to meet with its Budget Advisory Committees in August 2025 to ensure that the district meets its minimum reserve require- ments in the two subsequent years. As stated earlier in the Multiyear Financial Projection section, it is best practice to prepare MYFP’s by reve- nue source at the resource code level. It did not appear that the district’s MYFP was developed by resource code level. FCMAT prepared its MYFP by revenue source at the resource code level using its Projection-Pro software. 4 The CSAM defines an encumbrance as “a commitment in the form of a purchase order or offer to buy goods or ser- vices.” The encumbrance account in a general ledger tracks open purchase orders to prevent overspending of a budget account. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 17 Findings and Recommendations Multiyear Financial Projection Assumptions Salaries The district uses the Escape financial system, hosted by the Alameda County Office of Education, for posi- tion control and to maintain salary and benefit data for regular permanent positions and to budget nonreg- ular pay (e.g., overtime, substitutes, extra duty). The district uses Escape to integrate position control data with budget and payroll. For budget monitoring, the best practice is to reconcile position control with budget and payroll at least at each fiscal reporting period (e.g., first interim, second interim, and estimated actuals). Interviews suggest the reconciliation process has not been consistent for data maintained between the Human Resources and Business Services departments. This process helps ensure that salary and benefit encumbrances and budgets are accurate. Staff suggested that the district is working to strengthen its position control, payroll and budget monitoring processes. FCMAT used various documents to evaluate the reasonableness of the district’s budgeted 2025-26 salary and benefit information. The district provided position control and budget reports from Escape that matched the adopted budget. In addition, FCMAT obtained monthly lists of personnel recommen- dations — which include information on employee new hires, temporary new hires, voluntary/involun- tary transfer, reassignments, promotions, and leaves — from the district’s board meeting documenta- tion. In addition to these documents, FCMAT relied on payroll and encumbrance activity recorded in Escape through September 2025 and 2023-24 and 2024-25 historical data to review and reconcile the salaries and benefits for the base year, 2025-26. FCMAT transferred ongoing salaries and benefits – totaling about $1.1 million in 2026-27 and $1.03 million in 2027-28 - from expired restricted programs to the unrestricted general fund. Using one-time resources to pay for ongoing costs, like personnel costs, can mask a structural deficit and erode a school district’s general fund balance. If a school district plans to temporarily use one-time revenues for ongoing expenses, it should develop a board-approved plan to fund these costs when the funding source expires or eliminate the costs altogether. In 2024-25, the district and the Livermore Education Association agreed to a one-time $700 health and welfare payment, restructured the salary schedule, then removed column A, shifting affected staff to column B. Also in 2024-25, the district settled with its classified bargaining units, Classified Schools Employee Association (CSEA) and Service Employees International Union (SEIU) for a 0.51% one-time off-schedule payment effective July 1, 2024. In addition, the board approved an additional step on the classified salary schedules and the reclassification of two positions, library media specialist and executive assistant to the principal. Due to the timing of the agreements, the classified settlements were not included in the district’s 2025-26 adopted budget. The CSEA 0.51% one-time off-schedule payment was expensed in 2024-25. The disclo- sure of collective bargaining agreement documents for these settlements indicate that the salary increases will increase deficit spending and that they will be paid for with reserves, which is a one-time source of funds. As previously discussed, paying for ongoing costs with one-time sources of funds should be avoided and will result in an erosion of unrestricted ending fund balances. FCMAT adjusted the district’s 2025-26 budget to include the costs of the remaining settlements as noted below. The district board approved a two-year settlement totaling about 13% for all bargaining groups and staff for 2022-23 and 2023-24, plus salary schedule restructures and one-time payments for 2024-25 and 2025-26. The district has not settled with all its bargaining groups for 2025-26; the Livermore Education Association and SEIU remain unsettled for 2025-26. No adjustments have been included in FCMAT’s MYFP to account for related future settlements. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 18 Findings and Recommendations Multiyear Financial Projection Assumptions As negotiations for 2025-26 continue, it is important to quantify the effects of “me too” clauses in the agreements of other bargaining groups. For example, if one bargaining group negotiates a better pay increase or benefit than other bargaining group, projections must carefully consider the language in each agreement to determine the impact of applying the increase or benefit to the other groups without separate negotiations. The “me too” clauses are designed to keep compensation fair across groups, but they can increase costs quickly when one agreement triggers changes in others. Certificated Salaries FCMAT decreased the total certificated salaries for 2025-26 by a net amount of $240,775. This adjustment included an increase of $146,199 in the restricted general fund budget and a decrease of $386,974 in the unrestricted general fund budget. The changes reflect new hires, retirements, resignations, payroll activity and projected encumbrance bal- ances through September 2025, and the reallocation of salaries from restricted funding sources in other budget categories such as transfers of direct costs. FCMAT transferred ongoing certificated salaries to the unrestricted general fund from the following grant resources that were expiring below. • Total of $855,313 in teacher, pupil support, supervisor and administrative, and other certif- icated salaries from the following resources in 2026-27: UPK, Educator Effectiveness, A-G Access and Learning Loss Mitigation grants, and Wellness Coach Employee Supplemental grant. • Total of $750,606 in teacher, pupil support, supervisor and administrative salaries from the following grants in 2027-28: School Based Mental Health Services, Dual Enrollment, and Project Build. In the base year and two subsequent years, FCMAT shifted a combined $2.1 million from the transfer of direct costs budget category (object 5710) to teacher salaries in Lottery and Education Protection Account (EPA) funding. Previously, the district used object 5710 to record estimated employee compensation costs before reallocating them to salary and benefit accounts in Lottery and EPA at year end. The best practice is to budget for known compensation