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Contributors � Dr. Catherine Nichols,
Superintendent
� Jennifer Root, Chief Business Officer
� Jimmy Escobar,
Director of Fiscal Services
� Khrystyne Pimentel,
Assistant Director of Fiscal Services
� Maureen Burns,
Business Services Supervisor
Legal Requirements Reporting Requirements
� Board members must authorize an operating budget by June 30th of each year
� Local Control Accountability Plan must be approved in advance of the annual budget
� Los Angeles County Office of Education � CDE designee to approve the District Budget
Legal Requirements
Reporting Requirements (continued)
� Certifications � Positive -‐ the District will meet its financial obligations
� Qualified -‐ the District may not meet its financial obligations � Negative -‐ the District will be unable to meet its financial
obligations
Certification is for the current fiscal year and subsequent two fiscal years.
Disclosure Requirements � Provide narrative disclosures of budget assumptions utilized in projections (Section I)
� Prepare supplemental documents outlining budget details (Sections II through VI)
� Provide multi-‐year projections (Section VII)
� Covering periods 2015-‐16 through 2017-‐18
� Budget reports (Section VIII) � State forms (Standardized Accounting Code Structure -‐ SACS) (Section IX)
Financial Trends and Analysis
Footnote: *Enrollment projections provided by Davis Demographics & Planning, Inc.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
10-11 11-12 12-13 13-14 14-15 15-16* 16-17* 17-18* 18-19* 19-20* 20-21* 21-22*
5,248 5,107 5,041 5,042 5,024 4,903 4,847 4,843 4,874 4,882 4,971 5,010
3,112 3,098 2,953 2,768 2,607 2,598 2,607 2,566 2,457 2,416 2,343 2,335
5,328 5,130 4,966 4,736 4,643 4,544 4,322 4,088 3,916 3,857 3,809 3,747
STU
DE
NT
EN
RO
LL
ME
NT
Enrollment Data Projections for GRADES K-12
Elementary School Middle School High School
13,688 13,335
12,960 12,546 12,274
12,044 11,777 11,497 11,246 11,156 11,123 11,091
Footnote: *ADA projections were calculated using enrollment projections provided by Davis Demographics & Planning, Inc.
10,000
10,500
11,000
11,500
12,000
12,500
13,000
13,500
14,000
14,500
15,000
07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16* 16-17* 17-18*
14,465
14,134 13,939
13,560
13,275
13,015
12,699
12,337
12,058
11,693
11,434
Covina-‐Valley Unified School District Average-‐Daily-‐Attendance (ADA)
The bar graph shown below illustrates the loss of District Base Funding (LCFF) to be estimated at $8.7 million over a three-‐year
period.
102.0
104.0
106.0
108.0
110.0
112.0
114.0
116.0
118.0
15-16 16-17 17-18
$107.6
$112.4
$116.4
$107.6
$109.3
$110.8
Status Quo 14-15 Funded ADA With Decline
LCFF Sources, $107.65 ,
78%
Federal Revenue, $5.40 ,
4%
Other State Revenue,
$20.62 , 15%
Other Local Revenue,
$4.65 , 3%
Certificated Salaries,
$60.69 , 48%
Classified Salaries,
$16.97 , 13%
Employee Benefits,
$24.62 , 20%
Books and Supplies,
$7.89 , 6%
Services and Other Operating,
$11.32 , 9%
Capital Outlay, $0.02 , 0%
Other Outgo, $4.61 , 4%
2015-‐16 State Budget Updates � California unemployment rate has declined to 6.3% as of
April 2015. � State of California, expected to spend $50.45 billion in
2015-‐16 on K-‐12 education, $4.99 billion over last fiscal year.
