budget and lcap study session budget study session
TRANSCRIPT
BUDGET AND LCAP STUDY SESSION
May 6, 2016
BUDGET STUDY SESSIONApril 25, 2017
Lora Duzyk
Assistant Superintendent, Business Services
Agenda
• SDCOE Local Control Accountability Plan
• Governor’s 2017-18 Proposed Budget to Now
• Budget Tenants
• 2016-17 Estimated Actuals
• 2017-18 Budget Assumptions
• 2017-18 Recommended (Publication) Budget
• County School Service Fund
• Budget Considerations/Risks• Sustainability – Solar
2
Local Control and Accountability Plan (LCAP) Intent/Purpose
• Provide a high-quality instructional program for ALLstudents to ensure they leave our schools college and career ready
• Address equity for student groups in order to eliminate the achievement gap
• Allow for flexibility in addressing specific needs of students and ensure accountability for student achievement
• Focus on continuous improvement of teaching and learning
3
SDCOE LCAP
4
Annual Update
5
Greatest Progress• Increase in the percentage of English learners making annual progress
toward English proficiency• Stakeholder engagement continues to show progress• SDCOE Student Services and Programs division continues to provide
valuable support to all 42 school districts with supporting the county-wide plan for expelled students and foster youth
Greatest Needs• Increase student attendance rates• Improve student proficiency in English language arts and math• Develop operational excellence to support student learning
Input Process
•Monthly board presentations
• LCAP community forums
• Site professional learning communities
• Thoughtexchange online survey
• Stakeholder meetings and informal conversations
• SELPA and special education directors
•District English Learner Advisory Committee
•District Parent Advisory Committee
6
Executive Summary
Goal 1 – Excellence in Teaching and Learning
• Support and learning for educators
• Increase rigorous course offerings for students
• Advance career and college readiness
Goal 2 – Stakeholder Engagement
• Expand parent education and involvement opportunities
• Foster relationships with community partners
• Increase communication efforts
7
Executive Summary cont.
Goal 3 – Operational Excellence
• Build student agency and ownership of learning
• Increase equity and access
• Adjust attendance systems
Goal 4 - Support All Students
• Increase positive relationships
• Enhance school counseling
• Promote a therapeutic learning environment
• Review countywide plan for students expelled or in foster care
8
Monitoring and Communicating
• Build common understanding of metrics and practice of monitoring progress toward goals
• Provide regular updates to board and stakeholders
• Maintain the LCAP as an active document that informs our work and guides decision-making
9
Governor’s 2017-18 Proposed Budget to Now
10
2017-18 General Fund Budget Summary
11
© 2017 School Services of California, Inc.
K-12 Proposal - Overview
• $73.5 billion for Prop 98 ($64 billion for K-12)
• $744 million increase for LCFF (funding 23.67% of remaining
implementation gap)
• $287 million one-time discretionary funding (mandate claims offset)
• $423 million for Prop 39 energy efficiency grants
• $200 million (one-time) for CTE incentive grants (per 2015 Budget Act)
• $93 million for charter school ADA growth
• $58 million to provide COLAs to categorical programs outside of the LCFF
• $30 million for tobacco/nicotine prevention programs (Prop 56)
• $10 million for reducing truancy and drop out rates and supporting victims of
crime (Prop 47)
• $2.4 million for county office COLA and ADA adjustments
• -$4.9 million for Special Education ADA decrease
12
© 2017 Capitol Advisors Group, LLC
National Policy Impacts
• S&P up 14% since the election hitting close to 22,000• Now stalled and slightly declining because of delay in ACA & Tax Reform.
• California 3rd strongest economy behind Texas and Colorado.
• California job growth out paced the feds in all regions except Los Angeles.
• Changes in ACA could significantly impact $100B Medi-Cal program
2/3 of funding comes from federal government.
• Tariff reform could negatively impact construction, manufacturing, transportation and agriculture industries
13
UCLA’s Forecast of “Trumponomics”
16,000
18,000
20,000
Dow Jones Average
November 8
October November December January
14
April
State Revenues State general funds revenues are up by $1.4B over the January proposed budget ($7.5B vs $6.1B).
• PIT is up 30%
• Corporate taxes are up 33%
• Sales tax is down (3.9%)
• Other taxes up also
• Increase is actually very close to March 2016 actual revenues
California personal income is up 4.5% for 2016 and projected to rise thru 2019.
38,200 jobs added thru February and projected to continue to grow but at a slower rate.
