SAN DIEGO UNIFIED SCHOOL DISTRICT 2019-20 First Interim Financial Report Board of Education December 10, 2019
Budget Development Timeline We Are Here 2
Projections Guidance ● Guidance on the multi-year calculations and projections is provided by the California Department of Education (CDE) and provided directly by the San Diego County Office of Education (SDCOE). ● The CDE and SDCOE are the legal overseers of district budgets, which make following their guidance a recommended approach. 3
LAO Guidance ● On November 20, 2019 the Legislative Analyst’s Office (LAO) announced a fiscal picture, particularly, for K-12 education, that is optimistic for the coming year. ● As much as $7 billion surplus available to state in 2020-21 ● Estimates as much as $2.1 billion more in ongoing funding beyond COLA to school districts 4
General Fund Multi-Year Assumptions Revenues Description 2019-20 2020-21 2021-22 LCFF/State Funding Model Declining Enrollment 102,243 100,709 99,199 COLA 3.26% 3.00% 2.80% Federal: Impact Aid $10.0M $10.0M $10.0M Other State Mandated Block Grant $ 3.99M $ 4.08M $ 4.15M Lottery (GFU $153; GFR $54) $207/ADA $207/ADA $207/ADA Transfers In $21.3M $21.1M $16.1M 5
General Fund Multi-Year Assumptions Expenditures 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* 3.7% 0% 0% STRS 17.10% 18.40% 18.10% PERS 19.72% 22.70% 24.60% Health & Welfare Premiums** 6.00% 6.00% 6.00% Materials & Supplies (Consumer Price Index-CPI)** 3.33% 3.14% 3.02% Utilities $24.9M $24.9M $24.9M Board Solutions/Budget Shortfall*** $70.1M $41.4M Contributions Special Education $233.6M $249.0M $257.6M Restricted Routine Maintenance (RRM) $43.9M $41.8M $41.2M *Includes: Restoration of the work year effective 7/1/2019 and 3.7% effective 1/1/2020. **Year over year increase . ***Assumes solutions in 2020-21 are ongoing. 6
Increased Expenses Year-Over-Year Increase ~ $44M 7
Employer Pension Increased Costs GFU Impact $77 Million $ - Mil $3 Mil $10 Mil $14 Mil $13 Mil $14 Mil $8 Mil $13 Mil $2 Mil 8
Solutions ● Increase revenues ● Reduce expenses ○ Program Shifts ○ Identify and implement greater efficiencies within programs and services ○ Spending freeze ○ Reinstitute/continue hiring freeze ● Other reductions as necessary Note: Solutions may require bargaining 9
Potential Shifts ● Governor’s Budget released in January, May, June ● Impacts of collective bargaining ● Strategic layoffs of certificated/classified as needed in March ● Additional unexpected costs or revenues ● Minimum wage analysis ● CalPERS Rate ● Special Education Costs 10
Recommended Board Action ● Approve the First Interim Financial Report and Resolution Reflecting the District’s Financial Status from July 1 through October 31, 2019. ● Certify that the District’s Projected Financial Outlook for the current and subsequent two years is Positive ◦ Positive Certification: The District WILL MEET their financial obligations for the current and two (2) subsequent fiscal years. ● To balance the budget, the Board of Education will direct the Executive team to lead a process to identify and implement greater efficiencies within programs and services along with other needed adjustments. 11
Questions and Comments 12
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