FREMONT UNIFIED S C H O O L D I S T R I C T PRELIMINARY BUDGET REPORT 2020-21 Division of Business Services June 3, 2020 1
Overview • Education Code Section 42127 (a) states that: On or before July 1 of each year, the Governing Board of each school district shall accomplish the following: – Hold a public hearing on the budget to be adopted for the subsequent fiscal year – Adopt the budget – File the budget with the County Superintendent of Schools 2
2019-20 General Fund Budget (in millions) Adopted First Interim Second Interim Estimated Budget Budget Budget Actual (d) (a) (b) (c ) Revenues $390.0 $386.3 $391.4 $388.6 Less: Expenditures 389.9 417.3 416.0 415.8 = Surplus/(Deficit) ($25.8) ($3.6) ($25.9) ($27.4) Add: Beginning Fund Balance 20.7 36.6 36.6 36.6 =Ending Fund Balance $17.1 $10.5 $9.1 $10.8 Less: Designations 0.7 4.0 2.0 0.8 =Reserve ($) $10.0 $13.1 $8.6 $8.4 =Reserve (%) 3.35% 2.05% 2.01% 2.41% 3
2019-20 General Fund Budget (in millions) Unrestricted and Restricted Unrestricted General Restricted General Fund Fund Total General Fund (a) (b) (c=a + b) Revenues $331.1 $58.9 $390.0 Add: Contributions (64.9) 64.9 0 Less: Expenditures 278.7 137.0 415.8 = Surplus/(Deficit) ($12.5) ($13.2) ($25.8) Add: Beginning Fund Balance 23.0 13.5 36.6 =Ending Fund Balance $10.5 $0.3 $10.8 Less: Designations 0.5 0.3 0.7 =Reserve ($) $10.0 $0 $10.0 =Reserve (%) 2.41% 0.00% 2.41% 4
Governor’s Proposed Key Budget Changes at May Revision Item January Budget May Revision 2020-21 LCFF Funding Change +$1.2 billion [-$6.5 billion] Proposition 98 Minimum Guarantee 2019-20 $81.6 billion $77.4 billion 2020-21 $84.0 billion $70.5 billion 2020-21 2.29% 2.31% Suspended (-7.92%) 2020-21 2.48% 2.48% Suspended (-7.92%) 2022-23 3.26% 3.26% Suspended (-7.92%) Statutory COLA One-time Discretionary $0 $0 5
May Revision - Key Changes Item January Budget May Revision Employer Contribution – CalSTRS 2020-21 18.4% 16.15% 2021-22 18.2% 16.02% CalPERS 2020-21 22.68% 20.7% 2021-22 24.6% 22.84% Special Education (Base Rate) $557.27 per ADA $645.00 per ADA Special Education – Early Intervention Preschool $2.2 Million $0 (One-time) CARES Act: Learning Loss Mitigation $0 $4.4 billion (FUSD - $2.0 million at $1,900 per ADA for students with disabilities) Elem. and Schools Secondary School Emergency $0 $1.65 billion (FUSD $1.8 million) Relief (ESSER) Funds 6
FUSD – May Revision Key Impacts (in millions) (Net Change to Multi-Year Revenue) Item Revenue (increase) Revenue (decrease) COLA - Ongoing $31.9 CalPERS $2.3 (fiscal year 2020-21 & 2021-22 only) CalSTRS $8.5 (fiscal year 2020-21 & 2021-22 only) Special Education - Ongoing $3.0 Elementary and Secondary School Emergency $1.8 Relief Fund (ESSER) (One-time) Learning Loss Mitigation (One-time) $2.0 7
Revenue Assumptions for 2020-21 (as of May Revision) • Local Control Funding Formula (LCFF) Sources • State Revenues – Enrollment 34,989 based on projections from – Lottery fund is projected at $207 per student Davis Demographics. – – Average Daily Attendance (ADA) is 33,901 or COLA for Special Education Program is 0% 96.89% – AB 602 expected to be replaced with a new legislative model – Statutory Cost of Living Adjustment (COLA) 2.31% – – Deficit Factor 10.00% Mandated Cost Block Grant is $1.4 million – Effective Deficit Factor -7.92% • Local Revenues – Unduplicated count of students eligible for – Local donations are included based on Supplemental Grant is 27.14% historical trend and commitments from donors • Federal Revenues – Ongoing federal revenues remain flat for now. – Parcel Tax (Measure I) is projected at $4.3 – One-time revenues expected, but not million 8 included.