costs directly in salary and benefit accounts to accurately reflect true expenses. The team increased certificated salaries by 1.5% in the subsequent years of the projection, based on the certificated employee step-and-column data provided by the district. This adjustment is consistent with the district’s adopted budget estimate of 1.5% used for certificated staff, management, and supervisor salaries. Classified Salaries FCMAT increased the total classified salaries for 2025-26 by a net amount of $1,167,391. This adjustment included an increase of $1,233,686 in the unrestricted general fund budget and a decrease of $66,295 in the restricted general fund budget. The major changes reflect settlement costs from negotiations, new hires, promotions, retirements, resigna- tions, actual and encumbrance balances through September 2025. FCMAT included $903,020 in estimated unrestricted general fund salary costs for the payment of the classified settlements with CSEA and SEIU as discussed above. In addition, salaries for instructional aides, including TK aides, were increased by approximately $501,000 and offset by decreases of approximately $170,821 in classified support, clerical and other salaries. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 19 Findings and Recommendations Multiyear Financial Projection Assumptions FCMAT increased classified salaries by 2% in the subsequent years of the projection, based on the team’s analysis of classified employee step data provided by the district. This adjustment is slightly lower that the district’s 2025-26 adopted budget report estimate of 2.25%. Employee Benefits FCMAT reduced the total employee benefits expenditures for 2025-26 by a net amount of $101,095. This adjustment included an increase of $171,419 in the unrestricted general fund budget and a decrease of $272,514 in the restricted general fund budget. FCMAT calculated statutory benefits in proportion to the adjusted salaries budgeted for each fiscal year. FCMAT also adjusted health-and-welfare benefits costs, decreasing them by a net total of $492,152 in 2025-26, based on actuals and encumbrances through September 2025. This adjustment included a decrease of $192,311 in the unrestricted general fund budget and a decrease of $299,841 in the restricted general fund budget. Classified retiree health-and-welfare benefits decreased by a net total of $336 in 2025-26, also based on actuals and encumbrances through September 2025. While FCMAT did not review the district’s most recent other postemployment benefits (OPEB) actuarial val- uation measured as of June 30, 2024, the district appeared to have included incremental cost changes in its MYFP. The district’s 2023-24 annual audit provided the district’s total OPEB liability from its actuarial val- uation as of June 30, 2023. The Governmental Accounting Standards Board (GASB) Statement 75 requires school districts to update their actuarial reports for OPEB every two years. Because the district funds its OPEB liability using the pay-as-you-go method, an updated OPEB actuarial report is essential for determin- ing the incremental cost changes to include in its MYFP. Books and Supplies FCMAT adjusted the 2025-26 total books and supplies expenditures for 2025-26, resulting in a net decrease of $1,062,955. This adjustment included a decrease of $41,915 in the unrestricted general fund budget and a decrease of $1,021,040 in the restricted general fund budget due to various budget adjust- ments in all programs. The major changes reflect decreases in the unrestricted general fund and the district’s Magnet Schools Assistance Program, offset by increases to Universal Prekindergarten, Strong Workforce program, and Kitchen Infrastructure and Training fund programs. FCMAT assumed the district would spend the one-time funds from the latter three grant programs by their June 30, 2026 deadline. While the district removed one-time expenditures from its general fund books and supplies budgets, it did not apply the May Revision CPI inflation factors in the subsequent years. In its MYFP, FCMAT also adjusted the subsequent years to remove any one-time expenditures (ELOP, Lottery, Universal Prekindergarten Planning & Implementation, Educator Effectiveness, Strong Workforce Program, Magnet Schools Assistance Program, Dual Enrollment Opportunities, and Other Restricted Local) and applied the CPI inflation factors from the enacted budget to all remaining books and supplies expenditures. Additionally, FCMAT reduced expenditures for books and supplies for the following restricted programs whenever the expenditure budget exceeded projected revenue: Title I, Title IV, Perkins, and Strong Workforce Program. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 20 Findings and Recommendations Multiyear Financial Projection Assumptions Services and Other Operating Expenditures FCMAT adjusted the 2025-26 total services and other operating expenditures by a net increase of $496,107. The team increased the unrestricted general fund budget by $342,288 and increased the restricted general fund budget by $153,819. The primary reasons for these adjustments are as follows. Expenditures were: • Reallocated from the services and other operating expenditures to salary and benefits for programs such as Lottery, EPA, Title II, and A-G grants. • Increased in programs such as special education, Title I, Title IV, Lottery, Arts and Music in Schools (Prop 28), and Child Nutrition (Training and Infrastructure). • Increased for grants that expire as of June 30, 2026 that include UPK, Educator Effectiveness, Strong Workforce, A-G Access and Learning Loss Mitigation, and Wellness Coach Employee Support. Similar to books and supplies, the district’s 2025-26 adopted MYFP applied the May revision CPI inflation factors after adjusting for one-time activity to its unrestricted general fund services and other operating expenditures budgets for 2026-27 and 2027-28, respectively. In the subsequent years of its MYFP, FCMAT made the following adjustments: • Removed one-time expenditures (ELOP, Title I, Title III -Immigrant Student and English Learner Student Programs, UPK, Educator Effectiveness, Strong Workforce, Mental Health- Related Services, A-G, Dual Enrollment, Magnet Schools Assistance Program, and other Local Revenues). • Transferred ongoing expenses from expired restricted programs (Mental Health, UPK, Dual Enrollment, A-G, Wellness Coach Employee Supplemental, and Project-Build) to the unre- stricted general fund. • Applied the most recent enacted budget CPI inflation factors (2.82% for 2026-27 and 2.72% for 2027-28) to all remaining services and other operating expenditures in the projection, with the exception of insurance costs. • FCMAT increased insurance costs by 10% in each projected year to align with increases to the required contribution for self-insurance for property and liability program and to account for estimated additional premiums for pending AB 218 liabilities.5 Capital Outlay FCMAT increased the total capital outlay expenditures for 2025-26 by $208,466, with $44,718 added to the unrestricted general fund budget and $163,748 added to the restricted general fund budget.6 The adjustments to the 2025-26 general fund budget include: 5 Effective January 1, 2020, AB 218 expanded the definition of childhood sexual abuse and extended the statute of lim- itations for victims to file lawsuits against their abusers. This legislation has exposed LEAs to claims for sexual assault dating back decades and created significant cost pressures for defending against these claims. 