+ 2018-19 UNAUDITED ACTUALS FINANCIAL REPORT Dawnalyn Murakawa-Leopard, EdD, Deputy Superintendent September 4, 2019 Ma Manhattan Beach ch Unified Sch chool District ct 325 325 S. Peck Avenue Ma Manhattan Beach ch, CA 90266 Ph Phon one: (310) 318-7345, 7345, x590 5900
3 2018-19 REVENUE Es Estim imated ed Actua uals ls Unaudited Un Difference Di % Change % (2 (2019-20 20 Ad Adopted Actuals Ac Budget) Bu LCFF $54,782,295 $54,712,051 ($70,244) -0.13% Sources Federal $2,100,883 $2,117,463 $16,580 0.79% Revenue Other State $9,828,205 $11,268,668 $1,440,463 14.66% Revenue Other Local $17,499,500 $17,609,162 $109,662 0.63% Revenue Total $84,210,883 $85,707,344 $1,496,461 1.78% Revenue Unaudited Actuals – 09/04/19
REVENUE CHANGES 4 n The largest change is due to recent information that Districts must record the State’s contribution to CalPERS on behalf of employees as both revenue to the District and an expense of the District. This results in an increase of $782,744. n Similarly, due to salary increases, the State’s CalSTRS On- Behalf contribution increased by $468,206 n Other changes include: n $328,095 in increased local revenue in the form of a workers’ compensation rebate from ASCIP n $160,957 in increased state lottery revenue Unaudited Actuals – 09/04/19
REVENUE CHANGES 5 n Other changes include: n $78,552 in increased local revenue to offset the facilities-related costs of running the SELPA Regionalized Program for DHH program n $37,735 in increased local revenue for interest n $36,643 in increased local revenue for facility rentals n $25,516 in increased local revenue for targeted donations n $277,521 in decreased revenue for special education n $133,382 in decreased revenue, reflecting revenue that will be received in 2019-20, for the State Low Performing Student Block Grant n $80,829 in decreased revenue for unpaid amounts under Measure MB n $70,244 in decreased LCFF revenue due to prior year adjustments Unaudited Actuals – 09/04/19
6 MEASURE MB n On June 5, 2018, Manhattan Beach voters approved Measure MB, providing for an annual tax of $225 per parcel to provide stable, reliable revenue for District schools. n The 2018-19 assessment includes 13,091 eligible parcels, of which 1,888 have qualified for exemptions (1,884 exemptions for senior citizens, and 4 exemptions for SSI/SSDI recipients), creating a 14.4% exemption rate. n The remaining parcels were anticipated to result in $2,473,200 in revenue to the District, assuming a 100% rate of payment. In actuality, revenue in the amount of $2,391,921 has been collected to date. n This revenue will remain stable for six years, through 2023-24, and will allow the District to avoid anticipated reductions in the immediate future. Unaudited Actuals – 09/04/19
7 2018-19 EXPENSE Es Estim imated ed Actua uals ls Un Unaudited % % Di Difference (2 (2019-20 20 Ad Adopted Actuals Ac Ch Change Budget) Bu Certificated $35,267,437 $35,513,032 $245,595 0.70% Classified $13,791,503 $14,181,603 $390,100 2.83% Benefits $20,457,774 $21,689,553 $1,231,779 6.02% Supplies $2,932,116 $2,490,285 ($441,831) -15.07% Services $14,261,159 $13,685,758 ($575,401) -4.03% Capital Outlay $765,335 $384,612 ($380,723) -49.75% Other Outgo $495,948 $700,309 $204,361 41.21% Indirect ($102,000) ($86,209) $15,791 15.48% Total $87,869,272 $88,558,943 $689,671 0.78% Unaudited Actuals – 09/04/19
EXPENSE CHANGES 8 Changes to expense include: n $ 782,744 in additional costs for CalPERS on-behalf payments n $468,206 in additional costs for CalSTRS on-behalf payment adjustments n $223,377 in increased costs for special education n $197,744 in increased certificated costs resulting from salary adjustments n $340,890 in reduced state grant program costs (Low Performing Students, College Readiness, Classified Professional Development) n $314,445 in reduced expenditures for maintenance n $224,732 in reduced expenditures for instructional materials, technology, conferences, and legal fees n $83,813 in reduced expenditures for Fund 06 and MBEF Unaudited Actuals – 09/04/19
MULTI-YEAR PROJECTION 9 ADOPTED BUDGET (as of 6/20/19) 2018-19 2019-20 2020-21 2021-22 Beg Balance $11,149,419 $7,491,030 $3,719,171 $2,824,410 Revenues $84,210,883 $82,017,677 $82,841,579 $83,660,135 Expenses $87,869,272 $85,789,536 $83,736,340 $83,537,302 Net Inc/(Dec) ($3,658,389) ($3,771,859) ($874,761) $122,833 Ending Bal $7,491,030 $3,597,822 $2,581,712 $2,583,195 Undesignated $774,453 $676,290 $282,319 $411,123 Ending Bal. eliminates escrow ($2.4M); REU dropped to 3% in 2019-20 equivalent of 62 (42.5+19.5) positions eliminated Unaudited Actuals – 09/04/19
