Oakland Unified School District schools could run out of cash by November if the district’s Board of Education doesn’t act to close massive budget deficits projected for this school year and next. In a letter sent to OUSD on Tuesday, Alameda County Superintendent of Schools Alysse Castro said if the district’s board doesn’t take action by June, OUSD would not only run out of money but could again end up under the supervision of a state trustee and lose its ability to make decisions locally. In her letter to OUSD Superintendent Kyla Johnson-Trammell, Castro included budget information that shows the district is facing a projected $95.7 million shortfall this school year and a $99.6 shortfall for the 2026-2027 year. “This is not an abstract problem,” Castro wrote. “Without significant intervention, the district is projected to run out of cash during the 2025-26 school year, leading to significant destabilization for students and staff, necessitating another bankruptcy loan from the state, and forfeiting local decision-making authority.” The letter was in response to a district decision to file a “negative certification” of its budget in recognition of the fact that it won’t be able to meet its financial obligations for this and future school years. The current challenges are the same ones the district identified back in 2009, according to Castro, and include the findings that it has too many schools for the number of students in the district, has too many under-enrolled schools and small schools and doesn’t meet student and family needs in every neighborhood. The certification automatically draws increased attention from county and state education officials and requires the county to take one or more actions to help the district out of its financial hole. On Tuesday, Castro announced that she would be sending a fiscal advisor to help the district implement its “3Rs process,” which includes a redesign to improve equity and student outcomes, a re-envisioning of the district’s “footprint” and a restructuring of services, staffing and resources. Johnson-Trammell said the district is ready to work with the county to find its way out of its current financial morass. “The OUSD leadership team understands ACOE’s recommendations, and we will work closely with the appointed fiscal advisor to take every action possible to maintain our local control and put OUSD on a sustainable financial path toward a vision of a district that prioritizes educational efficacy and equity,” Johnson-Trammell said in a statement released Wednesday. In order to achieve its goals, the district — which has struggled with declining enrollment — must overcome “governance and operational dysfunction” and stop deferring, bypassing or altering difficult decisions, according to Castro’s letter. As examples, Castro cited the district’s 2023 decisions to back out of a school closure plan and to give teachers raises without reducing spending in other areas. She also said OUSD will be the only district with both a county financial advisor and a state financial trustee guiding its decisions. The trustee was appointed after the district went into receivership and was required to take out a $100 million state loan in 2003 — an arrangement the district has almost worked itself out of. If it can’t fix its current budget problems, the state will once again intervene. Representatives from the Oakland Education Association teachers’ union didn’t immediately respond to a request for comment.