State Revenues July -‐ April 2015
(in millions)
Revenue Source Actual
Revenues Budget Act Budget Act Over
(Under)
Corp Tax
7,375.20 7,128.24 246.95
Personal Inc. Tax 61,851.77 59,173.99 2,677.78 Retail Sales & Use Tax 17,768.87 17,353.32 415.55
Other Revenues 3,161.45 3,113.61 47.84
Non-Revenue
1,833.98 1,869.04 (35.06)
Total Receipts
91,991.27
88,638.20
3,353.07
State Disbursements July -‐ April 2015
(in millions)
Program Actual
Disbursements Budget Act Budget Act Over
(Under)
Local Assistance
72,921.99 71,711.29 1,210.70
State Operations
26,689.39 26,828.33 (138.94)
Other 2,190.76 2,153.30
37.46
Total
101,802.14
100,692.92
1,109.22
Fiscal Year: 2015-‐16 Working Assumptions
Revenues
� COLA 1.02%
� Decline in funded ADA of 279
� LCFF Gap Funding is budgeted at 53.08%
� Updated Lottery for K-‐12 enrollment decline and loss of ROP/Adult funded ADA
Expenditures
� Reduction in staffing for enrollment decline
� Step, column, and longevity
� Health and Welfare Benefits
� Additional General Fund Contributions
Budget Assumptions for the Next Two Years
Fiscal Year: 2016-‐17 Working Assumptions
Revenues
� COLA 1.60%
� Decline in funded ADA of 425
� LCFF Gap Funding is budgeted at 37.40%
Expenditures
� Reduction in staffing for enrollment decline
� Step, column, and longevity
� Health and Welfare Benefits
� Additional General Fund Contributions
Fiscal Year: 2017-‐18 Working Assumptions
Revenues � COLA 2.48%
� Decline in funded ADA of 258
� LCFF Gap Funding is budgeted at 36.40%
Expenditures
� Reduction in staffing for enrollment decline
� Step, column, and longevity
� Health and Welfare Benefits
� Additional General Fund Contributions
Reserve for Economic Uncertainty 2015-‐16 2016-‐17 2017-‐18
Minimum Reserve: 3,783,382$ 3,846,243$ 3,945,303$ Assigned Fund Balance: 10,439,574 15,226,549 21,311,797 Unassigned Fund Balance: 5,279,606 4,889,840 1,901,905
§ The additional amount in the District’s reserve is consistent
with the reserve that Covina-‐Valley has typically held. This
reserve is included to protect the integrity of the budget due
to any changes in the corresponding data which would impact
the amount of revenue the District receives. This could
include variations in ADA or unduplicated percentages which
are both factors in the calculation of revenue.
Multi-‐Year Budget Projections Proposed Budget Projected Projected
2015-16 2016-17 2017-18
Beginning Fund Balance $14,776,207 $26,978,455 $31,324,339
Audit Adjustment/Restatement
Revised Fund Balance $14,776,207 $26,978,455 $31,324,339
Annual Revenues (includes other financing sources) $138,314,980 $132,553,967 $134,065,847
Annual Expenditures (includes other financing sources) $126,112,732 $128,208,083 $131,510,164
Changes in Fund Balance $12,202,248 $4,345,884 $2,555,683
Projected Ending Fund Balance $26,978,455 $31,324,339 $33,880,022
I. Unavailable Reserves: $7,475,893 $7,361,707 $6,721,096
1.) Nonspendable:
1. Revolving Cash $35,000 $35,000 $35,000
2. Inventory $56,737 $56,737 $56,737
2.) Restricted Program Balances $7,384,156 $7,269,970 $6,629,359
3.) Assigned $10,439,574 $15,226,549 $21,311,797
II. Total Unrestricted Fund Balance $9,062,988 $8,736,083 $5,847,129
1.) Reserve for Economic Uncertainty (3%) $3,783,382 $3,846,243 $3,945,303
2.) Available Reserves (See Footnote) $5,279,606 $4,889,840 $1,901,826
III. Available Reserves (Unrestricted Fund) 7.19% 6.81% 4.45%
Challenges for the District
Budget Constraints and Challenges � Full implementation of LCFF
Funding Model � 15-‐16 53.08% � 16-‐17 37.40% � 17-‐18 36.74%
� Student Enrollment Decline
� Competing demands for funding
� Unfunded OPEB Liability � $8.4 Million � STRS/PERS significantly
increasing over the next several years
� Add’l Contributions
� Affordable Care Act/Sick Leave for All Act
� Sun-‐setting of Prop. 30 � Sales Tax 2016 � Income Tax 2018
STRS and PERS Rates Increase and Projected Additional Expenditures
STRS 2015-16 2016-17 2017-18 TOTAL
Old Rate 8.25% 8.25% 8.25%
New Rate 10.73% 12.58% 14.43%
Rate Difference 2.48% 4.33% 6.18%
Add'l Expenditures $1,505,083 $2,636,360 $3,727,461 $7,868,904
PERS 2015-16 2016-17 2017-18
Old Rate 11.442% 11.442% 11.442%
New Rate 11.847% 13.050% 16.000%
Rate Difference 0.4050% 1.608% 4.558%
Add'l Expenditures $68,726 $274,916 $785,114 $1,128,756
Total Expenditures: $8,997,661
Sections VIII and IX � Budget Reports
� Detailed List of Revenues & Expenditures
� State Forms � Standardized Accounting Code Structure
Next Steps -‐ Adopted Budget � Recommend Board approval of Proposed Budget for 2015-‐16 at the June 22nd Board Meeting.
� Submit reports to LACOE by June 30th
Thank you! Comments and Questions…
