2018-19 A DOPTED B UDGET F INANCIAL R EPORT C OVINA -V ALLEY U NIFIED S CHOOL D ISTRICT B OARD OF E DUCATION M EETING – J UNE 26, 2017 B USINESS AND F ISCAL S ERVICES 1
Annual Budget Cycle We are Adopted here! Budget 2018-19 (July) Adopted Revised Budget Adopted 2018-19 Budget (June) (45 Days) 1 st Interim May Financial Revise Report (December) Governor’s Preliminary Budget Report Proposal (April) (January ) 2 nd Interim 2 Financial Report (March)
L EGAL R EQUIREMENTS Board action is required for Budget Adoption in accordance with Education Code 42127 Board Members must authorize an Operating Budget by June 30 th of each year No later than five days after Adoption or by July 1 st , whichever occurs first, the Operating Budget must be filed with the County Superintendent of Schools 3
2018-19 L OCAL C ONTROL F UNDING F ORMULA The January Budget proposed $2.9 billion for continued implementation of the LCFF- GAP funding May Revision proposes more than $3.2 billion for continued implementation of the LCFF- GAP funding, $300 million above the January level New funding is estimated to reach full implementation in 2018-19, two years earlier than planned 4
P ROPOSITION 98 S TILL G OVERNS THE L EVEL OF F UNDING Recent years have started with low revenue forecasts that got better Over the last five years, multi-billion dollar increases in the Proposition 98 minimum guarantee were common at the May Revision due to the Department of Finance’s (DOF) conservative forecasts While tax collections are exceeding the January forecast, analysts believe that the growth in General Fund revenues is due in part to taxpayers shifting income from 2017 to 2018 to take advantage of the new lower federal tax rates In addition, the Governor is still planning for a recession and focused on building reserves and limiting new ongoing obligations Therefore, while the May Revision shows increased General Fund revenues, the growth to Proposition 98 is minimal 5
J ANUARY B UDGET V S . M AY R EVISION Item January Budget May Revision LCFF Gap Funding 100.00% 100.00% Proposition 98 Minimum Funding Guarantee 2016-17 $71.4 billion $71.6 billion 2017-18 $75.2 billion $75.6 billion 2018-19 $78.3 billion $78.4 billion 2018-19 COLA 2.51% 2.71% One Time Discretionary $1.8 billion $2.02 billion Funds for 2018-19 $295 per ADA $344 per ADA 6
C OVINA -V ALLEY USD 2018-19 G ENERAL F UND B UDGET A SSUMPTIONS Local Control Funding Formula › LCFF at full implementation › COLA updated to 3.00% › Unduplicated pupil count at 69.60% Projected enrollment decline › 300 - 2018/19 through 2020/21 (100 each year) Federal, State, and Local › Contracted salary agreement not settled › Health and Welfare 6.5% increase › STRS and PERS Increases › 3% RRM contribution implemented 2020-21 › Potential budget revisions 7
M AJOR C HANGES S INCE THE S ECOND I NTERIM ( IN MILLIONS ) (Cost Increase)/Savings 2018-19 2019-20 2020-21 Cumulative LCFF Funding Variables ($0.06) $0.76 $0.63 $1.33 Increase in lease revenue - Goals $0.07 $0.07 $0.07 $0.20 Increase for Child Nutrition ($0.06) ($0.06) ($0.06) ($0.18) negative balances transfer Decrease in OFL revenue ($0.91) ($0.91) ($0.91) ($2.73) Increase in Special Ed contribution ($0.38) ($0.38) ($0.38) ($1.14) 18-19 One-Time Funding $0.54 $0.00 $0.00 $0.54 Lowered H&W from 9.5% to 6.5% $0.00 $0.36 $0.78 $1.14 8
2018-19 A DOPTED B UDGET G ENERAL F UND R EVENUES Other Local/Financing Sources 3.65% Other State 13.9% Federal 4.39% Local Control Funding Formula 78.06% 9 Total Revenue = $150,778,069
