+ MBUSD 2019-20 BUDGET ADOPTION Dr. Murakawa-Leopard June 19, 2019 - - PowerPoint PPT Presentation

+

MBUSD 2019-20 BUDGET ADOPTION

• Dr. Murakawa-Leopard

June 19, 2019

Manhatt attan an Beach Unified d School

• l Distri

trict 325 S. Peck k Avenu nue Manhatt attan an Beach, , CA 902 0266 Phone: ne: (310) 0) 318-7345, , x5900 00

Budget Adoption – 6.19.19

+ NATIONAL OUTLOOK

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20 40 60 80 100 120 140

WWII and Post-War Expansions (in months)

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+ NATIONAL OUTLOOK

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3 Month to 10 Month US Treasury Yield Curve

+ STATE OUTLOOK

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Budget Adoption – 6.19.19

The “Big Three” Taxes

$0 $40 $80 $120 $160 2019-20 2020-21 2021-22 2022-23 (in billions) Personal Income Sales and Use Corporation

+ STATE OUTLOOK

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Budget Adoption – 6.19.19

0% 2% 3% 5% 6% 2018 2019 2020

Personal Income Tax (percent change)

January Budget May Revision

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SCHOOL FUNDING – CALIFORNIA

Budget Adoption – 6.19.19

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SCHOOL FUNDING - MBUSD

State 27% Local Property Taxes 50% Other Local Revenue 18% Federal Revenue 3% State Lottery 2%

Budget Adoption – 6.19.19

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SCHOOL FUNDING - LCFF

Budget Adoption – 6.19.19

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SCHOOL FUNDING - LCFF

County District Type Basic Aid UPP Los Angeles Manhattan Beach Unified N 5.32% Contra Costa Lafayette Elementary Elementary N 4.92% Los Angeles Hermosa Beach City Elementary N 4.89% Contra Costa Moraga Elementary Elementary N 4.51% Santa Clara Los Gatos-Saratoga Joint High School Y 3.96% Alameda Piedmont City Unified Unified N 2.59% Contra Costa Orinda Union Elementary N 2.45% San Mateo Hillsborough City Elementary Y 2.14% Marin Ross Elementary Elementary Y 1.04% UPP – Unduplicated Pupil Percentage

The unduplicated count of pupils who (1) are English learners, (2) meet income or categorical eligibility requirements for free or reduced-price meals under the National School Lunch Program, or (3) are foster youth divided by the total enrollment in the

• district. “Unduplicated count” means that each pupil is counted only once even if the

pupil meets more than one of these criteria

Budget Adoption – 6.19.19

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SCHOOL FUNDING - LCFF

District Type Basic Aid UPP Lennox Elementary N 96.28% Hawthorne Elementary N 89.40% Centinela Valley High School N 85.63% Inglewood Unified N 84.92% Lawndale Elementary N 84.80% Wiseburn Unified N 46.01% Torrance Unified Unified N 38.18% Culver City Unified N 37.23% Santa Monica-Malibu Unified N 28.60% South Pasadena Unified N 19.74% Redondo Beach Unified N 19.10% El Segundo Unified N 16.00% Beverly Hills Unified Y 15.60% San Marino Unified N 15.26% Palos Verdes Peninsula Unified N 11.95% La Canada Unified N 8.00% Manhattan Beach Unified N 5.32% Hermosa Beach City Elementary N 4.89%

Budget Adoption – 6.19.19

+ SCHOOL FUNDING - LCFF

Unduplicated Counts

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Budget Adoption – 6.19.19

Year UPP 2013-14 4.00% 2014-15 3.50% 2015-16 4.10% 2016-17 4.89% 2017-18 5.32% 2018-19 (est.) 6.64%

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SCHOOL FUNDING - LCFF

Grade Span 2019-20 Base Grant Augmentation Grant Total Base Grant TK-3 $7,702 $801 $8,503 4-6 $7,818 $0 $7,818 7-8 $8,050 $0 $8,050 9-12 $9,329 $243 $9,572 Grade Span Supplemental Grant

20% of Base Grant for Every High Needs Student

Concentration Grant

50% of Base Grant for Every High Needs Student over 55% of District Enrollment

TK-3 $1,701 $4,252 4-6 $1,564 $3,909 7-8 $1,610 $4,025 9-12 $1,914 $4,786

Budget Adoption – 6.19.19

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SCHOOL FUNDING - LCFF

Inglewood Torrance Redondo Beach Manhattan Beach ADA 12,086 23,496 9,937 6,647 UPP 84.92% 38.18% 19.10% 5.32% Base $102,558,775 $199,381,182 $84,322,898 $56,404,780 Supplemental $17,418,582 $15,224,744 $3,221,135 $600,147 Concentration $17,906,762 $ - $ - $ - Per Pupil

