2017-2018 Adopted Budget...January Budget vs. May Revision Item January Budget May Revision LCFF Gap...

2017-2018 Adopted Budget

June 27, 2017 Dr. Drew Passalacqua

Assistant Superintendent, Business Services

Briana Hennes Senior Director, Business Services

• Estimated Actual (2016-17) •  Actual revenue and expenditure data through May

31st with projections through June 30th

• Adopted Budget (2017-18) •  Forecasted revenue and expenditure figures based

on best available information (Budget Assumptions) and Local Control Accountability Plan (LCAP) goals and priorities

•  Includes Multi-Year Projections (MYP), Cash Flow Projections and Criteria and Standards Reports

Adopted Budget Report

The Estimated Actuals portion of the report allows districts to make one last budget revision to forecast its financial position at June 30 of the fiscal year.

•  General Fund Projected to end with an excess of expenditures over revenues (deficit) of approximately $2.6 Million.

Estimated Actuals

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1.  Next Recession Around the Corner

2.  Many districts are deficit spending

3.  Prepare for the future

4.  Prepare for a slowdown

Governor’s May Revision Highlights

Suggestions to Control Expenditures:

1.  Accurate position control and staffing formulas

2.  Avoidance of excessive settlements at the bargaining table

3.  Commitments to maintain existing programs before adding new programs

4.  Use of capital expenditures to make facilities more efficient and to reduce operating costs

Governor’s May Revision Highlights

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Purchasing Power

January Budget vs. May Revision

Item January Budget May Revision

LCFF Gap Funding 23.67% or

$744 million 43.97% or $1.4 billion

Proposition 98 Minimum Funding Guarantee

2015-16 2016-17 2017-18

$68.7 billion $71.4 billion $73.5 billion

$69.1 billion $71.4 billion $74.6 billion

2017-18 COLA 1.48% 1.56%

One-Time Discretionary Funds for 2017-18

$287 million $48 per ADA

$1.01 billion* $170 per ADA

© 2017 School Services of California, Inc.

*Not received until May 2019

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Making History

• Recession (Next 2 Years?)

• Continued Growth (Next 4 Years?)

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Test 3B and Stretching Proposition 98

© 2017 School Services of California, Inc.

•  The May Revision proposes to lower Proposition 98 beginning in 2018-19 by not paying a supplemental appropriation under Test 3 – funding based on per capita General Fund revenues

•  Test 3B, “equal pain/equal gain,” requires Proposition 98 spending increases to be no less than non-Proposition 98 spending increases

•  The May Revision would suspend Test 3B payments through 2020-21, which lowers the minimum funding guarantee

•  $867 million for 2018-19 through 2020-21

•  Suspended payments would accrue to the maintenance factor

Proposition 98 Funding Loss

© 2017 School Services of California, Inc.

Budget Assumptions Assump&ons 2017-2018 2018-2019 2019-2020

LocalControlFundingFormula(LCFF)Target $96,594,909 $96,380,163 $97,284,378

LocalControlFundingFormula(LCFF)Floor $91,387,410 $91,651,803 $93,835,874

Difference/Gap $5,207,499 $4,728,360 $3,448,504

Funding% 43.97% 71.53% 73.51%

TotalLCFFFunding $93,677,147 $95,033,999 $96,370,869Es&matedUnduplicatedPupil% 54.00% 54.00% 54.00%

Es&matedSupplementalandConcentra&onGrants $8,819,646 $9,203,264 $9,442,195

Enrollment 10,774 10,624 10,479

ProjectedADA 10,467 10,322 10,159

LossofADAfromPriorYear (256) (145) (163)

ASendancePercentageAssumed(P-2toCalPADS) 97% 97% 97%

DistrictFundedADA(GreaterofCurrentorPriorYear) 10,723 10,467 10,322

Step&Column Yes Yes YesProgresstowardsclasssizeof24to1inGradesTKthrough3 Yes Yes Yes

HealthandWelfareIncrease 7.42% 5% 5%

LoSery(Unrestricted)perADA $144 $144 $144

LoSery(Restricted)perADAforProp.20 $45 $45 $45

Budget Assumptions Employer contributions to employee retirement systems

Rates continue to increase as noted below. 2017-18 2018-19 2019-2015.53% 18.10% 20.80%

Salary Projections 15,210,389 15,440,045 15,673,146

Annual % Increase over PY 1.64% 2.57% 2.70% 6.91%

Annual $ Increase over PY 263,820 432,475 465,366 1,161,661$

2017-18 2018-19 2019-2014.43% 16.28% 18.13%

Salary Projections 53,894,454 54,095,082 54,298,318

Annual % Increase over PY1.85% 1.85% 1.85% 5.55%

Annual $ Increase over PY1,164,077 1,029,710 1,037,606

3,231,392$

CalSTRS Employer Rate

CalPERS Employer Rate

Cumulative Affect

Cumulative Affect

•  RMA – Budgeted increases are attributed to the elimination of flexibility provisions (minimum 3% of total expenditures)

•  Special Education – Budgeted increases include rising STRS/PERS rates, Health and Welfare increases and increases in student needs

Contributions to Restricted Programs

SpecialEducation 13,712,502$ 13,333,730$ 13,333,730$RMA-OngoingMajorMaintenance 2,681,517 3,375,582 3,375,582

Total 16,394,019$ 16,709,312$ 16,709,312$

Multi Year Projection - Unrestricted

2017-2018 2018-2019 2019-2020 Beginning Balance $9,757,391 $6,514,938 $3,815,716

Revenue $82,872,011 $82,604,284 $83,941,154

Expense $86,114,464 $85,303,506 $86,908,830

Surplus / (Deficit) ($3,242,453) ($2,699,222) ($2,967,676)

Ending Balance $6,514,938 $3,815,716 $848,040

Less: Designations $3,448,747 $3,375,582 $848,040

Assigned Balances $3,066,192 $440,134 $0

Multi Year Projection – Combined Unrestricted & Restricted

2017-2018 2018-2019 2019-2020 Beginning Balance $15,446,695 $9,952,963 $6,309,694

Revenue $109,464,486 $108,876,144 $110,203,014

Expense $114,958,218 $112,519,413 $114,726,541

Surplus / (Deficit) ($5,493,732) ($3,643,269) ($4,523,527)

Ending Balance $9,952,963 $6,309,694 $1,786,167

Less: Reserve for Economic Uncertainties $3,448,747 $3,375,582 $848,040

Restricted/Assigned Balances $6,504,216 $2,934,112 $938,127

•  Submission of Budget Documents and LCAP to the County Office for review and approval

•  The State will adopt its Final State Budget by July 1, 2017

•  Districts have 45 days to make any necessary adjustments based on State’s Final Budget

•  Unaudited Actuals and Budget Revisions

•  Budget Reduction Prioritization Plan

Next Steps