Board of Education

2016-17 Budget Adoption

SAN DIEGO UNIFIED SCHOOL

DISTRICT

June 28, 2016

Presentation Agenda

2

Opening Remarks

Local Control Funding Formula (LCFF)

Multi-Year Assumptions

2016-17 Budget Proposal and Solutions

Tax Revenue Anticipation Notes (TRANs)

Superintendent’s Recommended Budget

Local Control Funding Formula (LCFF)

33

LCFF MYP Target and Gap

Implementation

4

Fiscal Year ADA

LCFF Target at Full

Implementation LCFF Floor

Gap Funding

Allocated

Annual LCFF

Allocation Remaining Gap Gap Funding %

2013-14 106,088 $ 1,028,678,354 $ 736,936,863 $ 35,013,926 $ 771,950,789 $ 256,727,565 12.00%

2014-15 104,641 $ 1,028,607,955 $ 763,804,735 $ 79,865,079 $ 843,669,814 $ 184,938,141 30.16%

2015-16 102,304 $ 1,017,043,464 $ 828,731,508 $ 98,298,841 $ 927,030,349 $ 90,013,115 52.20%

2016-17 101,514 $ 1,009,673,099 $ 921,221,019 $ 48,507,121 $ 969,728,140 $ 39,944,959 54.84%

2017-18 99,991 $ 1,006,470,393 $ 957,804,662 $ 35,993,175 $ 993,797,837 $ 12,672,556 73.96%

2018-19 98,492 $ 1,014,718,187 $ 981,512,831 $ 13,687,248 $ 995,200,079 $ 19,518,108 41.22%

2019-20 97,014 $ 1,025,339,470 $ 982,894,285 $ 31,901,801 $ 1,014,796,086 $ 10,543,384 75.16%

2020-21 95,559 $ 1,011,069,451 $ 1,002,196,561 $ - $ 1,002,196,561 $ 8,872,890 0.00%

2021-22 95,559 $ 1,011,069,451 $ 1,002,196,561 $ 8,872,890 $ 1,011,069,451 - -

Multi-Year Assumptions

55

San Diego County Office of

Education

6

San Diego County Office of Education (SDCOE) guidance letter dated May 31,

2016, recommends planning factors for 2016-17 and multiyear projections

Subject to change pending State Legislature and Governor’s approval

Budget must be submitted to SDCOE by July 1, 2016 (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

District’s Local Control Accountability Plan, Adopted Budget, Certification are

reviewed and approved together

Multi-Year Assumptions – Revenues

7

REVENUE ASSUMPTIONS

Description 2016-17 2017-18 2018-19

LCFF Funding Model

Funded ADA 101,514 99,991 98,492

COLA* 0.00% 1.11% 2.42%

Funding Gap* 54.84% 73.96% 41.22%

Federal: Impact Aid $9.0M $9.0M $9.0M

Other State

Mandated Cost Reimbursement $ 3.7M $ 3.7M $ 3.6M

Lottery (GFU $140; GFR $41) $181/ADA $181/ADA $181/ADA

Local: Interest 0.56% 0.56% 0.56%

Transfers In $11.0M $11.0M $11.0M

*Per Department of Finance

Multi-Year Assumptions – Expenditures

8

EXPENSE ASSUMPTIONS

Description 2016-17 2017-18 2018-19

Salaries

Step and Column: Cert / Class 1.76% / .92% 1.76% / .92% 1.76% / .92%

STRS 12.58% 14.43% 16.28%

PERS 13.89% 15.50% 17.10%

Health & Welfare Premiums 7.00% 7.00% 7.00%

Materials & Supplies (Consumer Price Index-

CPI) 2.15% 2.26% 2.49%

Contracted Services (CPI) 2.15% 2.26% 2.49%

Utilities $29.0M $33.9M $34.5M

Implemented Board Solutions/Budget Deficit $24.6M* $85.0M $135.3M

Transfers Out $10.2M $10.2M $10.2M

Contributions

Special Education $202.4M $209.0M $216.1M

Restricted Routine Maintenance (RRM) $27.6M $27.6M $38.7M**

*$48M prior year reserves is an additional solution. The $24.6M listed solution is ongoing.

** Assumes passage of school facility bond proposition, which would increase requirement to 3%.

2016-17 Budget Proposal and Solutions

99

Multi-Year Budget Projections

General Fund Unrestricted

10 Note: 2018/19 Budget assumes passage of the school facility bond proposition, which would increase

RRM requirement to 3%.

