An argument that the RIF is not needed this year These are the - - PowerPoint PPT Presentation

An argument that the RIF is not needed this year

Description 2019-20 2020-21 2021-22 Beginning Fund Balance 40,256,224 $ 27,704,097 $ 20,512,715 $ Plus: Revenues/Other Sources 290,648,798 $ 292,828,851 $ 297,037,550 $ Total Available 330,905,022 $ 320,532,948 $ 317,550,265 $ Less: Expenditures/Other Uses 303,200,925 $ 300,020,233 $ 306,241,028 $ Ending Fund Balance 27,704,097 $ 20,512,715 $ 11,309,237 $ Projected Revenue Greater(Less) than Expenditure (12,552,127) $ (7,191,382) $ (9,203,478) $ Restricted "RESERVE" or Legally Restricted Balance 2,854,863 $ 2,140,024 $ 1,555,206 $ ”RESERVE” Required (3% ) 9,096,028 $ 9,000,607 $ 9,187,231 $ Note: Fund Balance Reserves - Inventories/Prepaids 1,687,417 $ 1,065,025 $ 180,557 $ Undesignated/Unappropriated 14,065,789 $ 8,307,059 $ 386,243 $ Reserve Percentage 8.20% 6.12% 3.19%

Multi-Year Projection Years - 2019-20 Thru 2021-22

Total General Fund 2019-2020 1st Interim Report

19

These are the district’s current projections, including lay-offs going into next year

2019-20 2020-21 2021-22 Beginning Reserve 40,256,224 27,704,097 20,512,715 Revenue 290,648,798 292,828,851 297,037,550 Expenditures 303,200,925 300,020,233 306,241,028

• Deficit / +Surplus
• 12,552,127
• 7,191,382
• 9,203,478

Ending Reserve 27,704,097 20,512,715 11,309,237 Reserve % (Must be greater than 3) 8.2 6.12 3.19

These are the same projections, but only the essential information

2019-20 2020-21 2021-22 Beginning Reserve 40,256,224 27,704,097 20,512,715 Revenue 290,648,798 292,828,851 297,037,550 Expenditures 303,200,925 300,020,233 306,241,028

• Deficit / +Surplus
• 12,552,127
• 7,191,382
• 9,203,478

Ending Reserve 27,704,097 20,512,715 11,309,237 Reserve % (Must be greater than 3) 8.2 6.12 3.19

To start, we will focus on the current year

The following are our current expenditures (actuals) as

• f December 31st, 2019 (exactly halfway through the

budgetary cycle of July 1st – June 30th)

General Fund 1 (Made up of funds 3, 5, and 6) Budgeted Expended Encumbered Balance Fund 3 210,435,614 104,687,486 101,218,355 4,529,773 Fund 5 53,385,173 20,565,092 21,844,168 10,975,913 Fund 6 39,380,137 9,130,050 8,716,348 21,533,739 Total 303,200,924 134,382,628 131,778,871 37,039,425

The following are our current expenditures (actuals) as

• f December 31st, 2019 (exactly halfway through the

budgetary cycle of July 1st – June 30th)

General Fund 1 (Made up of funds 3, 5, and 6) Budgeted Expended Encumbered Balance Fund 3 210,435,614 104,687,486 101,218,355 4,529,773 Fund 5 53,385,173 20,565,092 21,844,168 10,975,913 Fund 6 39,380,137 9,130,050 8,716,348 21,533,739 Total 303,200,924 134,382,628 131,778,871 37,039,425 At the end of the year: * 7 million will be transferred from Fund 3 to fund 68 * 13 million will be “phantom” expended from Fund 6

The following are our current expenditures (actuals) as

• f December 31st, 2019 (exactly halfway through the

budgetary cycle of July 1st – June 30th)

General Fund 1 (Made up of funds 3, 5, and 6) Budgeted Expended Encumbered Balance Fund 3 210,435,614 104,687,486 101,218,355 11,529,773 Fund 5 53,385,173 20,565,092 21,844,168 10,975,913 Fund 6 39,380,137 9,130,050 8,716,348 8,533,739 Total 303,200,924 134,382,628 131,778,871 31,039,425 At the end of the year: * 7 million will be transferred from Fund 3 to fund 68 * 13 million will be “phantom” expended from Fund 6 * The 31,039,425 reflects how much we are under projection

The following 5 slides are specific examples of large projected amounts that can be reduced to reflect a more accurate expenditure amount

*Encumbered represents an amount of the budget that is held in suspense for a future expenditure.

