2018-19 First Interim Budget Harold Sullins, Assistant - - PowerPoint PPT Presentation

2018-19 First Interim Budget

Harold Sullins, Assistant Superintendent Briana Hennes, Senior Director

Budget Information First Interim Budget Multi-Year Projections Next Steps

Presentation Overview

Moving Forward After Full Implementation of LCFF

At full implementation of LCFF we can expect: Base grant funding will be equalized across all districts Supplemental and concentration grant funding will continue to be based on Unduplicated Pupil Percentage Annual growth in district funding will be determined by; (1) the change in ADA, and (2) the COLA

(minimal increases of 2% - 3% annually)

When Proposition 98 funding is in excess of LCFF requirements for growth and COLA, the monies could be used for: New or expanded categorical programs Discretionary incentives to LCFF

Moving Forward After Full Implementation of LCFF

New and existing challenges will require action to ensure fiscal health of the district. Reduction of revenue due to loss of ADA as a result of declining enrollment Pension cost increases, step and column, health and welfare, and rising special education costs reduce purchasing power of new dollars Structural deficit continues to erode fund balance Restoration of full Routine Restricted Maintenance Account flexibility beginning in 2019-20 An economic slowdown is expected within the next couple of years

Budget Cycle and Reporting

State Budget Adoption (June/July) Governor’s Budget Proposal (January) May Revision (May) District 1st Interim Budget (December) 2nd Interim(March) Budget Adoption (June)

2018-19 First Interim Budget Report

Represents actual revenues and expenditures as of October 31st, 2018 Budget updated to reflect projected balances for June 30th, 2019 District self certifies their financial status from the following three

• ptions:

Positive – District will meet its financial obligations in current and two subsequent years Qualified – District may not meet its financial obligations in current and two subsequent years Negative – District will be unable to meet its financial obligations for the remainder of the current year or subsequent fiscal year.

Adopted Budget vs. First Interim

Assumptions Adopted Budget First Interim Enrollment 10,812 10,693 Increase/(Decrease) from PY (95) (214) Projected ADA 10,367 10,252 Unduplicated Pupil Percentage 56.12% 56.83% Cost of Living Adjustment (COLA) 3% 3.7% One-time Discretionary Funding $3,605,326 $1,911,499 Step and Column Yes Yes Lottery (Unrestricted) $146 Per ADA $151 per ADA Lottery (Restricted) $48 Per ADA $53 per ADA

11,665 11,380 11,136 11,012 10,907 10,693 10,546 10,382 11,221.84 10,910.24 10,679.63 10,623.58 10,408.02 10,252.00 10,111.31 9,954.05 9,200.00 9,400.00 9,600.00 9,800.00 10,000.00 10,200.00 10,400.00 10,600.00 10,800.00 11,000.00 11,200.00 11,400.00 9,000 9,500 10,000 10,500 11,000 11,500 12,000 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

Upland Annual Enrollment and ADA Trend

Enrollment P-2 ADA ADA Trend Line

Enrollment and ADA

LCFF Revenue Growth

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 LCFF REVENUE $73,588,186 $80,367,672 $88,225,669 $91,141,382 92,991,918 98,322,001 99,804,276 100,872,607 COLA 1.57% 0.85% 1.02% 0.00% 1.56% 3.70% 2.57% 2.67% $73,588,186 $80,367,672 $88,225,669 $91,141,382 $ 92,991,918 $ 98,322,001 $ 99,804,276 $ 100,872,607 $- $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000

LCFF REVENUE

Budgetary Impacts Increasing Retirement Contributions

2014 - 15 2015 - 16 2016 - 17 2017 - 18 2018 - 19 2019 - 20 2020 - 21 $5,142,316 $6,276,307 $6,105,428 $6,072,642 $6,194,364 $6,188,011 $6,153,525 $179,215 $1,023,235 $2,358,241 $3,584,173 $4,872,584 6,231,655 7,066,742

INCREASING RETIREMENT CONTRIBUTIONS

Original Contribution Rate Additional Contribution $7,299,542 $8,463,669 $9,656,815 $11,066,948 $12,419,666 $13,220,267 $5,321,531

H&W premiums have doubled since 2003-04

$8,481 $9,120 $9,417 $10,295 $10,868 $11,773 $12,347 $12,792 $14,327 $15,020 $16,088 $16,045 $16,076 $16,082 $16,564 $17,176 $7,686 $7,686 $8,776 $9,784 $10,451 $10,593 $12,039 $13,174 $13,373 $14,246 $14,786 $14,359 $14,998 $14,386 $15,708 $15,329 $7,000 $9,000 $11,000 $13,000 $15,000 $17,000 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Blue Shield Kaiser

Upland USD – Health and Welfare Trends 2003-2019

First Interim Budget

2018-19 Unrestricted Restricted Total Beginning Balance $8,653,226 $3,867,045 $12,520,271 Total Revenues $104,871,125 $13,651,438 $118,522,563 Total Expenditures including Other Outgo $87,150,764 $31,914,617 $119,065,381 Total Contributions ($18,263,722) $18,263,722 Change in Fund Balance ($543,361) $543 ($542,818) Projected Ending Balance $8,109,865 $3,867,588 $11,977,453