10 MYP CHANGES A number of changes have been incorporated into the District’s 2019-20 budget and into its Multi Year Projection. These include: n $833,120 added to the 2019-20 beginning fund balance as a result of year-end close and unaudited actual totals n $782,744 added to both revenue and expense to describe the State’s On-Behalf contributions to CalPERS n $646,200 in additional one-time (2019-20) revenue for preschool special education services. At the 45 day budget revision this was listed as restricted funding; per recent guidance this has now been identified as unrestricted funding. n $820,124 in ongoing reduced expenditures for special education and utility services Unaudited Actuals – 09/04/19
11 MYP CHANGES – STRS/PERS CalPERS CalSTRS Prior Prior Adopted Current Adopted Current Projection Projection 2014-15 11.771% 8.880% 2015-16 11.847% 10.730% 2016-17 13.888% 12.580% 2017-18 15.532% 14.430% 2018-19 18.062% 16.280% 2019-20 20.733% 20.733% 19.721% 18.13% 16.700% 17.100% 2020-21 23.600% 23.600% 22.700% 19.10% 18.100% 18.400% 2021-22 24.900% 24.900% 24.600% 18.40% 17.800% 18.100% 2022-23 25.700% 25.700% 25.400% 18.40% 17.800% 18.100% 2023-24 26.400% 26.400% 26.100% 18.40% 17.800% 18.100% 2024-25 26.600% 26.600% 26.300% 18.40% 17.800% 18.100% 2025-26 26.500% 26.500% 26.200% 18.40% 17.800% 18.100% (CalPERS board adjusts rates based on actuarial projections; CalSTRS rates are set by law but rates may change in order to exhaust unfunded liability by 2045-46) Unaudited Actuals – 09/04/19
MULTI-YEAR PROJECTION 12 UNAUDITED ACTUALS 2018-19 2019-20 2020-21 2021-22 Beg Balance $11,149,419 $8,324,150 $6,032,330 $3,549,751 Revenues $85,707,344 $83,454,138 $83,631,840 $84,450,396 Expenses $88,558,943 $85,745,959 $84,114,419 $85,420,075 Net Inc/(Dec) ($2,851,599) ($2,291,821) ($2,482,579) ($969,679) Ending Bal $8,324,150 $6,032,330 $3,549,751 $2,580,072 Undesignated $1,276,290 $1,314,974 $959,801 $10,952 Ending Bal. eliminates escrow ($2.4M); REU dropped to 3% in 2020-21 equivalent of 45 (22.5+22.5) positions eliminated Unaudited Actuals – 09/04/19
HISTORICAL CHANGE 13 Ad Adopted Un Unaudited % of % f Di Difference Bud Budget et Ac Actuals Bud Budget et 2018-19 ($145,480) ($2,851,599) ($2,706,119) -3.51% 2017-18 ($3,303,012) ($2,300,560) $1,002,452 1.36% 2016-17 ($3,339,507) ($75,426) $3,264,081 4.44% 2015-16 ($683,646) $79,099 $762,745 1.11% 2014-15 ($3,211,807) ($1,402,406) $1,809,401 2.88% 2013-14 ($2,977,006) $1,127,733 $4,104,739 7.16% 2012-13 ($5,682,446) ($2,956,203) $2,726,243 4.70% 2011-12 ($2,176,236) ($1,078,135) $1,098,101 2.08% 2010-11 ($982,431) $3,590,769 $4,573,200 8.96% 2009-10 ($1,803,202) $1,625,988 $3,429,190 6.79% 10 Year Average Difference $1,967,287 3.60% 5 Year Average Difference $748,279 1.26% Unaudited Actuals – 09/04/19
PROJECTED 14 SURPLUS/DEFICIT 2018-19 2019-20 2020-21 2021-22 Surplus/(Deficit) – ($2,851,599) ($3,771,859) ($2,482,579) ($969,679) no “swing” Surplus/(Deficit) – ($2,694,653) ($1,411,834) $88,682 1.26% “swing” A consistent 1.26% swing would allow: n Elimination of escrow in 2020-21 instead of 2019-20 n Elimination of the equivalent of 26.5 (12+14.5) positions instead of 45 n Maintenance of 5% REU until 2021-22, when it would drop to 3% Unaudited Actuals – 09/04/19
NEXT STEPS 15 n Continue to track and analyze changes in revenue and expense between Budget Adoption and Unaudited Actuals n Monitor expenditures and budgetary needs carefully n Continue to encourage fiscal restraint n Be mindful of restraints on revenue: n COLA only increases to the LCFF n Declining enrollment n 6-year life span of Measure MB n Complete the planned Special Education program review and consider any resulting recommendations n Review all budgets to identify ongoing and deferred needs Unaudited Actuals – 09/04/19
+ 2018-19 UNAUDITED ACTUALS FINANCIAL REPORT Dawnalyn Murakawa-Leopard, EdD, Deputy Superintendent September 4, 2019 Ma Manhattan Beach ch Unified Sch chool District ct 325 325 S. Peck Avenue Ma Manhattan Beach ch, CA 90266 Ph Phon one: (310) 318-7345, 7345, x590 5900
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