2018/19 First Interim Tim Zearley Associate Superintendent, Business Services December 10, 2018
First Interim Report Fiscal Update • ADA Assumptions • Revenue Assumptions • Expenditure Assumptions • MYP Summary • Criteria and Standards • Next Steps • Questions Modesto City Schools
ADA Assumptions ADA Factors: Change to projected funded ADA • since adoption Elementary +7.48 High School -76.95 Total <69.47> Projected declining enrollment in • subsequent years Elementary <30> High School <50> Modesto City Schools
ADA Assumptions ADA Trend by District 14800 14600 14400 14200 14000 13800 13600 13400 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Elementary High School Modesto City Schools
Revenue Assumptions Total General Fund Revenues First Interim Budget 2018-19 Federal Revenue General Purpose 5% (LCFF) Revenue 83% State Revenue 11% Local Revenue 1% Modesto City Schools
Revenue Assumptions Local Control Funding Formula (LCFF) At Full Implementation: Annual growth in LCFF funding will be determined • by (1) change in ADA, and (2) the statutory COLA Supplemental and Concentration grant funding is • determined by the UPP YEAR COLA Gap Base Supplemental/Concentration Increase Increase 2018/19 3.70% 100% $12.2M $8.6M 2019/20 2.57% 100% $4.3M $9.0M 2020/21 2.67% 100% $6.0M $9.2M Modesto City Schools
Revenue Assumptions LCFF - Elementary Grades ADA Base Grade Supp. Conc. TARGET Span Unduplicated % of Enroll. 87.92% 87.92% K-3 6,215.55 $7,459 $776 $1,448 $1,355 $68,610,494 4-6 5,097.72 $7,571 $1,331 $1,246 $51,734,065 7-8 3,149.57 $7,796 $1,371 $1,283 $32,913,228 TOTAL $153,257,786 TIIG Add-On $1,084,014 Transportation Add-On $474,814 18/19 LCFF FUNDING $154,816,614 Modesto City Schools
Revenue Assumptions LCFF – High School Grades ADA Base Grade Supp. Conc. TARGET Span Unduplicated % of Enroll. 66.09% 66.09% 9-12 14,434.77 $9,034 $235 $1,225 $514 $158,900,005 TOTAL $158,900,005 TIIG Add-On $717,582 Transportation Add-On $458,416 18/19 LCFF FUNDING $160,076,003 Modesto City Schools
Revenue Assumptions Other Revenue Factors: Federal Deferred and Prior Year Revenue - $50K • State Deferred and Prior Year Revenue - $3.4M • Establish California Partnership Grant - $400K • Establish Migrant Education Grant - $85K • Modesto City Schools
Expenditure Assumptions Combined General Fund Expenditures First Interim Budget 2018-19 Other Capital Outlay Outgo/Transfer 2% 5% Other Services & Oper. 11% Certificated Salaries 42% Books and Supplies 6% Benefits 20% Classified Salaries 14% Modesto City Schools
Expenditure Assumptions PENSION REFORM 2017/18 2018/19 2019/20 2020/21 STRS 14.43% 16.28% 18.13% 19.1% Increase Over Prior Year $3.0M $3.1m $2.0M PERS 15.531% 18.062% 20.7% 23.4% Increase Over Prior Year $800K $1.5M $1.6M Increase over 2017/18 $3.8M $8.5M $12.0M Modesto City Schools
Expenditure Assumptions Unrestricted Pension Reform Expenses vs New Base Funding 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 - 2017/18 2018/19 2019/20 2020/21 Base Funding Increase Pension Reform Increase Expense Modesto City Schools
Expenditure Assumptions Other Expenditure Factors: Estimated budget savings of $12M are incorporated • in the current and subsequent two years First month enrollment, staffing and site allocation • adjustments Posting of 2017/18 carryover and deferred revenue • into 2018/19 Onetime approved expenditures are reflected in • 2018/19 but removed from subsequent years No increases reflected for pending negotiations • Modesto City Schools
MYP Summary Assumptions reflected in subsequent years: $12M Estimated budget savings annually • Step/Column costs of 1.5% year over year • Pension increase year over year • Removal of 2018/19 onetime expenditures • Removal of deferred and carryover funds • Modesto City Schools
MYP Summary Unrestricted Fund Balance 2017/18 2018/19 2019/20 2020/21 Fund Balance $68,784,593 $62,283,744 $46,757,229 $31,569,463 Nonspendable – Stores, Revolving Cash, $1,927,026 $1,500,000 $1,500,000 $1,500,000 Prepaid Expenses Assigned Economic Uncertainties $11,563,364 $11,975,577 $11,940,488 $12,174,501 County Cash FMV Adjustments <$344,721> <$344,721> <$344,721> <$344,721> LCAP Supplemental & Concentration $8,471,571 $7,398,099 $9,771,676 $11,379,540 Carryover Obligation – Misc. $1,395,676 $1,738 $1,738 $1,738 One Time Expenditures $-0- $92,029 $250,000 $250,000 Unassigned Balance $45,771,677 $41,661,021 $23,638,048 $6,608,405 Unassigned Reserve Percentage 17.06% 14.69% 8.24% 2.26% Modesto City Schools
MYP Summary Unrestricted Fund Balance Trend 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 $80,000,000 $68,784,593 $70,000,000 $62,283,744 $60,000,000 $46,757,229 $50,000,000 $40,000,000 $45,771,677 $31,569,463 $41,661,021 $30,000,000 $22,063,831 $18,875,292 $20,000,000 $23,638,048 $10,000,000 $6,608,405 $0 ($10,000,000) ($5,176,930) ($10,537,552) ($20,000,000) Ending Balance Unassigned Balance Modesto City Schools
MYP Summary Items NOT included in projections: • Future impacts from Collective Bargaining Agreements • Potential increases in the Special Education Contribution Modesto City Schools
Criteria and Standards • Criterion 6 – Change in Operating Revenues and Expenditures The District does not reflect deferrals and carryover at adoption. Additionally, the subsequent years reflect the remove of all onetime funding and expenditures. • Criterion 8 – Deficit Spending Deficit spending is a result of spending onetime carryover funds, projected step and column increase and impacts of pension reform. Modesto City Schools
Criteria and Standards • Criterion S5 – Contributions, Transfers and Capital Projects The change since adoption is the result of three items: The Routine Restricted Maintenance (RRM) contribution returns to the 3% minimum requirement in 2019/20 as required by LCFF gap closure guidelines. Additional transfers in from the Curriculum Reserve Fund for the purchase of Language Arts, Social Science, History and CTE curriculum adoptions. Transfers out in 2020/21 reflect the continuation of the $2M transfer from RRM to Deferred Maintenance. Modesto City Schools
Next Steps Based on the factors and assumptions included and noted in the First Interim Budget document, the District is able to propose a Positive Certification. Modesto City Schools
Questions Modesto City Schools
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