6 Capital outlay expenditures include land, land improvements, buildings, and equipment exceeding a cost threshold established by the LEA (typically $5,000). Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 21 Findings and Recommendations Multiyear Financial Projection Assumptions • Increasing budget for capital outlay for the Kitchen Infrastructure and Training Grant to pur- chase districtwide freezer and refrigerator replacements. • Increasing budget for the unrestricted general fund based on actuals and encumbrances through September 2025. FCMAT carried the base year capital outlay expenditure budgets into the subsequent fiscal years, except for the balance of Kitchen Infrastructure and Training Funds of $163,748, which is estimated to be fully spent in 2025-26. Other Outgo/Indirect Costs All programs incur general management costs, commonly referred to as indirect costs. These costs typi- cally include activities such as accounting, budgeting, payroll, personnel services, purchasing and central data processing. An indirect cost rate allows LEAs to efficiently and uniformly recover some general man- agement costs from restricted programs. The CDE establishes the maximum indirect cost rates that school districts can charge to each program. A school district may charge up to its approved indirect cost rate, unless a specific authority, such as legisla- tion, sets a lower limit. Charging each program the maximum allowable indirect cost rate promotes equity across the district, ensures general management costs are adequately supported, and establishes the true costs of each program. The 2024-25 unaudited actuals report indicates that the district charged indirect costs to most programs; however, the district did not charge indirect costs to special education programs, California Partnership Academies-Green Technology, Career Technical Education Incentive Grant, Strong Workforce Program, Arts and Music in Schools (Prop 28), Dual Enrollment Opportunities, and A-G Learning Loss Mitigation Grant. In 2025-26, FCMAT increased other outgo expenditures for indirect cost transfers by $2,207,617 in the restricted general fund. This adjustment resulted in a corresponding expenditure offset in the unrestricted general fund primarily from increased indirect cost charges to special education programs and the Routine Restricted Maintenance Account (RRMA). FCMAT applied the maximum allowable indirect cost rate for each restricted program in the base year and subsequent years to ensure accurate program cost accounting. Indirect costs were based on the CDE approved 4.24% rate for the district in 2025-26, 3.73% rate in 2026- 27 and 2027-28 from the district’s preliminary proposed indirect cost rate in its 2024-25 Unaudited Actuals SACS Form ICR. FCMAT increased other outgo expenditures (excluding indirect cost transfers) by $63,904 in the restricted general fund for 2026-27 and $130,363 for 2027-28 to reflect the required 4% increase of transfers to the Tri-Valley Regional Occupational Program compared to the district’s 2025-26 adopted budget. The base year expenditure budget includes transfers out for the retiree trust of $459,000 which were carried forward into the two subsequent years. FCMAT carried forward the base year transfers of interfund indirect costs into the unrestricted general fund from the Adult Education Fund (Fund 11), Child Development (Fund 12), and Cafeteria Special Revenue Fund (Fund 13). The team used the CDE-approved rate for the adult education, child development and child nutri- tion programs, which is the district rate of 4.24% for 2025-26. For 2026-27 and 2027-28, FCMAT applied the estimated district indirect cost rate of 3.73%. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 22 Findings and Recommendations Multiyear Financial Projection Assumptions Recommendations The district should: 1. Prepare general fund MYFPs by revenue source at the resource code level; consider using FCMAT’s Projection-Pro software. 2. Ensure that position control to budget and payroll is reconciled regularly, at least at each financial reporting period. 3. Avoid using lump sum adjustments (e.g., line B10) in the MYFP. 4. Budget known compensation costs directly in salary and benefit accounts in all resources rather than using object 5710. 5. Cease using one-time funds for ongoing costs or ensure it has a board-approved plan to fund such ongoing costs or eliminate them when one-time funds are no longer available. 6. Ensure that the current OPEB actuarial report is prepared every two years and presented to the board. 7. Charge indirect costs to each restricted program and special revenue fund at the full allowable rate, even if this results in a contribution from the unrestricted general fund. Other Financing Sources/Uses Interfund - Transfers In The district’s adopted budget includes a transfer of $10,112 from the Cafeteria (Fund 13) and $900 from the Capital Facilities (Fund 25) fund into the general fund for 2025-26 and two subsequent years to cover the estimated costs of insurance premiums (retiree trust) and student trip insurance. FCMAT assumed this same transfer in the base year and carried forward this transfer amount into 2026-27 and 2027-28. Interfund - Transfers Out The district’s adopted budget includes a $50,000 transfer from the unrestricted general fund to the Self- Insurance (Fund 67) in 2025-26, 2026-27, and 2027-28. FCMAT included this same transfer in the revised base year and carried forward this transfer amount into the two subsequent years. Contributions Restricted programs should be self-supporting, with exceptions for the routine restricted maintenance account (RRMA), special education, and other programs that the school district chooses to support with unrestricted general funds. When revenues in restricted programs do not fully cover program expenditures, the shortfall must be offset by a contribution from the unrestricted general fund to balance the budget. Because the district participates in the state’s facilities funding program, it is required to contribute unre- stricted general funds to the RRMA. The minimum required contribution is 3% of the district’s total general fund expenditures and other financing uses for each fiscal year, excluding certain restricted programs. The district’s 2025-26 report projected a contribution of $6.127 million to the RRMA. FCMAT adjusted this Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 23 Findings and Recommendations Multiyear Financial Projection Assumptions contribution to $6.140 million to align with its adjusted projected expenditures for 2025-26. FCMAT’s MYFP projects this contribution is adjusted to $6.120 million in 2026-27 and $6.498 million in 2027-28. The district’s 2025-26 adopted budget