Pajaro Valley Unified School District trustees on Wednesday approved a three-year contract with the district’s teachers union, ending more than a year of negotiations while raising concerns about the district’s increasingly precarious financial situation.
The agreement passed 5-1, with Trustee Misty Navarro abstaining. Trustee Gabriel Medina was absent.
The Pajaro Valley Federation of Teachers had already ratified the agreement with 85% of members voting in favor.
The contract covers the 2025-26 through 2027-28 school years and provides a 2% ongoing salary increase retroactive to July 1, 2025, followed by 1% increases in each of the next two years.
It also restores a $250 classroom-supply reimbursement, increases instructional aide support in kindergarten classrooms and makes numerous changes to working conditions.
The agreement comes as PVUSD faces a $20 million budget gap that must be addressed by 2027-28 to maintain the state-required 3% reserve.
Douglas Crancer, a consultant from Ryland School Business Consulting told the board that the district can afford the agreement, but only if it implements those reductions or finds additional revenue.
The district projects its combined general fund balance will fall from approximately $86.6 million this year to $44.3 million in 2028-29.
Superintendent Heather Contreras said the Santa Cruz County Office of Education has warned that the district will likely receive a qualified financial certification in December, meaning it may not meet its financial obligations in future years.
PVUSD must submit a fiscal stabilization plan showing how it intends to address the shortfall.
Contreras said the district’s financial problems stem largely from its fully funded employee health benefits and operating too many schools for its declining enrollment.
That means school closures and changes to employee benefits will likely be necessary.
Trustee Joy Flynn said the district must move quickly.
“We have to close schools and we have to do it urgently,” she said.
Trustee Jessica Carrasco was equally direct.
“Closing schools is the only way we can financially sustain this new contract,” she said, adding that doing so would not solve the district’s long-term financial problems.
Contreras acknowledged that school closures alone probably would not eliminate the deficit.
Navarro opposed the agreement, arguing that the district’s generous health insurance offerings are financially unsustainable.
“Your salaries will remain low until we do something about the benefits,” she said.
Navarro also criticized a provision affecting Aptos High School’s seven-period schedule, saying the community had not been given adequate opportunity to weigh in.
Beginning in 2027-28, the agreement eliminates the additional teacher collaboration period associated with that schedule. District documents project a reduction of eight full-time-equivalent teaching positions.
Contreras said the arrangement has made staffing Aptos High more expensive than Watsonville and Pajaro Valley high schools.
PVFT President Brandon Diniz defended the agreement, saying union members had compromised on salaries to preserve their health benefits.
“We compromised on salary in order to maintain our benefits,” he said.
Diniz said the agreement also creates a partnership to explore reducing health care costs without imposing the benefits cap the district had previously sought.
He warned that rejecting the contract could put teachers back on the path toward a strike.
“Voting no on this would send our entire school system into disarray,” he said.
Flynn said rejecting the agreement after lengthy negotiations would further damage an already strained relationship between the district and its teachers.
“Why would I … start over again after all that hard work and cause so much upheaval?” she said.
The agreement also resolves two pending unfair labor practice cases between the district and union.