Expenditure Assumptions for 2020-21 • STRS / PERS Contribution • Classroom staffing is based on the following – Contribution to STRS is 16.15%, 0.95% class sizes/ratio less than current year – Contribution to PERS is 20.70%, 0.979% – Grades TK- K 24:1 more current year – Grade 1-3 28:1 • Special Education expenditure is $94 million – Grade 4-6 30:1 – Special Education budget deficit is $56.7 – Grade 7-12 27.5:1 million – Funded from 80% to 100% of projected cost • 0.56% salary increases designated • Supplemental grant is estimated at $14.6 million • Includes Step / Column increases ( represents a decline of 1.5 million from FY 19-20) • Support staff for Bringhurst Elementary School • Cost of 1% for all employees is $3.3 million ( Dependent on Board Direction on the Opening of Bringhurst) (inclusive of statutory benefits) 9
Preliminary Budget for 2020-21 (in millions) Estimated Actual Preliminary Budget 2019-20 2020-21 Revenues $390.0 $360.9 415.8 394.0 Less: Expenditures = Surplus/(Deficit) ($25.8) ($33.1) Add: Beginning Fund Balance 36.6 10.8 = Ending Fund Balance $10.8 ($22.3) Less: Designations 0.7 2.4 = Reserve ($) $10.0 ($24.7) = Reserve (%) 2.41% -6.27% 10
Preliminary Budget for 2020-21 (in millions) Unrestricted and Restricted Unrestricted General Fund Restricted General Fund Total General Fund (a) (b) (c = a + b) Revenues $303.6 $57.3 $360.9 Less: Expenditures 266.1 127.9 394.0 Contribution* (70.5) 70.5 0.0 = Surplus/(Deficit) ($32.9) ($0.2) ($33.1) Add: Beginning Fund Balance 10.5 0.3 10.8 = Ending Fund Balance ($22.4) $0.1 ($22.3) Less: Designations 2.3 0.1 2.4 = Reserve ($) ($24.7) $0 ($24.7) = Reserve (%) -6.27% 0.00% -6.27% 11 *Contribution to Special Education Program is $56.7 million and Routine Restricted Maintenance is $13.5 million
Multi-Year Budget Projection (Revenue Assumptions For 2021-22 and 2022-23) • LCFF Sources • State Revenues – Enrollment is projected at 34,889 for 2021-22 – 0.00% COLA projected for the next two and 34,611 for 2022-23 – No projection for one-time discretionary funds – ADA is projected at 33,804 for 2021-22 and 33,552 and 2022-23 – • Unduplicated count of eligible students is Local Revenues projected at 26.91% for 2021-22 and 27.02% for 2022-23 – Local donations are included based on historical trend and commitments from donors – COLA is projected at 2.48% for 2021-22 and 3.26% for 2022-23 – Parcel Tax (Measure I) is projected at $4.3 • Deficit factor is 10.00% in the next two years • Effective deficit factor is -7.92% in the next two million years. • Federal revenues remain flat for now 12
Multi-Year Budget Projection (Key Expenditure Assumptions For 2021-22 and 2022-23) • • Class sizes and ratio remain the same Transfer of funds to MVROP of $4.4 as in 2020-21 million each year • • Pension Contribution rate Special Education Expenses Budgeted at 100% - Est. $6.5 Mil. Increase per year – STRS contribution rate decreased by 0.13% in 2021-22 and increased by 2.08% in 2022-23 • Supplemental grant $14.4 million and – PERS contribution rate increase $14.4 million by 2.14% in 2021-22 and 2.66% in 2022-23 • Dependent on Board Direction on the Opening of Bringhurst- Support staff for Bringhurst Elementary School 13
Multi-Year Budget Projection (without Reductions) (in millions) Estimated Preliminary Projected Projected Actual Budget Budget Budget 2019-20 2020-21 2021-22 2022-23 Revenues $390.0 $360.9 $359.7 $358.9 Less: Expenditures 415.8 394.0 402.1 410.0 Revenue Enhancements or 0 (0) (0) (0) Expenditure Reductions Surplus/(Deficit) ($25.8) ($33.1) ($42.4) ($51.1) Beginning Fund Balance 36.6 10.8 (22.3) (64.7) Ending Fund Balance $10.8 ($22.3) ($64.7) ($115.8) Less: Designations 0.7 2.4 2.3 2.3 Reserve ($) $10.0 ($24.7) ($67.0) ($118.1) 14 Reserve (%) 2.41% -6.27% -16.66% -28.81%
Multi-Year Budget Projection (with Reductions) (in millions) Estimated Preliminary Projected Projected Actual Budget Budget Budget 2019-20 2020-21 2021-22 2022-23 Revenues $390.0 $360.9 $359.7 $358.9 Less: Expenditures 415.8 394.0 402.1 410.0 Revenue Enhancements or 0 (35.5) (42.4) (51.1) Expenditure Reductions Surplus/(Deficit) ($25.8) $2.3 $0 $0 Beginning Fund Balance 36.6 10.8 13.1 13.1 Ending Fund Balance $10.8 $13.1 $13.1 $13.1 Less: Designations 0.7 2.3 2.3 2.3 Reserve ($) $10.0 $10.8 $10.8 $10.8 Reserve (%) 2.41% 3.0% 3.0% 3.0% 15
Other Funds (in millions) Beginning Ending Revenues Expenditures Balance Balance Special Education Pass-Through (Fund 10) $0 $13.8 $13.8 $0 Adult Education (Fund 11) [1] $1.7 $4.8 $4.8 $1.7 Child Development (Fund 12) $0 $1.7 $1.7 $0 $7.2 [2] Cafeteria (Fund 13) $0.1 $7.2 $0.1 Building Fund-Measure E (Fund 21) $95.6 $130.2 $225.8 $0 Capital Facilities Fund- $27.1 $3.5 $9.1 $21.7 Developer Fee (Fund 25) Special Reserve for Capital Outlay- $8.6 $0.4 $7.3 $1.7 Sale of Site (Fund 40) Bond Interest & Redemption (Fund 51) $34.3 $41.9 $46.8 $29.4 [1] Adult Education program is projecting a $452,000 revenue shortfall and plan to use the fund balance to cover it. [2] Includes $1.0 million contribution from the General Fund 16
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