report projected a contribution of $30.981 million to special edu- cation programs in the base year. FCMAT increased this contribution to $32.617 million to align with its adjusted projected expenditures for 2025-26. The MYFP projects this contribution is adjusted to $32.880 million in 2026-27 and $33.607 million in 2027-28. Other adjustments to the district’s contributions included in the 2025-26 adopted budget include an addi- tion of $33,604 for Title II and IV programs and $20,805 for the district’s California Partnership Academies: Green Technology Partnership Academies program. When restricted program expenditures exceed projected revenues, FCMAT reduces nonsalary accounts- such as books, supplies, and services-to stay within revenue estimates. If shortfalls remain, the unrestricted general fund covers the difference. Rising costs may require further reductions in 2026-27 and 2027-28, and all programs needing contributions should be reviewed for self-sufficiency. Table 10 details unrestricted general fund contributions in FCMAT’s multiyear financial projection. Table 10. FCMAT MYFP General Fund Contributions Summary, 2025-26 — 2027-28 Adjusted Resource Base Year Projection Projection Code 2025-26 2026-27 2027-28 Unrestricted 0000 ($39,569,121) ($40,250,519) ($41,230,172) Total Unrestricted (39,569,121) (40,250,519) (41,230,172) ESSA: Title I, Part A, Basic Grants Low-Income and Neglected 3010 0 60,307 70,970 Special Ed: IDEA Basic Local Assistance Entitlement, Part B, Sec 611 3310 886,433 745,779 940,880 Special Ed: IDEA Preschool Grants, Part B, Sec 619 3315 194,079 196,541 200,900 Special Ed: IDEA Mental Health Allocation Plan, Part B, Sec 611 3327 29,389 31,029 33,610 Special Ed: IDEA Mental Health Allocation Plan, Part B, Sec 611 3345 34 0 0 ESSA: Title II, Part A, Supporting Effective Instruction 4035 16,665 20,199 24,761 ESSA: Title IV, Part A, Student Support and Academic Enrichment Grants 4127 16,939 24,632 25,678 ESSA: Title III, English Learner Student Program 4203 0 17,208 20,344 Indian Education 4510 0 815 3,350 After School Education and Safety (ASES) 6010 0 0 8,413 California Partnership Academies: Green Technology Partnership Academies 6386 20,850 22,167 23,999 Career Technical Education Incentive Grant Program 6387 747,468 868,646 935,106 Special Education 6500 31,006,585 31,430,481 31,955,919 Mental Health-Related Services 6546 18,759 0 0 Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 24 Findings and Recommendations Multiyear Financial Projection Assumptions Adjusted Resource Base Year Projection Projection Code 2025-26 2026-27 2027-28 Special Education Early Intervention Preschool Grant 6547 481,655 475,962 475,982 Agricultural Career Technical Education Incentive 7010 10,650 11,236 11,817 Restricted Maintenance Account 8150 6,139,615 6,120,005 6,498,444 Project Build - One-Time (1455) 9015 0 225,512 0 Total Restricted 39,569,121 40,250,519 41,230,172 Source: FCMAT’s MYFP. Recommendation The district should: 1. Use the MYFP, that is developed by resource level or in Projection-Pro, to identify programs by resource level that may require contributions from the unrestricted general fund in subsequent years, adjust the MYFP to account for those contributions, and act as necessary to ensure restricted programs are self-sustaining. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 25 Findings and Recommendations Multiyear Financial Projection Analysis Multiyear Financial Projection Analysis The primary purpose of an MYFP is to evaluate a school district’s long-term financial stability. When devel- oping an MYFP, a school district uses current budget assumptions to project revenues and expenditures over several years to determine whether it can maintain a balanced budget and meet the state-required minimum reserve for economic uncertainties for the base year and the two subsequent fiscal years. Key indicators of risk or potential insolvency include continued deficit spending and inadequate fund balance and reserves for economic uncertainties within the unrestricted general fund. FCMAT conducted an analysis of the district’s unrestricted, restricted, and combined general fund resources, along with expenditure categories by resource for 2025-26 and the two subsequent fiscal years. This section summarizes FCMAT’s findings and recommendations. Unrestricted General Fund Unrestricted dollars may be used for any educational purpose, providing school districts with the flexibility to support operations and priorities. FCMAT analyzed the district’s unrestricted general fund sources and expenditure categories by resource for 2025-26 and two subsequent fiscal years. The unrestricted general fund summary in Table 11 indicates that, based on current assumptions, the district is projected to end 2025-26 with a $2.850 million deficit, meaning the district is spending more money than it receives in revenue for 2025-26. The district is projected to continue its deficit spending of $2.154 million in 2026-27 and $1.704 million in 2027-28. Without revenue increases and/or expenditure reductions, the district will not meet the 3% minimum reserve requirement for economic uncertainties in the third subsequent year. Based on current assump- tions, the district is projected to be approximately $446,850 short of meeting its required minimum reserve requirement for economic uncertainty in 2027-28. A continued projected structural deficit in the unrestricted general fund threatens the district’s long-term fiscal health. Ongoing deficit spending depletes reserves, limits financial flexibility, and increases the risk of insolvency if corrective actions are not taken promptly. Table 11 summarizes FCMAT’s analysis of the district’s unrestricted general fund resources for 2025-26 and the two subsequent fiscal years. Table 11. FCMAT Unrestricted General Fund Summary, 2025-26 — 2027-28 Adjusted Object Base Year Projection Projection Description Code 2025-26 2026-27 2027-28 A. Revenues & Other Financing Sources LCFF Sources 8010-8099 $152,746,230 $157,025,281 $161,682,986 Federal Revenue 8100-8299 0 0 0 Other State Revenues 8300-8599 4,465,569 4,610,800 4,658,973 Other Local Revenues 8600-8799 3,178,136 3,138,316 3,154,107 Other Financing Sources - Transfers In 8900-8929 11,012 11,012 11,012 Contributions 8980-8999 (39,569,121) (40,250,519) (41,230,172) Total, Revenue & Other Financing Sources 120,831,827 124,534,890 128,276,906 B. Expenditures & Other Financing Uses Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 26 Findings and Recommendations Multiyear Financial Projection Analysis Adjusted Object Base Year Projection Projection Description Code 2025-26 2026-27 2027-28 Certificated Salaries 1000-1999 66,602,741 68,457,095 70,234,558 Classified Salaries 2000-2999 19,982,820 20,007,170 20,407,314 Employee Benefits 3000-3999 29,351,217 29,710,812 30,523,461 Books and Supplies 4000-4999 1,539,628 1,583,046 1,626,104 Services and Other Operating Expenditures 5000-5999 8,891,159 9,320,886 9,603,391 Capital Outlay 6000-6999 44,718 44,718 44,718 7100-7299 Other Outgo (excluding Transfers of Indirect Costs) 7400-7499 459,000 459,000 459,000 Other Outgo - Transfers of Indirect