Possible Over-projected Amounts (Fund 3)

Codes Budgeted Expended Encumbered Balance Function 100x, OBJECT CODE 1110

(Teacher’s salaries)

86,351,413 41,710,457 41,619,746 3,021,209 OBJECT CODE 4310

(Classroom/office supplies)

• 234,971

171,032 102,830

• 508,834

OBJECT CODE 4399

(Carry over)

322,110 322,110 OBJECT CODE 5000

(Services and other operating expenditures)

1,212,018 127,695 954,977 129,344 Function 210x, OBJECT CODE 1350

(MGT Coordinator)

71,188 71,188 Function 249x, OBJECT CODE 1904

(Teacher on special assignment)

1,900,249 886,507 774,904 238,837 Function 270x, OBJECT CODE 2410

(Clerical personnel)

4,359,974 1,899,317 1,977,798 482,859

More Possible Over-projected Amounts

Codes Budgeted Expended Encumbered Balance Function 311x, OBJECT CODE 1210

(Counselors)

5,878,866 2,909,549 2,883,671 85,645 Function 360x, OBJECT CODE 2000

(salaries)

1,855,972 837,241 781,983 236,747 Function 390x, OBJECT CODE 2910

(Hourly classified)

212,100 10,047 202,052 OBJECT CODE 5000

(Services and other operating expenditures)

763,710 298,789 178,365 286,555 Function 420x, OBJECT CODE 2910

(Hourly classified)

1,201,439 474,330 727,108 Function 770x, OBJECT CODE 5000

(Services and other operating expenditures)

1,051,469 350,705 80,375 620,388

More Possible Over-projected Amounts

Codes Budgeted Expended Encumbered Balance Function 810x, OBJECT CODE 2000

(salaries)

5,159,996 2,501,137 2,338,832 320,026 OBJECT CODE 5000

(Services and other operating expenditures)

7,346,394 2,451,085 4,457,818 437,490 Fund 5 Function 111x, OBJECT CODE 1110

(Teacher Salaries)

5,116,423 2,370,471 2,342,020 453,932 OBJECT CODE 1152

(Substitutes, Non Illness)

125,983 11,956 114,027 OBJECT CODE 2113

(Paraeducator subs)

906,728 42,001 864,727 Function 118x, OBJECT CODE 5000

(Services and other operating expenditures)

4,280,028 1,577,992 3,540,212

• 838,175

More Possible Over-projected Amounts

Codes Budgeted Expended Encumbered Balance Function 119x, OBJECT CODE 5100

(Sub agreements)

355,549 10,428 83,327 261,749 Function 249x, OBJECT CODE 1901

(Extra time)

219,571 7,004 212,566 Function 311x, OBJECT CODE 5100

(Sub agreements)

770,000 63,141 462,788 244,070 Function 312x, OBJECT CODE 5100

(Sub agreements)

641,000 108,690 194,309 338,000 Function 314x, OBJECT CODE 5000

(Services and other operating expenditures)

512,600 69,027 110,972 332,600 Function 315x, OBJECT CODE 5000

(Services and other operating expenditures)

629,280 9,460 103,810 530,493

More Possible Over-projected Amounts

Codes Budgeted Expended Encumbered Balance FUND 6 Function 100x, OBJECT CODE 1110 (Teacher salaries) 1,734,220 719,652 434,275 580,293 OBJECT CODE 4000 (this one is messy)

(books, materials, supplies, capital outlay, equipment)

2,366,606 425,278 316,324 1,625,003 OBJECT CODE 5000

(services and other operating expenditures)

888,717 437,930 212,738 238,048 Function 390x OBJECT CODE 4310

(Classroom/office supplies)

470,896 7,089 1,734 462,072 OBJECT CODE 4399

(Carry over)

535,250 535,250 OBJECT CODE 5000

(services and other operating expenditures)

547,880 128,880 47,260 371,700

Total from left-over balances from the specified examples: 12,999,079

• 1000 & 2000 (salaries): 7,611,216
• 3000 (benefits): 0
• 4000 (books, materials, supplies, capital outlay, equipment): 2,435,601
• 5000 (services and other operating expenditures): 2,952,262

Broken down by OBJECT CODE

2019-20 2020-21 2021-22 Beginning Reserve 40,256,224 27,704,097 20,512,715 Revenue 290,648,798 292,828,851 297,037,550 Expenditures 303,200,925 300,020,233 306,241,028

• Deficit / +Surplus
• 12,552,127
• 7,191,382
• 9,203,478

Ending Reserve 27,704,097 20,512,715 11,309,237 Reserve % (Must be greater than 3) 8.2 6.12 3.19 Again, these are the district’s projections (as of the First Interim - December) including a RIF

2019-20 2020-21 2021-22 Beginning Reserve 40,256,224 27,704,097 20,512,715 Revenue 290,648,798 292,828,851 297,037,550 Expenditures 290,201,846 300,020,233 306,241,028

• Deficit / +Surplus

+446,952

• 7,191,382
• 9,203,478

Ending Reserve 40,703,176 20,512,715 11,309,237 Reserve % (Must be greater than 3) ~14% 6.12 3.19 These are the revised projections for this year if you incorporate the specific examples that could be adjusted to reflect a more accurate projected expenditure amount. As you can see, the deficit goes away.