General Fund Revenue Sources

General Purpose (LCFF) Revenue 83% Federal Revenue 6% State Revenue 5% Local Revenue 6% Total General Fund Revenues Revised Budget 2018-19

General Fund Expenditures

Certificated Salaries 45% Classified Salaries 13% Benefits 23.3% Books and Supplies 5.4%

Other Services & Oper. 11.6% Capital Outlay 0.2%

Total General Fund Expenditures Revised Budget 2018-19 Other Outgo/Transfers 1.5%

Use of Multi-Year Projections

Multi-year projections are required by AB 1200/AB 2756 Recognize they are projections, not forecasts Projections are expected to change as various factors change – they are not predictions Projections are the mathematical result of today’s decisions based on a given set of assumptions Forecasts are predictions of the future – there is a higher implied reliability factor than for projections Projections will change any time the underlying factors change – therefore plan to adjust as conditions change

Assumptions for Multi-Year Projections

Assumptions 2019-2020 2020-2021 Total LCFF Funding $99,804,276 $100,872,607

• Est. Unduplicated %

57.59% 57.31% Supplemental/Concentration $11,288,433 $11,254,790 Enrollment 10,546 10,382 Increase/(Decrease) from PY (147) (164) Projected ADA 10,111 9,954 One-Time Funding $0 $0 Step and Column Yes Yes Health Benefits Increase $639,788 $658,150 Lottery (Unrestricted)-1.5% $151 per ADA $151 per ADA Lottery (Restricted) $53 per ADA $53 per ADA

Multi-Year Projections – Unrestricted General Fund

2018-2019 2019-2020 2020-2021 Beginning Balance $8,653,226 $8,109,865 $4,536,751 Total Revenues $104,871,125 $104,425,693 $105,469,031 Total Expenditures including Contributions and Outgo $105,414,486 $107,998,807 $108,806,929 Change in Fund Balance ($543,361) ($3,573,114) ($3,337,898) Projected Ending Balance $8,109,865 $4,536,751 $1,198,853

Deficit Spending Trends - Unrestricted

(8,000,000) (6,000,000) (4,000,000) (2,000,000)

• 2,000,000

4,000,000 6,000,000 2010-11 Actual 2011-12 Actual 2012-13 Actual 2013-14 Actual 2014-15 Actual 2015-16 Actual 2016-17 Actual 2017-18 Actual 2018-19 Proj

Unrestricted General Fund Deficit Spending

Multi-Year Projections – Combined General Fund

2018-2019 2019-2020 2020-2021 Beginning Balance $12,520,270 $11,977,452 $7,459,018 Total Revenues $118,522,563 $115,125,693 $116,169,031 Total Expenditures including Contributions and Outgo $119,065,381 $119,644,127 $120,527,553 Change in Fund Balance ($542,818) ($4,518,434) ($4,358,522) Projected Ending Balance $11,977,452 $7,459,018 $3,100,496

• Restricted Balance

$3,867,587 $2,922,267 $1,901,643

• Assigned Balance

$4,537,904 $947,427 $0

• 3% Reserve for Economic

Uncertainties $3,571,961

(3%)

$3,589,324

(3%)

$1,198,853*

(1%)

*Does not meet required 3% reserves

First Interim Certification

Option 1 Qualified Certification

• Board action to approve plan for reductions
• Report to the State Controller and Superintendent of Public

Instruction

• County Superintendent has option to intervene
• Governor’s January Budget Proposal may change financial outlook

Option 2 Positive Certification

• Include $3.5 Million adjustment in 2020-21
• Begin to identify budget reductions to fulfill adjustment
• Provides time to plan
• Begins to address the structural deficit

Potential Budget Contingencies

Negotiated Reductions Eliminate K-3 Class Size Reduction - $1.7M Increase employee contributions for Health and Welfare Benefits - TBD Increase SPED Preschool Class Size $130,000 Non-Negotiated Reductions Eliminate Elementary PE Staffing - $700,000 Eliminate Elementary Music - $235,000 Site and Department Budget Reductions - TBD Reduce Home to School, Athletic, Band Transportation - $300,000 Reduce Counseling Services -$185,000 Reduce Nursing Services - $95,000 Reduce Consulting Services -TBD Reduce Elementary Administrators - $700,000 Reduce Instructional Aides - TBD Eliminate Special Projects - $165,000 Clerical Staff Reduction - TBD Athletic Trainers - $65,000

Fund Balance – Measure K

Fund/Resource Beginning Balance Net Budget Activity Projected Ending Balance Measure K $2,506,593 ($1,884,028) $622,565

The Interim Budget Report will be submitted to the San Bernardino Superintendent of Schools for review and submission to the California Department of Education Conduct Board Study Session on Budget Governor’s January Budget Proposal Develop Budget Contingency Plan and Timeline Engage Stakeholders in Reviewing and Prioritizing Contingent Reductions

Next Steps

Questions?