Costs 7300-7399 (3,239,316) (2,943,639) (2,967,229) Other Financing Uses - Transfers Out 7600-7629 50,000 50,000 50,000 Total, Expenditures & Other Financing Uses 123,681,967 126,689,088 129,981,317 C. Net Increase (Decrease) in Fund Balance (2,850,140) (2,154,198) (1,704,411) D. Fund Balance Beginning Fund Balance, July 1 9791 12,856,142 10,006,001 7,851,803 Audit Adjustments 9793 0 0 0 Adjusted Beginning Balance 12,856,142 10,006,001 7,851,803 Ending Fund Balance, June 30 10,006,001 7,851,803 6,147,392 Components of Ending Fund Balance Nonspendable 9710-9719 150,000 150,000 150,000 Restricted 9740 0 0 0 Committed Stabilization Arrangements 9750 0 0 0 Other Commitments 9760 0 0 0 Assigned 9780 0 0 0 Unassigned/Unappropriated Reserve for Economic Uncertainties 9789 6,406,085 6,332,607 6,444,243 Unassigned/Unappropriated 9790 3,449,916 1,369,196 (446,850) Source: FCMAT’s MYFP. Note: Minor discrepancies in reported figures are the result of rounding applied during calculations. Restricted General Fund Categorical programs and grant funds are restricted for specific activities. FCMAT analyzed all general fund restricted sources and expenditure categories by resource for 2025-26 and two subsequent fiscal years. The restricted general fund summary shown in Table 12 below indicates that, based on current assumptions, the district will end the 2025-26 fiscal year with a restricted balance of $18.922 million, which includes funding for the restricted programs identified in the table. The MYFP projects that the restricted general fund balance will further decline to $16.976 million in 2026-27 and $14.551 million in 2027-28. The district has several grant funds that are expiring within the next two years. FCMAT did not eliminate expenditures on expiring resources unless documents or interviews confirmed that they were one-time Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 27 Findings and Recommendations Multiyear Financial Projection Analysis expenditures. FCMAT reallocated the salary and benefit costs to the unrestricted general fund for the fol- lowing grants expiring within the next two years: • UPK (RS 6053) – reallocated $91,325 in salaries, $122,774 total with benefits in 2026-27. Grant expires June 30, 2026. • Educator Effectiveness (RS 6266) – reallocated $621,072 in salaries, $789,601 total with benefits in 2026-27. Grant expires June 30, 2026. • A-G Access and Learning Loss Mitigation (RS 7412 & 7413) – reallocated $127,700 in sala- ries, $162,780 total with benefits in 2026-27. Grant expires June 30, 2026. • Dual Enrollment (RS 7339) – reallocated $30,958 in salaries, $45,332 total with benefits in 2027-28. Grant expires June 30, 2027. • School-Based Mental Health Services (RS 5810, local cost center 1430) – reallocated $562,975 in salaries, $754,134 total with benefits in 2027-28. Grant set to expire December 31, 2027. FCMAT reallocated 50% of the salary and benefits costs to unrestricted general fund. • Wellness Coach and Project Build grants (RS 9010, local cost centers 1439 & 1455) – real- located $62,578 in salaries, $86,674 total with benefits in 2026-27 for the Wellness Coach grant set to expire June 30, 2026. Reallocated $156,673 in salaries, $233,562 total with benefits in 2027-28 for the Project Build grant set to expire June 30, 2028. In addition to reallocating salary and benefit costs for these resources, FCMAT reduced nonsalary expenses based on interviews and documentation provided by the district for the several grants, which include the following: • ELOP (RS 2600) – reduced $100,000 in books and supplies and $100,000 in services and other operating costs in 2026-27 for one-time expenditures spent in 2025-26. • Magnet Schools Assistance Grant (RS 5810, local cost center 1465 - reduced $1.34 million in books and supplies and $650,000 in services and other operating costs in 2026-27. Reduced an additional $44,391 in books and supplies and $33,064 in services and other operating costs in 2027-28. • UPK (RS 6053) - reduced $50,000 in books and supplies and $54,294 in services and other operating costs in 2026-27. • Educator Effectiveness (RS 6266) - reduced $16,500 in books and supplies and $552,624 in services and other operating costs in 2026-27. • Lottery (RS 6300) – reduced $1 million in books and supplies for 2026-27. • Child Nutrition Food Service Training Funds and Kitchen Infrastructure and Training Funds (RS 7029 & 7032) – reduced $52,338 in books and supplies and $72,742 in services and other operating costs in 2027-28. • Strong Workforce Program (RS 6388) - reduced $5,000 in books and supplies and $22,462 in services and other operating costs in 2026-27. • Dual Enrollment (RS 7339) – reduced $16,000 in services and other operating costs in 2026-27. • A-G Access (RS 7412) – reduced $36,241 in other operating costs in 2026-27. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 28 Findings and Recommendations Multiyear Financial Projection Analysis • HHIP and Mental Health Student Services Act (RS 9010, CC 1436 & 1437) – reduced $32,000 in books and supplies and $90,000 in services and other operating costs in 2026-27. Table 12 summarizes FCMAT’s analysis of the district’s restricted general fund resources for 2025-26 and the two subsequent fiscal years. Table 12. FCMAT Restricted General Fund Summary, 2025-26 — 2027-28 Adjusted Object Base Year Projection Projection Description Code 2025-26 2026-27 2027-28 A. Revenues & Other Financing Sources LCFF Sources 8010-8099 $1,121,501 $1,121,501 $1,121,501 Federal Revenue 8100-8299 13,265,859 7,299,647 6,051,939 Other State Revenues 8300-8599 22,470,399 17,242,532 17,171,198 Other Local Revenues 8600-8799 18,791,393 16,537,709 16,827,467 Other Financing Sources - Transfers In 8900-8929 0 0 0 Contributions 8980-8999 39,569,121 40,250,519 41,230,172 Total, Revenue & Other Financing Sources 95,218,273 82,451,909 82,402,277 B. Expenditures & Other Financing Uses Certificated Salaries 1000-1999 24,284,572 23,774,468 23,380,479 Classified Salaries 2000-2999 16,885,906 17,115,231 17,450,400 Employee Benefits 3000-3999 23,970,128 23,922,046 23,991,277 Books and Supplies 4000-4999 5,752,341 2,572,459 2,646,101 Services and Other Operating Expenditures 5000-5999 14,143,339 12,591,227 12,845,201 Capital Outlay 6000-6999 284,794 121,046 121,919 7100-7299 Other Outgo (excluding Transfers of Indirect Costs) 7400-7499 1,597,591 1,661,495 1,727,954 Other Outgo - Transfers of Indirect Costs 7300-7399 2,935,527 2,639,850 2,663,440 Other Financing Uses - Transfers Out 7600-7629 0 0 0 Total, Expenditures & Other Financing Uses 89,854,198 84,397,822 84,826,772 C. Net Increase (Decrease) in Fund Balance 5,364,075 (1,945,913) (2,424,495) D. Fund Balance Beginning Fund Balance, July 1 9791 13,557,967 18,922,042 16,976,129 Audit Adjustments 9793 0 0 0 Adjusted Beginning Balance 13,557,967 18,922,042 16,976,129 Ending Fund Balance, June 30 18,922,042 16,976,129 14,551,634 Components of Ending Fund Balance Nonspendable 9710-9719 0 0 0 Restricted 9740 18,922,042 16,976,129 14,551,634 Expanded Learning Opportunities Program 1,564,244 902,598 50,690 Special Ed: IDEA Basic Local Assistance Entitlement, Part B, Sec 611 98,307 0 