Now, no one thinks the entire 12,999,079 will be over-projected. But, remember, the 12,999,079 only reflects a portion of the remaining balance.

General Fund 1 (Made up of funds 3, 5, and 6) Budgeted Expended Encumbered Balance Fund 3 210,435,614 104,687,486 101,218,355 11,529,773 Fund 5 53,385,173 20,565,092 21,844,168 10,975,913 Fund 6 39,380,137 9,130,050 8,716,348 8,533,739 Total 303,200,924 134,382,628 131,778,871 31,039,425

12,999,079 only reflects the largest amounts of the remaining balance of 31,039,425

But let’s assume that the district’s numbers are accurate for this school year (2019-2020)

2019-20 2020-21 2021-22 Beginning Reserve 40,256,224 27,704,097 20,512,715 Revenue 290,648,798 292,828,851 297,037,550 Expenditures 303,200,925 300,020,233 306,241,028

• Deficit / +Surplus
• 12,552,127
• 7,191,382
• 9,203,478

Ending Reserve 27,704,097 20,512,715 11,309,237 Reserve % (Must be greater than 3) 8.2 6.12 3.19 Here we are, again starting with the district’s projections as of December, including a RIF

2019-20 2020-21 2021-22 Beginning Reserve 40,256,224 27,704,097 20,512,715 Revenue 290,648,798 292,828,851 297,037,550 Expenditures 303,200,925 300,020,233 306,241,028

• Deficit / +Surplus
• 12,552,127
• 7,191,382
• 9,203,478

Ending Reserve 27,704,097 20,512,715 11,309,237 Reserve % (Must be greater than 3) 8.2 6.12 3.19 We will only focus on next school year, 2020-2021, but we will assume there will be no RIF

# Description Total Current FTE Positions Preliminary Proposed Reductions in FTEs Net Budget Savings Certificated Classified Management 1 Supplemental Retirement Incentive Plan (SERP) $241,620 2 1 Staff Development Day (1st Day) $914,889 3 10% cut of Personnel at District Office 11 $990,000 4 10% cut on all Discretionary Budgets $980,000 5 Special Education Contracts $3,500,000 6 Management (District Office) 8 $1,096,600 7 Transfer Expense to Ed Tech Bond $1,000,000 8 Reduce Contract Services $500,000 9 Course Consolidation $210,000 10 City Year Contract $243,500 Total $9,676,609 11 Advisors 26 26 $3,172,000 12 Librarians 5.8 5.8 $707,600 13 Subject Area Coordinators (SACS) 3.8 3.8 $463,600 14 Athletic Directors (.2) 4.2 4.2 $512,400 15 Activities Directors (.4) 6.6 6.6 $805,200 16 Instructional Coaches (Induction Program) 8 2 $244,000 17 Counselors (Gen Fund) 24.6 24.6 $3,000,000 Total $8,904,800 18 Support Services Technicians 12 12 $1,080,000 19 Custodians 87 22 $1,980,000 20 Language Assessment Clerks 4 4 $360,000 21 Parent Involvement Specialists (PCIS) 15 15 $1,305,000 22 Bookroom Clerks 1 1 $90,000 Total $4,815,000 Sub Total 73 65 8 Totals 198 Total Proposed Reduced FTEs 146 $23,396,409

• Total cost-reductions proposed: 23,396,409
• Total amount from laid-off staff: 15,806,400
• So, 15,806,400 needs to be added

to the 2020-21 expenditures We will use the proposed RIFs released at the January study session to generate a total that needs to be added to next year’s expenditures

2019-20 2020-21 2021-22 Beginning Reserve 40,256,224 27,704,097 20,512,715 Revenue 290,648,798 292,828,851 297,037,550 Expenditures 303,200,925 315,826,633 306,241,028

• Deficit / +Surplus
• 12,552,127
• 22,997,782
• 9,203,478

Ending Reserve 27,704,097 4,706,315 11,309,237 Reserve % (Must be greater than 3) 8.2 1.49 3.19

• The expenditures for 2020-2021 below reflect the addition of the 15,806,400
• This leaves a reserve less than 3%, but we forgot something …