Unemployment dropped to 5% in February, lowest in ten years and is expected to continue to drop thru 2019.
15
Employment Growth
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
2016 2017 2018
2.6%
1.9%
1.6%
2.6%
1.8%
1.5%
2.5%
1.8%
0.6%
Employment Growth(Percent Change)
Legislative Analyst’s Office (LAO),
November 2016
UCLA, December 2016
2017-18 Governor’s State Budget
16
Nonfarm Employment Increases
12,500
13,000
13,500
14,000
14,500
15,000
15,500
16,000
16,500
17,000
17,500
(in
th
ou
san
ds)
Source: December 2016, University of California, Los Angeles (UCLA) Forecast
17
Department of Finance Forecasts
$516
$389
$151
$359
$516
$132
$353
$380
$440
$0
$100
$200
$300
$400
$500
$600
2016-17 2017-18 2018-19 2019-20 2020-21
Average Gap Closure Funding Per Pupil
2016-17 Budget Act 2017-18 Governor's Budget Proposal
18
Transitioning to Full Funding of LCFF Entitlements
84
148
215232
256
0
50
100
150
200
250
300
0% to 20% 20% to 40% 40% to 60% 60% to 80% 80% to 100%
Number of School Districts by Unduplicated Pupil Percentage
California
San Diego
19
7 613 9 7
Budget Tenets
Our guiding principles
20
Budget Tenets
• All decisions will be consistent with our beliefs and mission. We will initiate or retain only those programs or services that contribute to achieving our mission and objectives, and benefits outweigh costs.
• Repurpose staff where possible.
• Prioritize or enhance programs or services due to need.
• Plan for short-term and long-term investments.
21
SDCOE 2016-17Estimated Actuals
22
2016-17 Estimated Actuals Unrestricted General Fund Adjustments• Revenues – Increased $2.2M
o Local Control Funding Formula (LCFF) increased $492K due to additional redevelopment property taxes
o Mandated Cost revenue increased $9K
o Outdoor Education income decreased $575K
o Interest increased $400K
o Contracts/Fees and local income increased by $434K
o Income Driven accounts increased $1.4M
23
2016-17 Estimated Actuals Unrestricted General Fund Adjustments• Expenditures – Decreased $5.5M
o Salary savings of $5.1M
o Outdoor Education expenses decreased $600K
o Interprogram credits $214K
o Program Support (Indirect Costs) credits $1.05M
o Mandated Cost funds transferred to Fund 40 - $9K
o Income Driven accounts increased $1.4M
24
2016-17 Budgeted Ending Balances –Estimated Actuals
25
General Operating $ 68,496,388
Income-Drivens 28,502,656
Restricted Funds 11,871,438Special Education 11,643,958
Special Projects 227,480
Special Reserve Funds 27,069,871
Special Funds 77,364,119
Total All Funds $213,304,472
Assumptions for Development of 2017 -18
SDCOE Publication Budget
26
2017-18 Assumptions –Revenues• Local Control Funding Formula (LCFF)
o Hold harmless at 2012-13 level adjusted for ADA decline with 1.48% COLA
o Redevelopment property taxes reduced by $654K
o Momentum Learning ADA budgeted at 1,600
o ROP district transition to districts - ($5.5M)
• Education Protection Account (EPA) - $200 per budgeted ADA
27
Momentum Learning Five Year ADA Comparison
28
Total ADA 3,022.92 2,413.00 1,754.21 1,600.00 1,600.00
*2016-17 & 2017-18 Budgeted ADA
LCFF for County Offices29
Student Programs County Office Operations
Per County
Per District
County ADA
Per Student
Base Amount
Supplemental/Concentration
Demographic:
Low Income, English Learner
and/or Foster Youth
COE Funding Model
• LCFF implementation for COEs is different
• COEs were 100% implemented in 2014-15
• All COEs are at or above their LCFF targets
• COEs only get minimal LCFF increases (if any) beginning in
2015-16
• COE LCFF funding rates increase in 2016-17 by a COLA of
1.48%
• COEs also receive add-ons for the pupil transportation and the
Targeted Instructional Improvement Grant (TIIG) amounts
received in 2012-13 N/A for SDCOE
30
$27.3MStudent
Programs
LCFF Target
SDCOE LCFF 2017-18
Minimum
State Aid
ROP$5.5M
$80.2M
$105.1M