2015/16 2016/17 2017/18 2018/19

DESCRIPTION PROJECTION PROJECTION PROJECTION PROJECTION

-1- -2- -3- -4- -5-

Beginning Balance $144,094,133 $81,380,189 $35,776,481 $34,850,481

Revenues 986,211,103 1,041,461,030 1,038,376,841 1,039,522,080

Expenditures (826,857,784) (857,962,030) (888,618,252) (921,064,905)

Projected Shortfall Solutions 2016/17 - * 85,013,824

Projected Shortfall Solutions 2017/18 - 135,314,714

TOTAL EXPENDITURES (826,857,784) (857,962,030) (803,604,428) (785,750,191)

Other Sources / Uses (222,067,263) (229,102,708) (235,698,413) (253,975,889)

Ending Balance 81,380,189$ 35,776,481$ $34,850,481 34,646,481$

SURPLUS/(SHORTFALL) (62,713,944) (45,603,708) (926,000) (204,000)

Required Reserves

Economic Uncertainties $26,167,000 $26,941,000 $26,015,000 $25,811,000

Reserve for FY16/17 Projected Shortfall 48,131,161 - - -

School Site Ending Balances 4,500,000 6,253,453 6,253,453 6,253,453

Stores 1,674,228 1,674,228 1,674,228 1,674,228

Prepaid Expenses 850,000 850,000 850,000 850,000

Revolving Cash 57,800 57,800 57,800 57,800

Total Required Reserves $81,380,189 $35,776,481 $34,850,481 $34,646,481

Reserve (Shortfall) / Surplus $0 $0 $0 $0

Financial Risk

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Every Student Succeeds Act (ESSA)

Minimum Wage Increase

Prop I (San Diego)

Fair Wage Act of 2016 (California)

Prop 30 Tax Extension

LCFF Implementation (Prop 98 Guarantee)

Routine Restricted Maintenance

Passage of the School Facility Bond Proposition

CalPERS rates

Statement of Reasons

for Excess Reserves

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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: Additional $6.3M set aside for

specific school site accounts

Combined Assigned and Unassigned/Unappropriated Fund Balances

Form Fund 2016-17 Budget

01 General Fund/County School Service Fund $ 33,194,453

17 Special Reserve Fund for Other Than Capital Outlay Projects $ -

Total Assigned and Unassigned Ending Fund Balances $ 33,194,453

District Standard Reserve Level 2%

Less District Minimum Reserve for Economic Uncertainties $ 26,941,000

Remaining Balance to Substantiate Need $ 6,253,453

2016-17 General Fund Unrestricted

Budget Solutions

13

Description Amount

(in millions)

Position Review $3.0

Funding Alignment 5.0

Contribution Adjustment (ECE) 6.6

Contribution Adjustment (Special Ed) 10.0

Total $24.6

Tax Revenue Anticipation Notes (TRANs)

1414

Tax Revenue and Anticipation Notes

15

Estimated at $195 million

No cash deferrals factored into projections

Subject to Education Protection Account and LCFF entitlement

adjustments with P-2 certification

Credit rating presentation was held on June 22, 2016

Resolution to Board on June 28, 2016

Close in late-July

Total General Fund Cash Flow

16

$-

$25.0

$50.0

$75.0

$100.0

$125.0

$150.0

$175.0

JUL AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUN

Projected $38.98 $21.52 $25.76 $26.42 $30.15 $116.65 $157.73 $99.76 $82.18 $89.91 $80.74 $69.18

Millions

TTRANS

$ 195 Million

Superintendent’s Recommended Budget and

Actions Timeline

1717

Superintendent’s Recommended

Budget

18

Cultural Proficiency – National Equity Project Partnership

Bi-literacy and International Baccalaureate Programs

High School Transformation

Early Learning Support

Open Library Hours at Every Elementary School

Common Core Continued Support

Youth in Transition

GATE Testing

Counseling

Enhanced Allocation for Counselors at Secondary Schools

Concentrated Services for A-G Support

Family and Community Engagement

Athletics

Elementary Counseling Pilot

International Baccalaureate (IB)

Learning Centers

Visual and Performing Arts Program

Asset Efficiency and Sustainability

Restorative Practices

Lower Class Sizes

Beginning Teacher Induction Program

Additional Certificated Staff at High-Needs Elementary and Middle Schools

Visual and Performing Arts Program

Maintained classroom GATE and Seminar Funding

Maintained i21 program

Focus on Online Learning

Innovation Center

Focus on Student Support Intervention Plans

LCFF Intervention Support Site Budgets

Dual Language

Professional Development

Translation Services

Youth Advocacy Office to Support Closing of Achievement Gap

Cluster Centered Parent Engagement and Community Engagement

Continued Investments

New Investments Improved Services

2016-17 Budget Actions Timeline

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Date Actions

June 14, 2016 - Local Control and Accountability Plan (LCAP) - First Reading

- Proposed Budget - First Reading

- Educational Protection Account (EPA) Public Hearing

June 28, 2016 - Board Adoption of 2016-17 Budget and LCAP

- TRANs Resolution And Preliminary Official Statement

July 1, 2016 - 2016-17 Adopted Budget and LCAP due to SDCOE

July 26, 2016 - Report on Amended Budget – Information Only*

Late-July - TRANs Issuance

* Information only to present the adjustments to the General Fund Unrestricted Budget as a result of the state-approved budget.

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Questions?