# Description Total Current FTE Positions Preliminary Proposed Reductions in FTEs Net Budget Savings Certificated Classified Management 1 Supplemental Retirement Incentive Plan (SERP) $241,620 2 1 Staff Development Day (1st Day) $914,889 3 10% cut of Personnel at District Office 11 $990,000 4 10% cut on all Discretionary Budgets $980,000 5 Special Education Contracts $3,500,000 6 Management (District Office) 8 $1,096,600 7 Transfer Expense to Ed Tech Bond $1,000,000 8 Reduce Contract Services $500,000 9 Course Consolidation $210,000 10 City Year Contract $243,500 Total $9,676,609 11 Advisors 26 26 $3,172,000 12 Librarians 5.8 5.8 $707,600 13 Subject Area Coordinators (SACS) 3.8 3.8 $463,600 14 Athletic Directors (.2) 4.2 4.2 $512,400 15 Activities Directors (.4) 6.6 6.6 $805,200 16 Instructional Coaches (Induction Program) 8 2 $244,000 17 Counselors (Gen Fund) 24.6 24.6 $3,000,000 Total $8,904,800 18 Support Services Technicians 12 12 $1,080,000 19 Custodians 87 22 $1,980,000 20 Language Assessment Clerks 4 4 $360,000 21 Parent Involvement Specialists (PCIS) 15 15 $1,305,000 22 Bookroom Clerks 1 1 $90,000 Total $4,815,000 Sub Total 73 65 8 Totals 198 Total Proposed Reduced FTEs 146 $23,396,409

• Total cost-reductions proposed: 23,396,409
• Total amount from laid-off staff: 15,806,400
• 15,806,400 was added to 2020-21 expenditures
• 7,590,009 in other cost-reductions from rows 1, 2,

4, 5, 7, 8, 9 and 10 also need to be applied to next year’s expenditures There is no reason we wouldn’t add the other cost-savings measures proposed by the district Remember …

2019-20 2020-21 2021-22 Beginning Reserve 40,256,224 27,704,097 Put Revenue 290,648,798 292,828,851 all Expenditures 303,200,925 308,236,624 Lay-offs

• Deficit / +Surplus
• 12,552,127
• 15,407,773

Into Ending Reserve 27,704,097 12,296,324 This Reserve % (Must be greater than 3) 8.2 3.99 Year

• When we apply the 7,590,009 reduction, 2020-2021’s projected expenditures look as follows
• Now, we have a reserve above 3% (not even factoring potential yet-to-be calculated savings from the SERP)
• This allows the district to put all the layoffs in the 2021-22 school year just as the district did 2 years ago

Is there reason to think the district’s projections are accurate?

Past projections based on First Interim Report

December Projections Vs End of Year Actuals 2012- 2013 2013- 2014 2014- 2015 2015- 2016 2016- 2017 2017- 2018 2018- 2019 2019- 2020 December Projections 2 million deficit 8.5 million deficit 8 million deficit 5.6 million surplus 5 million deficit 8 million deficit 9 million deficit 12 million deficit End of Year Actuals 2.5 million surplus 1 million surplus 5.5 million deficit 10 million surplus 3 million deficit 3 million deficit 500 thousand deficit ? Difference 4.5 million 9.5 million 2.5 million 4.4 million 2 million 5 million 8.5 million ? Average difference = 5.2 million

• The district always projects conservatively, which is not necessarily a bad thing
• But this conservative nature must be accounted for when factoring how much we should value their projections

FY 2017‐2018 Multi‐Year Budget with May Revisions

Total General Fund (Combined) FY 2017‐18 FY 2018‐19 FY 2019‐20

Revenues

265,900,121 271,401,797 268,175,732

Expenses

280,693,386 289,664,011 296,529,818

Net Increase (Decrease)

(14,793,265) (18,262,214) (28,354,086)

Other Sources/Uses

1,019,626 1,290,000 1,150,000

Beginning Balance

38,725,221 22,912,330 3,360,116

Ending Balance before Reserve

22,912,330 3,360,116 (26,143,970)

Revolving Cash & Stores

202,480 202,480 202,480

General Fund Reserves F/17

8,424,042 8,748,282 ‐0‐

Ending Fund Balance (Est.)