Base Grant(with
2012-13 HH)
2017-18
Publication Budget
(Est 1,600 ADA)
$55.0MPublication Budget
1,600 ADA
$24.9M
$27.7MOperations
31
$25.2M2012-13
HoldHarmless
32
LCFF RevenueState Aid
EPA
Property Taxes
The funding sources for LCFF are:
local property taxes, state aid, and
Education Protection Account (EPA)
* 2016-17 based on Estimated Actuals Projection
*
ROP - A Shared Funding Transition
20
13
-14
20
14
-15
20
15
-16
20
16
-17
20
17
-18
20
18
-19
20
19
-20
2020-2
1
SDCOE CTE Funding Contribution to Districts
District 9-12 CTE Grade Span Adjustment
COE Funding
33
2017-18 Assumptions –Revenues
• Lottery - $144 per prior year ADA
• Lottery/Prop 20 - $45 per prior year ADA
• Flat funding for most federal/categorical programs• Title I reduced to reflect projected federal cuts of
approximately 8.8%
• No Mandated Cost revenue budgeted
• Special Education funding includes 1.48% COLA except Infant funding remains flat
• Grants and contracts based on estimated entitlements and many include estimated carryover
34
2017-18 Assumptions –Revenues
• Interest budget at $750K
• Income-Drivens based on current projections
• Fee schedule increase - 0% for most programs with other selected increases
o Outdoor Education fees restructured – Projected revenue reduction of $123K
• Contribution to MITI eliminated with project being operationalized in the General Fund
• Routine restricted maintenance - 2% of 2017-18 UGF expenses, additional contribution of $563K
35
2017-18 Assumptions –Expenditures
• Salary adjusted for step advances
• Statutory benefits at actual rates for 2017-18 except Unemployment insurance and Workers’ Compensation
o Adjustment for actual rates will be incorporated in the First Interim
36
2017-18 Assumptions –Expenditures • STRS ER rate increase from 12.58% to 14.43% = 1.85% or
approximately $836K across all funds
• CalPERS ER rate increase from 18.124% to 18.778% = .654% or approximately $341K across all funds
• Health & Welfare increased 8% for half a year
• OPEB = Normal cost plus unfunded actuarial accrued liability (after application of the Actuarial Standard of Practice No. 6)
37
2017-18 Assumptions –Expenditures
• HR reorganization incorporated
• MITI project operationalized - $6.4M
• General fund contingency of $1.5M for salary adjustments and other contingencies
• New contingency account established for changes in law related to expanded leaves $250K
• Utilities increased by 13% - $151K
38
2017-18 Assumptions –Transfers• Deferred Maintenance
o $1.225M
• Redevelopment
o $250K
• SERP
o $19K
39
2017-18Publication Budget
40
SDCOE Budgets
County School Service Fund – General Fund
Unrestricted GFGeneral Operating *Income-Driven
Restricted GFSpecial Education OperatingSpecial Education Master Plan Special Projects
41
* Includes former Categorical Flexibility Funds and Momentum
Learning
SDCOE Budgets
Special Funds - RestrictedChild DevelopmentDebt ServiceDeferred MaintenanceForest ReserveOther Post Employment BenefitsPost Retirement BenefitsRedevelopmentSpecial Education Pass-ThruSpecial Reserve – Capital ProjectsState School FacilitiesJPA Trust Funds (including Facilities)
42
2017-18 Budgets By Fund
All Funds = $569,585,938
43
Child Development $4.680M
1%
General Fund (CSSF) $250.071M
44%
Deferred Maintenance $2.675M
1%
Forest Reserve $0.325M
0%Post Employment Benefits $0.019M
0%
Redevelopment $0.987M
0%
Special Education Pass Thru $218.451M
38%
Special Reserve Capital Projects $1.650M
0%
JPA Trust $90.728M
16%
44
SDCOE 2017-18 Budgets (millions)
45
* Includes Former Categorical Flexibility Funds and
Momentum Learning
General Fund – CSSF
General Operating* $ 102.2(3)
Income-Drivens 17.0
Special Education Operating 17.1
Special Education Master Plan 29.8
Special Projects 84.0
Total General Fund $ 250.1(2)
Special Funds 319.5
Total All Funds 569.6(1)
Where Do We Get Our Money?