$11,409 $9,134 $8,810 $8,576

UPP Additional Funding to MBUSD Similar to Redondo Beach 19.10% $2,154,663 Similar to Torrance 38.18% $4,307,069 Similar to Inglewood 84.96% $19,428,063

(Using 2017-18 ADA and UPP Data from Ed-Data and an average base grant amount of $8,486)

Budget Adoption – 6.19.19

+ MBUSD’S BUDGET – Enrollment

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TK/

• Kinder. Elem. Middle

School High School Total 2013-14 495 2,920 1,470 2,504 6,894 2014-15 419 2,818 1,528 2,544 6,890 2015-16 395 2,760 1,555 2,459 6,774 2016-17 442 2,754 1,473 2,547 6,776 2017-18 394 2,636 1,438 2,573 6,647 2018-19 448 2,562 1,435 2,553 6,550 2019-20 (proj) 426 2,497 1,425 2,560 6,482 2020-21 (proj) 417 2,437 1,386 2,566 6,542 2021-22 (proj) 418 2,356 1,359 2,564 6,279

Budget Adoption – 6.19.19

+ MBUSD’S BUDGET

Local Funding

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 $225 per parcel  12,879 taxable parcels  13.9% exemption rate  11,089 parcels taxed  Up to $2.49 million in

local revenue from 2018-19 through 2023- 24; $2.4 million received to date

Budget Adoption – 6.19.19

+ MBUSD’S BUDGET

Local Funding

16 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

Grants to the District

(in millions)

Budget Adoption – 6.19.19

+ MBUSD REVENUES

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LCFF Revenue $56,554,190 69% Federal Revenue $2,090,521 3% Other State Revenue $8,556,321 10% Local Revenue $14,816,645 18%

Budget Adoption – 6.19.19

+ MBUSD EXPENDITURES

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Certificated Salary $36,220,474 42% Classified Salary $15,108,414 18% Benefits $21,643,604 25% Supplies $1,654,482 2% Services $10,686,172 12% Capital Outlay $82,442 0% Other Outgo/ Indirect $393,848 1%

Budget Adoption – 6.19.19

+ MBUSD EXPENDITURES

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CalPERS CalSTRS 2014-15

11.771% 8.880%

2015-16

11.847% 10.730%

2016-17

13.888% 12.580%

2017-18

15.532% 14.430%

2018-19

18.062% 16.280%

2019-20

20.733%* 16.700%* (statutory rate 18.13%)

2020-21

23.600%* 18.100%* (statutory rate 19.10%)

2021-22

24.900%* 17.800%* (statutory 18.40%; CalSTRS may change rates to exhaust unfunded liability by 2045-46)

2022-23

25.700%* 17.800%* (statutory 18.40%; rates may change)

2023-24

26.400%* 17.800%* (statutory 18.40%; rates may change)

2024-25

26.600%* 17.800%* (statutory 18.40%; rates may change)

2025-26

26.500%* 17.800%* (statutory 18.40%; rates may change)

Budget Adoption – 6.19.19

* Rates will change as a result of the enacted budget; CalSTRS rates are expected to increase to 17.1% in 19-20, to 18.4% in 20-21, and to 18.1% in 2021-22 and thereafter; CalPERS rates will decrease, but the amount of decrease is unknown.

20

COST PRESSURES – SPECIAL EDUCATION

IDEA

• Assumes it costs twice as much to educate a child with special needs.
• Federal government would pay up to 40 percent of this "excess" cost at full funding.
• Since 1981, the federal share has remained less than half of the federal commitment

Budget Adoption – 6.19.19

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COST PRESSURES – SPECIAL EDUCATION

MBUSD Special Education Enrollment 1061 Students 2015-16 US Average Per-Pupil Expense x $11,762 $12,479,482 x 40% = Maximum MBUSD Grant under IDEA $4,991,793 Actual IDEA Federal Funding for MBUSD Special Education $1,601,360

Budget Adoption – 6.19.19

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COST PRESSURES – SPECIAL EDUCATION

MBUSD Special Education Enrollment 1061 Students ~16% MBUSD IDEA Funded Rate Per Identified Student $1,312 MBUSD AB602 Funded Rate Per Identified Student $2,289 MBUSD Mental Health Funded Rate Per Identified Student $1,530 Total MBUSD State/Federal Funding Per Identified Student $5,131 MBUSD Average Cost Per Identified Student $20,964

Budget Adoption – 6.19.19

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COST PRESSURES – SPECIAL EDUCATION

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

(proj)

2019-20

(proj)

Federal

$1,290,742 $1,486,118 $1,358,954 $1,405,524 $1,595,182 $1,884,937 $1,884,937

State

$3,911,646 $3,452,088 $3,844,379 $3,341,484 $3,089,038 $4,117,493 $4,117,493

Local

$376,996 $381,825 $257,195 $66,139 $276,481 $188,440 $188,440

Gen Fund

$8,362,122 $10,053,612 $11,274,600 $13,343,376 $14,151,226 $16,082,157 $17,418,731