31,538,852 12,310,879 (27,042,996) *

• Est. Reserve %

10.10% 3.44% (6.08%)

16

*Note: Ending Fund Balance excluding Restricted fund balance of $899 K

• These are the district’s projections from June 2017, the same year they originally proposed the RIF
• In 2017-18, we deficit spent about 3 million. In 2018-19, about 500K
• During the 2017-2018 school year, the board decided to put the layoffs into future years

2019-20 2020-21 2021-22 Beginning Reserve 40,256,224 27,704,097 Put Revenue 290,648,798 292,828,851 all Expenditures 303,200,925 308,236,624 Lay-offs

• Deficit / +Surplus
• 12,552,127
• 15,407,773

Into Ending Reserve 27,704,097 12,296,324 Future Reserve % (Must be greater than 3) 8.2 3.99 Years

The same strategy can be applied to this budget.

Also, remember that our original budget for this year projected an 18-million-dollar deficit

Description 2019-20 2020-21 2021-22 Beginning Fund Balance (incl. Fund 17) 36,854,464 $ 18,820,514 $ 13,226,749 $ Plus: Revenues/Other Sources 281,707,250 $ 284,899,523 $ 290,588,250 $ Total Available 318,561,714 $ 303,720,037 $ 303,814,999 $ Less: Expenditures/Other Uses 299,741,200 $ 290,493,288 $ 293,732,067 $ Ending Fund Balance (incl. Fund 17) 18,820,514 $ 13,226,749 $ 10,180,112 $ Projected Revenue Greater(Less) than Expenditure (18,033,950) $ (5,593,765) $ (3,143,817) $ Restricted "RESERVE" or Legally Restricted Balance 2,178,509 $ 713,227 $ 670,017 $ ”RESERVE” Required (3% ) 8,992,236 $ 8,714,799 $ 8,811,962 $ Note: Fund Balance Reserves - Inventories/Prepaids 1,762,066 $ 1,026,553 $ 686,827 $ Undesignated/Unappropriated 5,887,703 $ 2,772,170 $ 11,306 $ Reserve Percentage 5.55% 4.31% 3.24% Multi-Year Projection Years - 2019-20 Thru 2021-22

Total General Fund (incl. Fund 17) 2019-2020 Proposed Adopted Budget Report – With RIFs and CalSTRS Proposal

Description 2019-20 2020-21 2021-22 Beginning Fund Balance 40,256,224 $ 27,704,097 $ 20,512,715 $ Plus: Revenues/Other Sources 290,648,798 $ 292,828,851 $ 297,037,550 $ Total Available 330,905,022 $ 320,532,948 $ 317,550,265 $ Less: Expenditures/Other Uses 303,200,925 $ 300,020,233 $ 306,241,028 $ Ending Fund Balance 27,704,097 $ 20,512,715 $ 11,309,237 $ Projected Revenue Greater(Less) than Expenditure (12,552,127) $ (7,191,382) $ (9,203,478) $ Restricted "RESERVE" or Legally Restricted Balance 2,854,863 $ 2,140,024 $ 1,555,206 $ ”RESERVE” Required (3% ) 9,096,028 $ 9,000,607 $ 9,187,231 $ Note: Fund Balance Reserves - Inventories/Prepaids 1,687,417 $ 1,065,025 $ 180,557 $ Undesignated/Unappropriated 14,065,789 $ 8,307,059 $ 386,243 $ Reserve Percentage 8.20% 6.12% 3.19%

Multi-Year Projection Years - 2019-20 Thru 2021-22

Total General Fund 2019-2020 1st Interim Report

19

And that original projected deficit has been reduced to 12.5 million

Past projections based on First Interim Report

December Projections Vs End of Year Actuals 2012- 2013 2013- 2014 2014- 2015 2015- 2016 2016- 2017 2017- 2018 2018- 2019 2019- 2020 December Projections 2 million deficit 8.5 million deficit 8 million deficit 5.6 million surplus 5 million deficit 8 million deficit 9 million deficit 12 million deficit End of Year Actuals 2.5 million surplus 1 million surplus 5.5 million deficit 10 million surplus 3 million deficit 3 million deficit 500 thousand deficit ? Difference 4.5 million 9.5 million 2.5 million 4.4 million 2 million 5 million 8.5 million ? Average difference = 5.2 million

And remember the district’s history of projections, even when based on the First Interim report

And compare the district’s current projections to the current balances

General Fund 1 (Made up of funds 3, 5, and 6) Budgeted Expended Encumbered Balance Fund 3 210,435,614 104,687,486 101,218,355 11,529,773 Fund 5 53,385,173 20,565,092 21,844,168 10,975,913 Fund 6 39,380,137 9,130,050 8,716,348 8,533,739 Total 303,200,924 134,382,628 131,778,871 31,039,425

12,999,079 only reflects the largest balances

And ask yourself if you think a RIF is needed

Just to note …

Our enrollment is up

As of January 31st, 2019 22,228 As of January 31st, 2020 22,460

Questions / Comments?