All Funds = $569,585,938
46
2017-18 Budgets - All Funds
All Funds = $569,585,938
*Includes Former Categorical Flexibility Funds and
Momentum Learning
47
2017-18 Budgeted Positions – All Funds
Total Positions All Funds = 1,103.99
*Includes Former Categorical Flexibility and
Momentum Learning Positions
48
2017-18 FTEs – All Funds
49
*Includes General Operating, Income-Drivens, Former
Categorical Flex, and Momentum Learning (effective 2014-15)
2017-18 FTEs Unrestricted
50
*Includes Former Categorical Flexibility Positions effective 2013-14
and Momentum Learning positions effective 2014-15
Totals 356 373 366 378 399 368 559 639 621 614
County School Service Fund
Unrestricted & Restricted
51
2017-18 Publication Budget County School Service Fund
RevenuesLCFF SourcesFederal RevenuesOther State RevenuesOther Local RevenuesTransfers InOther SourcesContributionsBeginning Balance
Total Revenues
ExpensesCertificated SalariesClassified SalariesEmployee BenefitsBooks and SuppliesServices and OperatingCapital OutlayTransfer Out/Other Outgo
Total Expenses
8010-8099
8100-8299
8300-8599
8600-8799
8910-8929
8930-8979
8980-8998
1000-1999
2000-2999
3000-3999
4000-4999
5000-5999
6000-6999
7000-7999
Unrestricted
$103,848,036
1,734
379,556
26,705,101
-
-
(4,774,438)
(6,948,779)
$119,211,210
24,589,832
31,614,861
24,537,018
2,721,218
31,372,741
1,193,371
3,182,169
$119,211,210
Restricted
$2,494,641
24,161,582
57,589,051
40,669,749
269,307
-
4,774,438
901,114
$130,859,882
21,458,687
16,926,624
20,587,952
2,317,218
65,388,801
804,166
3,376,434
$130,859,882
Total Fund
$106,342,677
24,163,316
57,968,607
67,374,850
269,307
-
-
(6,047,665)
$250,071,092
46,048,519
48,541,485
45,124,970
5,038,436
96,761,542
1,997,537
6,558,603
$250,071,092
52
CSSF 2017-18 Revenue Sources
General Fund = $250,071,092
53
CSSF 2017-18 Expenditures
General Fund = $250,071,092
54
CSSF – General OperatingUnrestricted Revenues
Local Control Funding Formula*Contracts/FeesLotteryInterestFederalOther StateOther LocalContributions
Restricted ProgramsRoutine Restricted
Beginning Balances*Total
$ 103,848,036
9,229,267
263,520
750,000
1,734
89,255
138,940
(2,805,695)
(2,384,224)
(6,948,779)
$ 102,182,054
*Includes Former Revenue Limit, including Momentum Learning
and Categorical Flexibility funds
55
LCFF Reconciliation
56
Funding Type Funding Amount Other Slide/Page
Reference
LCFF Formula $ 105.073M Page 31
Special Education Taxes $ 2.495M Page 52
LCFF - All Sources $ 107.568M Page 46
LCFF Transfer - Deferred
Maintenance $ (1.225M)
LCFF - Net of Transfers $ 106.343M Pages 52 & 53
Special Education Taxes $ (2.495M)
LCFF - Unrestricted General
Fund $ 103.848M Pages 52 & 55
CSSF General OperatingUnrestricted Expenditures
Total Unrestricted Expenditures = $102,182,054*
*Includes Former Categorical Flexibility Funds
and Momentum Learning
57
Employee Costs =$75.846M
74%
2016-17 Estimated Actuals and 2017-18 Budget – Unrestricted General Fund
Unrestricted
General Fund
Second Interim
Budget
Board Action
3/8/17
Estimated
Actuals
5/10/17
Change from
Second
Interim to
Estimated
Actuals
2017-18
Budget
5/10/17
Revenue $120,569,961 $122,785,315 $ 2,215,354 $126,159,989
Expenditures $133,851,568 $128,331,612 $5,519,956 $119,211,210
Surplus/(Deficit) ($ 13,281,607) ($ 5,546,297) $ 7,735,310 $ 6,948,779
Surplus/(Deficit)
by Program
General
Operating
$ 8,882,244 $ 16,617,554 $ 7,735,310 $ 6,948,779
Income-Drivens ($ 22,163,851) ($22,163,851) 0 0
Momentum
Learning ADA1,600 1,600
0 1,600
58
59
2016-17 Estimated Actuals and 2017-18 –
Unrestricted General Fund Reserves
Reserve Type
Second Interim
Budget
Board Action
3/8/17
Estimated
Actuals
5/10/17
Change from
