Mount Diablo Unifiedpresented its first interim budget update Dec. 10, outlining multi-year projections and the fiscal strategy the district will use as it prepares the 2026-27 budget.

Adrian Vargas and fiscal staff summarized a multi-year forecast showing combined projected deficit spending of approximately $56 million in 2025-26 (about $33 million of that related to restricted one-time carryover spending and block grants), $25.8 million in 2026-27 and $19.3 million in 2027-28. Vargas said the district is using one-time funds to cover a portion of current-year expenditures and emphasized that the multi-year projections will be updated after the governors January budget and second-interim adjustments.

"We are deficit spending, $56,000,000 in totality," Vargas told the board during the presentation. He and Brenda Barbera (director of budget and accounting) detailed the factors behind the numbers: negotiated salary and benefit increases (including retroactive steps built into the current year), expiring restricted grants and block grants that are being spent down, increased benefits costs (STRS/PERS and medical), and capital/implementation expenses tied to an ERP conversion.

Gustavo Aguilera summarized assumptions used for enrollment (flat ADA projected at 29,378 with 93% ADA), LCFF and COLA assumptions, and adjustments that will be re-run after the governor's proposal. The administration told trustees it intends to submit a first-interim certification of "positive," indicating the district anticipates meeting the required 3% reserve for economic uncertainty in the third year of its projections while maintaining positive cash flow for the one-year window required by the county office.

Trustees asked detailed questions about restricted vs. unrestricted deficits, contribution lines, and the effect of federal grant uncertainty. Trustee comments emphasized concern about long-term sustainability and the state's revenue sensitivity to capital gains and tech-sector tax receipts.

Following the presentation, Trustee Ferrera Oriana moved to approve the 2025-26 first interim report as presented; the motion passed on a roll-call vote (yes votes recorded). The board will revisit the projections at second interim and as the governor's January budget becomes available.