Board of Education 2019-20 Budget Adoption Second Reading June 25, - - PowerPoint PPT Presentation

Board of Education 2019-20 Budget Adoption Second Reading

SAN DIEGO UNIFIED SCHOOL DISTRICT

June 25, 2019

Presentation Agenda

2

• Funding Priorities
• Budget Adoption Guidance
• Multi-Year Assumptions and Projections
• Tax Revenue Anticipation Notes (TRANs)
• Budget Development Timeline

Funding Priorities

3

• LCAP
• Visual and Performing Arts
• Libraries
• Safety
• Mental Health
• Safe, Collaborative and

Inclusive Environments

• Vision 2020
• Professional Development
• K-3 Literacy
• Elementary Enrichment
• Language Immersion Programs
• Wellness
• High Quality Preschools

Financial Considerations

4

• 2020-21 Budget Shortfall
• CalPERS/STRS Rates
• Enrollment

Budget Adoption Guidance

5

• District’s Local Control and Accountability Plan, Adopted

Budget, Certification are reviewed and approved together

• San Diego County Office of Education (SDCOE) guidance letter

dated May 28, 2019, recommends planning factors for 2019-20 and multi-year projections based on Governor’s May Revision

• Subject to change pending State Legislature and Governor’s

approval

• Budget must be submitted to SDCOE by July 1, 2019 (E.C. 42127)
• The district is required to revise the adopted budget and submit

to SDCOE within 45 days of State Budget adoption, if there are significant changes

General Fund Multi-Year Assumptions REVENUES

6 Description 2019-20 2020-21 2021-22 LCFF/State Funding Model Declining Enrollment 101,674 100,149 98,647 COLA 3.26% 3.00% 2.80% Federal: Impact Aid $10.0M $10.0M $10.0M Other State Mandated Block Grant $ 3.9M $ 4.0M $ 4.1M Lottery (GFU $151; GFR $53) $204/ADA $204/ADA $204/ADA Transfers In $21.0M $21.0M $16.0M

General Fund Multi-Year Assumptions EXPENDITURES (May Revise)

7 Description 2019-20 2020-21 2021-22

Salaries and Benefits* Step and Column: Certificated/Classified 1.85% / 1.05% 1.85% / 1.05% 1.85% / 1.05% Salary Increase** 3.5%

• STRS

16.70% 18.10% 17.80% PERS 20.733% 23.60% 24.90% Health & Welfare Premiums 6.00% 6.00% 6.00% Miscellaneous Budget Shortfall***

• $58.3M

$24.5M Transfers Out $14.1M $12.1M $12.1M Contributions Special Education* $211.5M $224.0M $232.2M Restricted Routine Maintenance (RRM) $42.6M $42.3M $42.3M *Salary and Benefit expenditures include the restoration of the work year effective 7/1/2019. **1% effective 7/1/2019 1% effective 1/1/2020 for 12-month employees and 2/1/2020 for 10-month employees 1.5% effective 6/30/2020 11:59 pm ***Assumes solutions in 2020-21 are ongoing.

Increased Expenses

8

Multi-Year Budget Projections General Fund Unrestricted (May Rev)

9

DESCRIPTION 2018/19 PROJECTION 2019/20 PROJECTION 2020/21 PROJECTION 2021-22 PROJECTION

Beginning Balance $49,446,617 $67,535,830 $38,487,004 $31,762,028 Revenues 1,103,024,681 1,089,123,452 1,099,694,752 1,111,703,582 Expenditures

• 824,795,853
• 866,723,460
• 905,116,973
• 919,655,393

Projected Shortfall Solutions 2020/21

• $58,304,273

$58,304,273 Projected Shortfall Solutions 2021/22*

• $24,462,350

TOTAL EXPENDITURES

• 824,795,853
• 866,723,460
• 846,812,700
• 836,888,770

Other Sources/Uses

• 260,139,615
• 251,448,818
• 259,607,028
• 274,802,812

Ending Balance $67,535,830 $38,487,004 $31,762,028 $31,774,028 Required Reserves Reserve for Projected Shortfall 34,489,802 6,487,976

• School Site Ending Balances

2,000,000 1,000,000 1,000,000 1,000,000

• Misc. Required Reserves

(Economic Uncertainties, Prepaids, Stores, Revolving Cash) 31,046,028 30,999,028 30,762,028 30,774,028 Total Required Reserves $67,535,830 $38,487,004 $31,762,028 $31,774,028

Reserve (Shortfall) /Surplus $0 $0 $0 $0 *Assumes solutions in 2020-21 are ongoing.

Employer Pension Increased Costs

10

$ - Mil $3 Mil $10 Mil $14 Mil $13 Mil $14 Mil $7 Mil $13 Mil $2 Mil

GFU Impact $76 Million

Statement of Reasons for Excess Reserves

11

Education Code Section 42127(a)(2)(B) requires a statement of the reasons that substantiates the need for assigned and unassigned ending fund balances in excess of the minimum reserve standard for economic uncertainties for each fiscal year identified in the budget.

• Reason for Fund Balances in Excess of Minimum Reserve: $1.0M set aside for specific school

site accounts in 2020-21 and 2021-22. Combined Assigned and Unassigned/Unappropriated Fund Balances Form Fund 2019-20 Budget

01 General Fund/County School Service Fund $ 35,904,976 17 Special Reserve Fund for Other Than Capital Outlay Projects $ - Total Assigned and Unassigned Ending Fund Balances $ 35,904,976 District Standard Reserve Level 2% Less District Minimum Reserve for Economic Uncertainties $ 28,417,000 Remaining Balance to Substantiate Need (Reserve for Projected Shortfall and School Balances) $ 7,487,976

Tax Revenue Anticipation Notes

12

• Estimated at $220 million
• No cash deferrals factored into projections
• Subject to Education Protection Account (EPA) and

LCFF entitlement adjustments at P-2 certification anticipated in July 2019

• Credit rating on June 24, 2019
• Resolution to Board on June 25, 2019
• Close in late July

Budget Development Timeline

13

March 15 Preliminary Certificated Notices April Classified Notices May 15 Final Certificated Notices June

LCAP Workshop - June 12 Education Protection Account (EPA) Public Hearing - June 18 TRANs Resolution and Preliminary Official Statement - June 25

Budget Adoption and LCAP First Reading - June 18 Second Reading - June 25 July 1 2019-20 Adopted Budget due to SDCOE Late July TRANs Issuance

We Are Here

14

Questions?