Second Interim to
Estimated Actuals
2017-18
Budget
5/10/17
Revolving Cash $ 27,400.00 $ 27,400.00 $ 0 $ 27,400.00
Prepaid Expenditures 1,500,000.00 1,500,000.00 0 1,500,000.00
Lottery 1,784,533.62 1,784,533.62 0 2,000,589.62
Income-Drivens 28,502,656.16 28,502,656.16 0 28,502,656.16
Enrollment Reserve 4,500,000.00 4,500,000.00 0 4,500,000.00
Equipment Reserve 1,680,000.00 1,680,000.00 0 1,680,000.00
MITI Reserve 3,000,000.00 3,000,000.00 0 3,000,000.00
OPEB Reserve 9,000,000.00 9,000,000.00 0 9,000,000.00
Pension Reserve 7,000,000.00 7,000,000.00 0 7,000,000.00
Sustainability Reserve 5,000,000.00 5,000,000.00 0 * 5,000,000.00
Vacation Accrual 1,137,067.00 1,137,067.00 0 1,137,067.00
Reserve for Economic Uncertainties 5,683,754.00 5,550,334.00 ( 133,420.00) 5,001,422.00
Total Reserves $ 68,815,410.78 $ 68,681,990.78 ($ 133,420.00) $ 68,349,134.78$
Unappropriated Amount $ 20,448,323.88 $ 28,317,053.88 $ 7,868,730.00 $ 35,598,688.88
Ending Fund Balance $ 89,263,734.66 $ 96,999,044.66 $ 7,735,310.00 $ 103,947,823.66
If solar is approved, this goes to zero
2016-17 Estimated Actuals and 2017-18 Budget – Restricted General Fund
Restricted
General Fund
Second Interim
Budget
Board Action
3/8/17
Estimated
Actuals
5/10/17
Change from
Second Interim to
Estimated
Actuals
2017-18
Budget
5/10/17
Revenue $142,693,978 $142,767,548 $ 73,570 $129,958,768
Expenditures $150,336,110 $149,185,048 $ 1,151,062 $130,859,882
Surplus/(Deficit) ($ 7,642,132) ($ 6,417,500) $ 1,224,632 ($ 901,114)
60
2017-18 Budgeted Ending Balances
61
General Operating $ 75,445,167
Income-Drivens 28,502,656
Restricted Funds 10,970,324Special Education 10,592,624
Special Projects 377,700
Special Reserve Funds 26,834,961
Special Funds 78,987,066
Total All Funds $220,740,174
Budget & LCAP Timeline
62
SDCOE Budget/ LCAP TimelineMar – Apr LCAP Advisory Councils• District Parent Advisory Council• English Language Advisory Council
April 25th Special Board Study Session• 2016-17 LCAP Annual Update• 2017-20 LCAP• 2017-18 Publication Budget
May 10th Public Hearings• 2017-20 LCAP• 2017-18 Recommended Budget (for Publication)
June 14th Board Adopts• 2017-20 LCAP• 2017-18 SDCOE Budget
63
Budget Considerations/ Risks
• Economy
• Federal Policy
• GASB 74/75 Pension Plan Reporting
• Early Education
• Special Education
• COE Funding
• OPEB/CERBT
• Utility Costs
64
SDCOE Sustainability
Vision
“The San Diego County Office of Education strives to conserve natural resources by minimizing consumption of energy, water, and materials while reducing waste, and increasing student and community awareness through instruction and by example so that future generations will inherit a healthy environment.”
65
SDCOE Sustainability
SDCOE 2020 Goals
75% waste diversion rate
60% of power from renewable energy
40% reduction in energy use
35% reduction in water use
20% reduction in stormwater runoff
SD Schools Sustainability Consortium
Zero Net
Energy
66
Sustainability Action Plan (SAP)
71 Initiatives
5-year investment ~ $8.0 million
Prop 39 ~ $920K (w/rebates), $136K save/yr
Solar ~ $5.38M, $317K save/yr
Annual net savings ~ $776,000
~10 year investment payback
67
SDCOE Sustainability
SDCOE Sustainability - Solar
68
SDCOE Sustainability - Solar
69
Dollar/kWh
SDCOE Sustainability - Solar
70
Recommendation
Approve $5 Million Budget Adjustment for Solar Installation Based on Borrego Solar Proposal. Purchase includes:
1.45 Megawatt Total Solar PV Systems
Cum. 25-year Net Savings - $9.6 million
Panel and Inverter Warranties; 25 and 10 years
Performance Guarantee – 95% - 20 years
Maintenance and Monitoring – Standard
71
SDCOE Sustainability
72
Questions?
73