0 Indian Education 249 0 0 Magnet Schools Assistance Grant (CC 1465) 2,763,445 1,678,511 0 Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 29 Findings and Recommendations Multiyear Financial Projection Analysis Adjusted Object Base Year Projection Projection Description Code 2025-26 2026-27 2027-28 Mental Health (CC 1430) 21,153 456 0 Student Support and Professional Development Discretionary Block Grant (SSPDBG) 3,832,003 3,832,003 3,832,003 Lottery - Instructional Materials 319,278 638,558 934,566 Golden State Pathways Program 1,302,469 657,909 0 Mental Health-Related Services 0 72,868 165,481 Arts and Music in Schools (AMS)-Funding Guarantee and Accountability Act (Prop 28) 234,162 207,108 151,429 Child Nutrition: Food Service Staff Training Funds 4,242 0 0 Dual Enrollment Opportunities 81,785 0 0 Classified School Employee Summer Assistance Program 0 227 227 Learning Recovery Emergency Block Grant 363,773 363,773 363,773 Other Restricted State 229,534 211,192 192,575 Ongoing & Major Maintenance Account (RRMA) 230,267 12,265 12,265 Other Restricted Local 7,877,130 8,398,660 8,848,625 Committed Stabilization Arrangements 9750 0 0 0 Other Commitments 9760 0 0 0 Assigned 9780 0 0 0 Unassigned/Unappropriated Reserve for Economic Uncertainties 9789 0 0 0 Unassigned/Unappropriated 9790 0 0 0 Source: FCMAT’s MYFP. Note: Minor discrepancies in reported figures are the result of rounding applied during calculations. The district needs to review and plan to spend the following grants by their required deadlines: • Student Support and Professional Development Discretionary Block Grant – spend by June 30, 2029. • Arts and Music in Schools (AMS)-Funding Guarantee and Accountability Act (Prop 28) – spend within three years. • Learning Recovery Block Grant – Allocation was revised, spend by June 30, 2028. Combined General Fund Table 13 summarizes FCMAT’s analysis of the district’s combined general fund resources for 2025-26 and the two subsequent fiscal years. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 30 Findings and Recommendations Multiyear Financial Projection Analysis Table 13. FCMAT Combined General Fund Summary, 2025-26 — 2027-28 Adjusted Object Base Year Projection Projection Description Code 2025-26 2026-27 2027-28 A. Revenues & Other Financing Sources LCFF Sources 8010-8099 $153,867,731 $158,146,782 $162,804,487 Federal Revenue 8100-8299 13,265,859 7,299,647 6,051,939 Other State Revenues 8300-8599 26,935,968 21,853,333 21,830,171 Other Local Revenues 8600-8799 21,969,529 19,676,025 19,981,574 Other Financing Sources - Transfers In 8900-8929 11,012 11,012 11,012 Contributions 8980-8999 0 0 0 Total, Revenue & Other Financing Sources 216,050,100 206,986,799 210,679,183 B. Expenditures & Other Financing Uses Certificated Salaries 1000-1999 90,887,313 92,231,563 93,615,037 Classified Salaries 2000-2999 36,868,726 37,122,401 37,857,714 Employee Benefits 3000-3999 53,321,345 53,632,858 54,514,739 Books and Supplies 4000-4999 7,291,969 4,155,505 4,272,205 Services and Other Operating Expenditures 5000-5999 23,034,498 21,912,114 22,448,592 Capital Outlay 6000-6999 329,512 165,764 166,637 7100-7299 Other Outgo (excluding Transfers of Indirect Costs) 7400-7499 2,056,591 2,120,495 2,186,954 Other Outgo - Transfers of Indirect Costs 7300-7399 (303,789) (303,789) (303,789) Other Financing Uses - Transfers Out 7600-7629 50,000 50,000 50,000 Total, Expenditures & Other Financing Uses 213,536,165 211,086,910 214,808,089 C. Net Increase (Decrease) in Fund Balance 2,513,934 (4,100,111) (4,128,905) D. Fund Balance Beginning Fund Balance, July 1 9791 26,414,109 28,928,043 24,827,932 Audit Adjustments 9793 0 0 0 Adjusted Beginning Balance 26,414,109 28,928,043 24,827,932 Ending Fund Balance, June 30 28,928,043 24,827,932 20,699,026 Components of Ending Fund Balance Nonspendable 9710-9719 150,000 150,000 150,000 Restricted 9740 18,922,042 16,976,129 14,551,634 Committed Stabilization Arrangements 9750 0 0 0 Other Commitments 9760 0 0 0 Assigned 9780 0 0 0 Unassigned/Unappropriated Reserve for Economic Uncertainties 9789 6,406,085 6,332,607 6,444,243 Unassigned/Unappropriated 9790 3,449,916 1,369,196 (446,850) Source: FCMAT’s MYFP. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 31 Findings and Recommendations Reserves and Unrestricted General Fund Balance Reserves and Unrestricted General Fund Balance A school district’s fund balance serves as a key indicator of its fiscal stability and capacity to meet its finan- cial obligations. Maintaining an adequate fund balance is essential for sustaining operations, addressing unexpected expenditures, and ensuring compliance with financial reporting. School districts may adopt pol- icies to maintain reserves above the minimum reserve requirement for economic uncertainties (EC 42127). Interviews indicate that the district has not implemented any policy. Since the district does not have a fund balance policy that requires it maintains a higher reserve above the state required minimum reserve for economic uncertainty, FCMAT categorized the minimum 3% reserve in its MYFP. Remaining components of ending fund balance were included in the unassigned/unappropriated category. The uncertainty of federal revenues, expiration of one-time funding, unsettled negotiations with some bar- gaining groups for 2025-26, projected deficit spending, and increasing contributions from the unrestricted general fund to special education underscores the need for a policy to maintain reserves higher than the state’s minimum requirement. Table 14 shows SSC’s data on the statewide average unrestricted general fund ending balance, for unified school districts over the past three years (expressed as a percentage of total general fund expenditures, transfers, and other uses). The district’s unrestricted general fund balance was significantly lower than the statewide average in 2020-21, 2021-22, and 2022-23. Table 14. District and Statewide Average Reserve Levels, 2021-22 — 2023-24 Unrestricted Ending General Fund Balance 2021-22 2022-23 2023-24 Livermore Valley Joint Unified School District 4.01% 3.07% 7.36% Statewide Average for Unified School Districts 22.19% 23.74% 24.36% Difference from Statewide Average -18.18% -20.67% -17.00% Sources: SSC and District’s 2021-22, 2022-23, and 2023-24 unaudited actuals reports, SACS Form 01. Note: The figures include the unrestricted general fund ending balance are expressed as a percentage of total general fund expenditures, trans- fers and other uses. FCMAT’s MYFP projected the district to deficit spend in its unrestricted general fund in all three years. The district’s structural deficit of $2.850 million in 2025-26, $2.154 million in 2026-27, and $1.704 million in 2027-28 needs to be addressed immediately because it will further reduce the unrestricted fund balance. By 2027-28, the district is no longer able to meet its required 3% minimum reserve for economic uncertain- ties and is estimated to have a $446,850 shortfall. These conditions could be exacerbated by any unan- ticipated revenue losses or unplanned expenditures. The district needs to identify additional revenues or reductions to expenditures to balance the budget to stay fiscally solvent. Recommendations The district should: 1. Develop a complete and detailed fiscal recovery plan, including a timeline to eliminate the structural deficit in the unrestricted general fund and restore reserves. 