2018-19 A DOPTED B UDGET G ENERAL F UND E XPENDITURES Other Outgo/Trans fer Out 4.3% Certificated Salaries 42.84% Operating Other Services 81.48% Classified 9.93% Salaries 14.42% Books and Employee Supplies Benefits 4.29% 24.22% 10 Total Expenditures = $152,196,223
M ULTI -Y EAR G ENERAL F UND B UDGET P ROJECTIONS Adopted Projected Projected Budget Budget Budget 2018-19 2019-20 2020-21 Beginning Fund Balance $28,350,153 $26,931,999 $20,491,704 Audit Adjustment/Restatement - - - Revised Fund Balance $28,350,153 $26,931,999 $20,491,704 Annual Revenues (includes other financing sources) $150,778,069 $149,364,239 $151,466,371 Annual Expenditures (include other financing uses) $152,196,223 $155,804,534 $159,482,569 Changes in Fund Balance ($1,418,154) ($6,440,295) ($8,016,198) Projected Ending Fund Balance $26,931,999 $20,491,704 $12,475,506 I. Unavailable Reserves: $6,062,512 $5,541,430 $7,019,109 1.) Nonspendable: a. Revolving Cash $35,000 $35,000 $35,000 b. Inventory $24,000 $24,000 $24,000 c. Prepaid Expenditures $1,142,940 $498,572 - 2.) Restricted Program Balances $4,860,572 $4,983,858 $6,960,109 3.) Assigned $827,574 $664,642 $664,642 II. Total Unrestricted Fund Balance $20,041,913 $14,285,632 $4,791,755 1.) Reserve for Economic Uncertainty (3%) $4,565,887 $4,674,137 $4,784,478 11 2.) Available Reserves $15,476,026 $9,611,495 $7,277 III. Available Reserves (Unrestricted Fund) 13.17% 9.17% 3.00%
S TRS /P ERS C OSTS T HROUGH 2023-24 2017-18 $12.5 Million 2023-24 $17.5 Million 2013-14 $6.7 Million $1,605 per student $1,072 per student $525 per student 30% 25.80% 25.30% 24.60% 23.50% 25% 20.80% 20% 18.06% 19.50% 19.50% 19.10% 19.10% 15.53% 18.13% 13.89% 15% 16.28% 11.77% 11.85% 11.44% 11.42% 14.43% 12.58% 10% 10.73% 8.88% PERS STRS 8.25% 8.25% 5% 12 0% 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24
P ER -ADA R EVENUE V S . E XPENSES $550 $500 $450 Special Education Contribution $400 Special Education $186 Contribution Special Education Supplemental- $70 $350 Contribution Concentration $102 Growth $139 Health and Welfare $300 Health and Welfare $ 84 $53 Health and Welfare $ 52 $250 Step and Column Step and Column Supplemental- $86 Step and Column $200 Concentration $95 $91 Growth $35 Supplemental- PERS Increase $33 Concentration Growth $98 $150 Base Growth PERS Increase $53 PERS Increase $40 $ 251 Base Growth $100 STRS Increase $188 Base Growth STRS Increase STRS Increase $144 $50 $ 116 $111 $107 $0 LCFF Growth Expenditures LCFF Growth LCFF Growth Expenditures Revenues Revenues Revenues 2018-19 2019-20 2017-18
C HALLENGES Structural Deficit - Working Toward Resolution. There is no such thing as a good budget without an adequate reserve Projected slight positive General Fund Balance in 2020-21 with additional planned expenditure reductions Future Funding – Enrollment and limited to COLA Special Education Program - Continual increases Routing Restricted Maintenance Reserve - 3% (2020-21) $1.6 million increase No Revenue source for STRS and PERS increases 14 Health and welfare ongoing increases
O THER F UNDS – P ROJECTED T OTALS 2018-19 ( IN MILLIONS ) Fund 40 Fund 10 Fund 11 Fund 12 Fund 13 Fund 21 Fund 25 Fund 67 Special Special Adult Child Cafeteria Building Capital Self Reserve Education Education Development Facilities Insurance for Capital Pass- Outlay Through � Beginning Fund $0.01 $2.41 $0.27 $4.91 $15.19 $0.98 $1.49 $0.98 Balance Revenue $60.10 $4.77 $2.73 $5.99 $12.15 $0.10 $0.00 $17.94 Expenditure $60.09 $3.87 $2.64 $7.55 $24.57 $0.40 $0.00 $17.94 Other Financing $0.00 $0.00 ($0.10) $0.11 $0.00 $0.00 $0.70 $0.00 Sources/Uses Ending Fund $0.02 $3.31 $0.26 $3.46 $2.77 $0.68 $2.19 $0.98 Balance 15
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