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

SAN DIEGO UNIFIED SCHOOL DISTRICT Board of Education 2019-20 Budget Adoption Second Reading June 25, 2019

Presentation Agenda ● Funding Priorities ● Budget Adoption Guidance ● Multi-Year Assumptions and Projections ● Tax Revenue Anticipation Notes (TRANs) ● Budget Development Timeline 2

Funding Priorities LCAP Vision 2020 ● ● Visual and Performing Arts Professional Development ● ● Libraries K-3 Literacy ● ● Safety Elementary Enrichment ● ● Mental Health Language Immersion Programs ● ● Safe, Collaborative and Wellness ● ● Inclusive Environments High Quality Preschools ● 3

Financial Considerations ● 2020-21 Budget Shortfall ● CalPERS/STRS Rates ● Enrollment 4

Budget Adoption Guidance ● 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 5

General Fund Multi-Year Assumptions REVENUES 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 6

General Fund Multi-Year Assumptions EXPENDITURES (May Revise) 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. 7

Increased Expenses 8

Multi-Year Budget Projections General Fund Unrestricted (May Rev) 2018/19 2019/20 2020/21 2021-22 DESCRIPTION PROJECTION PROJECTION PROJECTION 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 $58,304,273 Projected Shortfall Solutions 2020/21 - $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 9 *Assumes solutions in 2020-21 are ongoing.

Employer Pension Increased Costs GFU Impact $76 Million $ - Mil $3 Mil $10 Mil $14 Mil $13 Mil $14 Mil $7 Mil $13 Mil $2 Mil 10

Statement of Reasons for Excess Reserves 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. 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 $ 7,487,976 Projected Shortfall and School Balances) Reason for Fund Balances in Excess of Minimum Reserve: $1.0M set aside for specific school ● site accounts in 2020-21 and 2021-22. 11

Tax Revenue Anticipation Notes ● 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 12

Budget Development Timeline March 15 Preliminary Certificated Notices April Classified Notices We Are Here May 15 Final Certificated Notices Late July TRANs Issuance June LCAP Workshop - June 12 July 1 Education Protection Account (EPA) Public Hearing - June 18 Budget Adoption and LCAP 2019-20 Adopted Budget TRANs Resolution and Preliminary Official Statement - June 25 First Reading - June 18 13 due to SDCOE Second Reading - June 25

Questions? 14