2. Establish a board-approved policy to formalize and maintain reserves above the minimum requirement for economic uncertainties and adopt a GASB 54 resolution to ensure their proper classification. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 32 Findings and Recommendations Other Funds and Recommendations Other Funds and Recommendations FCMAT reviewed all the district’s other funds to identify and assess any potential fiscal impact on the unre- stricted general fund. Significant observations are discussed below. Student Activity Special Revenue Fund (Fund 08) School districts use Fund 08 to account for associated student body (ASB) activities that do not meet the fiduciary activity criteria pursuant to GASB Statement 84 and are therefore classified as govern- mental activities. The district’s revised 2025-26 beginning balance from unaudited actuals is $677,341 in Fund 08. Based on the past two years of budget reports, the district does not present an ASB budget to its board during the year, instead recognizing actual activity at the end of the school year. ASB funds should generally be spent in the same year they are received so contributing students ben- efit and funds support current student activities as intended. According to FCMAT’s Associated Student Body Manual, ASB funds, “should be carried over only when there is a definite plan and purpose” for their use in the following year. Adult Education Fund (Fund 11) School districts use Fund 11 to account for federal, state, and local revenue for adult education programs. Livermore’s adult education program offers English classes, Adult High School Diploma, GED Preparation Classes, and career development classes for learners 18 years old and over. Since 2022-23, the district has had a deficit in Fund 11, ranging from $83,212 to $210,090. The district’s 2025-26 adopted projects a $37,250 deficit and projects a $28,406 transfer of indirect costs to the dis- trict’s unrestricted general fund. To prevent ongoing deficits that could impact the unrestricted general fund, the district should closely monitor this fund. Child Development Fund (Fund 12) Fund 12 tracks federal, state and local revenue and expenses for child development programs, including preschool and child nutrition programs. Revenue sources typically include apportionments, parent fees, food service sales, and interest earnings. Per the district’s 2025-26 adopted budget narrative report to the board, the district is a contractor with CDE for a California State Preschool Program and subcontracts with the Community Association for Preschool Education Inc. (CAPE) to administer the preschool programs at multiple sites. All revenue received is allo- cated to CAPE (object 7299) except for a small amount for indirect cost transfers to the unrestricted general fund (object 7350). Unaudited actuals show no deficit spending in 2023-24 and 2024-25, and none is projected for 2025-26. The district applied a prior-year indirect cost rate of 4.94% in its 2025-26 adopted budget for Fund 12. FCMAT adjusted the indirect cost rate to the approved 2025-26 rate of 4.24%, reducing the transfer from $95,822 to $82,244. FCMAT adjusted this amount in the indirect cost budget in the unrestricted general fund (object 7350). Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 33 Findings and Recommendations Other Funds and Recommendations Cafeteria Special Revenue Fund (Fund 13) School districts use Fund 13 to account for their food service programs. They may charge Fund 13 the lesser of their respective CDE-approved indirect cost rate (ICR) or the statewide average indirect cost rate for that year. The unaudited actuals reports from 2022-23 to 2024-25 show that the district did not fully charge indi- rect costs to Fund 13. The district has only charged $90,000 in each of those years-using ICRs ranging from 2.15% to 2.69%) and only projected $90,000 (1.99% ICR) for 2025-26. FCMAT’s 2025-26 MYFP has adjusted the indirect cost rate to the approved rate of 4.24%, increasing the projected transfer from $90,000 to $191,570. As previously discussed, FCMAT’s MYFP also included indirect cost transfers from Fund 13 in all projection years. Since 2022-23, the district has maintained a surplus in Fund 13. In 2023-24, the district transferred the Child Nutrition Kitchen Infrastructure and Training Grant from Fund 13 to the general fund for more spending flexibility. The district’s adopted budget projects a deficit of ($784,313), lowering the ending fund balance to $2.615 million. According to interviews, the district’s Fund 13 balance is still under the allowable balance7 for the program, per federal regulation 7 CFR 210.14. Foundation Special Revenue Fund (Fund 19) This fund tracks gifts or bequests made under EC 41031 when a formal trust agreement exists with the donor. Both principal and earnings can be used to support the district’s programs. Gifts without a trust agreement should be recorded in the general fund. Money in Fund 19 must be spent only for the spe- cific purpose of the gift or bequest, as required by EC 41032. The district uses Fund 19 to report the activity of scholarship funds held by the district. The district’s 2025-26 budget reflect a $190,402 beginning balance and a projected ending balance of $181,952. Building Fund (Fund 21) School districts use Fund 21 for proceeds from the sale of facilities bonds, which must be used for vot- er-approved purposes. The district passed a $245 million general obligation bond, Measure J, in 2016. The proceeds from this bond is tracked in Fund 21. At the time of FCMAT’s review, documents and interviews with district staff indicated that the district building fund had sufficient resources to complete projects in progress. The district estimated a 2025-26 beginning balance of $7.270 million, but after closing the books, the actual balance was $16.185 million. The district’s 2025-26 adopted budget included remaining costs for the Marilyn STEAM Academy project and HVAC and roof repairs/replacements. Capital Facilities Fund (Fund 25) School districts use Fund 25 to account for fees collected from development projects under EC 17620- 17626 and GC 65995 and the following sections. These fees, along with interest earnings, are restricted for facility development and other expenditures specified in agreements with developers. 7 The CDE limits net cash resources in the cafeteria fund to no more than three months’ average expenditures for the school food service program, as required by federal regulation 7 CFR 210.14). District with balances above this threshold must submit a plan to reduce the excess, such as improving meal quality or purchasing equipment. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 34 Findings and Recommendations Other Funds and Recommendations In 2024-25, the district’s unaudited actuals showed a surplus with an ending balance of $3.669 million. The district’s 2025-26 adopted budget projects a deficit of $2.825 million, leaving an estimated ending balance of $844,533. Continued deficit spending in this fund could eventually affect the unrestricted general fund, so the district should monitor expenditures and align them with available revenue. School Facilities Fund (Fund 35) School districts use Fund 35 to manage state apportionments for new school construction, modernization projects, and facility hardship grants under the Leroy F. Greene School Facilities Act of 1998. According to its 2025-26 adopted budget, the district estimates spending $3.401 million for projects related to safety, security and access control, technology, east science room, and the Marylin STEAM Academy school site. With the $20.033 million beginning balance from the 2024-25 unaudited actuals, this leaves an estimated $16.632 million ending fund balance for 2025-26. Special Building Fund (Fund 40) School districts use Fund 40 to accumulate general fund money for capital outlay purposes, as authorized by EC 42840. This fund may also account for revenue sources not restricted to other capital project funds, such as proceeds from the sale or lease-with-option-to-purchase of real property, rental income, and leases approved by the school district’s governing board. Revenue sources include federal, state and local fund- ing, interest earnings, and other authorized interfund transfers. Expenditures from Fund 40 are restricted to capital outlay purposes, including property maintenance, ren- ovations, and school improvements, typically classified under 6000 object codes. Salaries for employees directly involved in Fund 40 projects may also be capitalized as part of the project costs. The district’s 2025-26 adopted budget estimated total expenses of $982,362, mostly for the repayment of the district’s Engie loan. After the 2024-25 unaudited actuals was completed, the estimated ending fund balance is estimated at about $10.007 million. Self-Insurance Fund (Fund 67) Self-insurance funds are used to separate moneys set aside for self-insurance from other district funds. Districts may establish separate funds for each type of self-insurance activities such as workers’ com- pensation, health and welfare, and deductible property loss (EC 17566). Principal revenues in this fund come from interest, district premiums/contributions, interagency reve- nues, and other local sources. Expenses include insurance claims, administrative costs, deductibles, excess coverage and related costs. Amounts contributed to Fund 67 are legally restricted for insurance purposes under EC 17566 and GC 53205. The district records its property and liability insurance activity in Fund 67. This includes annual premiums, student field trip insurance, the cost of claims management, and applicable deductibles for claims. Annually the district transfers funds to cover the cost of student trip insurance and premiums. According to unaudited actual reports, the district transferred $195,885 in 2023-24 and $125,000 in 2024- 25. The district’s 2025-26 adopted budget estimates $1.369 million in expenses and a $50,000 transfer from the general fund to cover the cost of claims. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 35 Findings and Recommendations Other Funds and Recommendations Recommendation The district should: 1. Ensure that the financial impact of all other funds on the unrestricted general fund for the current and two subsequent years is fully accounted for in all MYFPs. Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 36 Findings and Recommendations Cash Flow Analysis Cash Flow Analysis The purpose of performing a cash flow projection is to identify whether a district has a temporary cash flow shortage to develop local solutions or identify if there are unresolvable cash flow shortages. Insolvency occurs when a school district has exhausted both its cash and borrowing capacity and can no longer meet its financial obligations, primarily employee payroll. FCMAT used the Projection-Pro cash flow projection component to develop its projection. Projection-Pro incorporates the best practice of linking the cash flow to the multiyear projection to ensure all activities are included. It also projects using differing levels of detail. For example, the best practice is to project reve- nues at the resource-object level because the source of the revenue generally determines cash inflows. In contrast, best practice projects expenditures at the major object category because the district processes and payment schedule determine cash outflows. The tool also allows customization for special schedules that do not align with the account code structure. For example, the state’s on-behalf pension expenses are not identifiable by its own resource-object combination and could negatively affect cash flow projections if an appropriate schedule is not applied. FCMAT’s cash flow projection is based on the best practices as described above, including FCMAT’s updated multiyear projection, to develop a reasonable cash flow and identify any temporary cash flow issues. Actual cash flow details have been incorporated through October 2025. FCMAT concurs with the district’s statement that it will experience temporary cash flow issues in its general fund. From FCMAT’s analysis, the need to temporarily borrow will occur in November 2025 and be resolved in December 2025, after local property taxes are received. FCMAT estimates the borrowing need to be between $2 million to $3 million dollars. No other borrowing need is identified for the 2025-26 fiscal year. Subsequent years follow a similar need pattern and may require the district to identify borrowing options. In its adopted budget narrative, the district identified two possible options to resolve the temporary cash flow issue: borrow from other district funds or borrow from the county treasurer. On June 17, 2025, the board passed resolution 077-24/25 to authorize temporary interfund borrowing and 078-24/25 to authorize temporary borrowing from Alameda County Treasury in 2025-26. Per the study agreement, FCMAT did not perform an in-depth analysis on the district’s other funds. However, based on the 2024-25 unaudited actu- als, the district has sufficient cash in the Special Reserve Fund for Capital Outlay Projects to temporarily lend cash to the general fund. Recommendations None Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 37 Appendix Appendix A: Study Agreement Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 38 Appendix Appendix A – Study Agreement Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 39 Appendix Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 40 Appendix Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 41 Appendix Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 42 Appendix Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 43 Appendix Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 44 Appendix Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 45 Appendix Digitally signed by Michael H. Fine Michael H. Fine Date: 2025.09.02 09:18:08 -07'00' Fiscal Crisis and Management Assistance Team Livermore Valley Joint Unified School District 46