Total

$13,941,506 $15,373,642 $16,735,129 $18,156,523 $19,111,928 $22,273,027 $23,836,817

% Increase (Total)

5.05% 10.27% 8.86% 8.49% 5.26% 16.54% 7.02%

% Increase (Gen Fund)

11.26% 20.23% 12.14% 18.35% 6.05% 13.64% 8.31%

% Funded by Gen Fund

59.98% 65.40% 67.37% 73.49% 74.04% 75.23% 73.07%

(5 year annual total average increase of 7.59%; 5 year general fund average increase of 11.05%)

Budget Adoption – 6.19.19

+ REVENUE / EXPENSE CHANGES

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Budget Adoption – 6.19.19

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MULTI-YEAR PROJECTION ADOPTED BUDGET

eliminates escrow ($2.4M); equivalent of 62 (42.5+19.5) positions eliminated 2018-19 2019-20 2020-21 2021-22 Beg Balance

$11,149,419 $7,491,030 $3,719,171 $2,824,410

Revenues

$84,210,883 $82,017,677 $82,841,579 $83,660,135

Expenses

$87,869,272 $85,789,536 $83,736,340 $83,537,302

Net Inc/(Dec)

($3,658,389) ($3,771,859) ($874,761) $122,833

Ending Bal

$7,491,030 $3,597,822 $2,581,712 $2,583,195

Undesignated Ending Bal.

$774,453 $676,290 $282,319 $411,123

Budget Adoption – 6.19.19

+ MULTI-YEAR PROJECTION – ENDING FUND BALANCE

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Budget Adoption – 6.19.19

$- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 2018-19 2019-20 2020-21 2021-22 3-Year Escrow REU (5%) REU (3%) Undesignated Amount

+ MULTI-YEAR PROJECTION – ADOPTED-UNAUDITED “SWING”

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Adopted Budget Unaudited Actuals Total Change 2011-12 ($2,176,236) ($1,078,135) $1,098,101 2012-13 ($5,682,446.00) ($2,956,204.00) $2,726,242 2013-14 ($2,977,006.00) $1,127,733.00 $4,104,739 2014-15 ($3,211,807.00) ($1,402,405.95) $1,809,401 2015-16 ($683,646.00) $79,099.47 $762,745 2016-17 ($3,339,507) ($75,426) $3,264,081 2017-18 ($3,303,012) ($2,300,560) $1,002,452 2018-19 ($145,480) ($3,658,389)* ($3,512,909)*

*estimated actuals

Budget Adoption – 6.19.19

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MULTI-YEAR PROJECTION 2.43% SWING; 1% SALARY

eliminates escrow in 20-21 ($2.4M); drops REU to 3% in 21-22; equivalent of 23 (17+16) positions eliminated 2018-19 2019-20 2020-21 2021-22 Beg Balance

$11,149,419 $9,365,768 $7,678,595 $4,963,595

Revenues

$84,210,883 $81,896,328 $82,720,230 $83,538,786

Expenses

$85,994,533 $83,704,850 $85,556,279 $86,007,411

Net Inc/(Dec)

($1,783,650) ($1,687,173) ($2,714,700) ($2,347,276)

Ending Bal

$9,365,768 $7,678,595 $4,963,595 $2,616,619

Undesignated Ending Bal.

$2,742,929 $903,787 $656,081 $6,396

Budget Adoption – 6.19.19

+

Measure MB and MBEF will provide significant financial relief to the District. As a result of these local funds, the District was able to avoid the elimination of more than 32 positions in 2018-19 and 2019-20. However, given current conditions, the District is beginning to implement expenditure reductions. These will include:

 2019-20 – reductions in the areas of professional development,

instructional materials, technology, and supplies and services in 2019- 20.

 2020-21 – reductions amounting to $4.8M (5.4% of total expenditures)  2021-22 – another $2.25M (another 2.5% of total expenditures)

BALANCING THE BUDGET

Budget Adoption – 6.19.19

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Even after these reductions, budgetary pressures will remain:

 Structural deficit  Diminishing reserves  Diminishing increases to state

funding

 Declining enrollment  Increasing costs (salary, pensions,

health and welfare, special education)

 Maintenance needs (human capital)

BALANCING THE BUDGET

Budget Adoption – 6.19.19

+

MBUSD 2019-20 BUDGET ADOPTION

• Dr. Murakawa-Leopard

June 19, 2019

Manhatt attan an Beach Unified d School

• l Distri

trict 325 S. Peck k Avenu nue Manhatt attan an Beach, , CA 902 0266 Phone: ne: (310) 0) 318-7345, , x5900 00

Budget Adoption – 6.19.19