The school district may continue to spend down its reserves and delay a decision on potential cuts until next school year. A plan to lay off 100 full-time equivalent teachers and staff was voted down at a Feb. 12 school board meeting.

Pajaro Valley Unified Superintendent Heather Contreras said Thursday that she did not expect cuts to be made in time for the March 15 deadline to notify employees of layoffs for the 2025-2026 school year. 

“We basically just continue forward and move on to the next year. And the next year, we would still need to be reconsidering reductions,” Contreras said. “Our budget is not going to allow for us to continue with positions that were added with one-time funding, and we still do need to address the declining enrollment.”

The next scheduled school board meeting is March 5, but a special meeting could be called sooner if one of the trustees who voted against the cuts says they would change their vote, or if a reworked version of budget cuts were to be proposed. 

Contreras said she did not expect another proposal to be put forward before the March 5 meeting.

Parents and teachers pack a Feb. 12 Pajaro Valley Unified School Board meeting after teacher layoffs were proposed. (Fidel M. Soto — Santa Cruz Local)

Staff reduction proposals

Brandon Diniz, negotiations chair for Pajaro Valley Federation of Teachers, praised the trustees who voted down the proposal. He also said the way the district leaders proposed the layoffs was less than transparent. 

The suggested cuts were driven in part by the end of one-time pandemic-era federal money, and those reductions were approved by the board in January. But the resolution put before the board at the Feb. 12 meeting included dozens of other layoffs, which led to confusion, Diniz said.

“The district wasn’t successful in getting the board to approve those cuts to the one-time Covid money positions” because of the outcry over the additional layoffs included in the proposal, Diniz said.

Alicia Jimenez, the district’s media representative, said that at the January meeting the board had directed staff to look for additional places to make reductions. Diniz said that was a mischaracterization.

“I don’t think we would have seen over 200 people from the community show up to rally and pack the board room if it were as transparent and clearly discussed at the January meeting,” Diniz said.

The proposal failed by a 3-4 vote with Pajaro Valley Unified School Board President Olivia Flores, Vice President Misty Navarro and Trustee Carol Turley in favor. Trustees Jessica Carrasco, Daniel Dodge Jr., Joy Flynn and Gabe Medina voted against it.

Declining enrollment, right-sizing

The fiscal challenges posed by declining enrollment and the end of one-time federal pandemic money is not unique to Pajaro Valley Unified. But the district has been facing budget challenges for years and previous iterations of the board didn’t address it, said Turley. She was elected to the board in November. 

“It’s pretty clear the can had been kicked for several years where they already knew we were in trouble,” Turley said. The district’s budget was in trouble in the 2018-2019 school year and the Covid money was “probably the thing that saved us,” she said. 

Part of the district’s money problems come from fewer students because its funding is tied to average daily attendance. While the pandemic money kept the district afloat and allowed it to build up its reserves, declining enrollment still needs to be addressed, Contreras said.

“When student attendance drops, you have to realign the number of teachers you have to the number of students you have. That is an annual process that all schools go through,” she said. This process is often called “right-sizing.”

“Invest in children,” a sign states in Spanish before a Feb. 12 Pajaro Valley Unified School Board meeting. (Fidel M. Soto — Santa Cruz Local)

Diniz said it was disheartening that the district would propose so many layoffs when it had healthy reserves. He pointed to a projected reserve of about $31 million for the 2026-2027 school year, which is greater than the 3% minimum required by the state. 

Contreras said the district is better off with a large reserve. The 3% minimum is “the floor,” she said in an interview. “That’s really not practical, and that’s not really where a district should be. What is really recommended is to maintain a 15% reserve.”

The district is projected to spend about $12 million more than it will bring in during the 2025-2026 school year, according to budget documents.

“If we don’t take any measures again, we will continue to spend down those reserves. We were fortunate to build them up. But a pandemic happens once in 100 years, so we cannot really count on another pandemic coming in to help us,” Contreras said. 

“What we can count on helping is to make the decisions that would lead to fiscal solvency,” she said.

Noticias Watsonville reporter Fidel M. Soto contributed reporting to this story.

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