FY 2019-20 and FY 2020-21Budget Overview & Process

Budget and Business Services CommitteeMay 6, 2020

Agenda

● FY 2019-20 and FY 2020-21 Fiscal Outlook and Balancing Plan

● LCAP Executive Order Update

● Budget Calendar

2

SAN FRANCISCO UNIFIED SCHOOL DISTRICT

Item A:FY 2019-20 and FY 2020-21

Fiscal Outlook and Balancing Plan

3

BUDGET 101:SFUSD funding is comprised of various sources and used different ways.

Unrestricted District Funding (57%) Restricted District Funding (43%)

Certificated Salaries42%

Employee Benefits23%

Classified Salaries

17%

Services & Other

Expenses15%

Books & Supplies4%

Budget 101:Flow of Unrestricted General Fund (UGF)

State funding is primarily distributed to LEAs through the LCFF based upon ADA.○ LEA = Local Education Agency○ LCFF = Local Control Funding Formula ○ ADA = Average Daily Attendance

SFUSD allocates funding ($$) to school sites through WSF based upon their projected enrollment in the spring. Adjustments are made in the Fall based upon final enrollment.

○ WSF = Weighted Student Formula = Allocation of funding based upon student enrollment and characteristics to strive for equity, flexibility, and transparency

SFUSD also funds staffing (FTEs) to school sites through MTSS and other Centrally Controlled allocations, based on school & student input factors, specific programming, and other factors.

○ MTSS = Multi-Tiered System of of Supports ○ Central Allocations = Special Education (“SpEd”), Multilingual Pathways, Visual and Performing

Arts, etc.

5

BUDGET 101:Use of Unrestricted General Fund (UGF)

6

School-Based Supports: $539M (86%)

● Direct allocations to school sites

● MTSS, Centrally Controlled Allocations, and

other instructional supports for schools

● Special Education

● Transitional Kindergarten

Administrative & Operational Services: $99M (16%)

● Human Resources, Business Services, Labor

Relations, Educational Placement Center, etc.

Financing/Transfers: $7M (1%)

Budget Outlook (UGF)2nd Interim Projected Shortfall ($22.6M FY 2019-20)

7

8

The deficit improved by $9.2M due to an improved revenue outlook:

❖ LCFF Increase based on State P-1 Certification of ADA (tentative)

❖ Sales Tax was tied to the City’s projections (reasonable)

❖ SpEd projection was based on actuals to-date (strong)

However, the expenditure outlook worsened:

❖ Leaves/Substitute costs trending significantly higher

❖ New operating costs coming to light

Budget Outlook (UGF)2nd Interim Projected Shortfall ($22.6M FY 2019-20)

Budget Outlook (UGF)COVID-19 Budget Impacts ($40.0M FY 2019-20)

9

10

❖ The City and County of San Francisco (CCSF) forecasts major reductions to local revenues

❖ Worst case scenario (shown) significantly adds to SFUSD’s budget deficit

❖ The overall economic impact depends on the depth and duration of the recession

❖ The PEEF funding is a restricted source; however, this calculation assumes programs will be shifted to UGF for prioritization.

Budget Outlook (UGF)COVID-19 Budget Impacts ($40.0M FY 2019-20)

11

❖ The overall economic impact depends on the depth and duration of the recession

❖ Worst case (shown) adds significantly to the budget deficit

❖ Key milestones to update our outlook will occur by mid-May

➢ Governor’s May Revise

➢ City’s updated revenue outlook

Budget Outlook (UGF)COVID-19 Multi-Year Budget Impacts

Budget Outlook (UGF)COVID-19 Multi-Year Balancing Plan

12

❖ FY 2019-20 Balancing - Assumes federal, state and gifts will be able to offset UGF expenditures

❖ FY 2020-21 Balancing includes Targeted Reductions and Districtwide Solutions

❖ $36.3M remaining shortfall mandates major new solutions, such as federal stimulus funding

❖ City support is deeply hampered by $1.7B two-year budget shortfall

● Original Targets = $26M UGF Savings

○ $16M Central Services + $10M School Sites

● Board Direction = $26M UGF Savings

○ $22M Central Services Reductions

■ $16.0M Division Target Reduction ■ $3.0M Non-Personal Reductions, Central/School Sites ■ $3.0M Reductions to PEEF-Other General Uses (move MTSS from UGF)

○ $4M School Site WSF Reductions/ Offset by $4M New PEEF-SLAM funding, using one-time fund balance distributed through WSF

FY 2020-21 Balancing PlanTarget Reductions ($26.0M Overall)

13

Division Savings Description Impacts

Communications & Development

$110,000 ● Eliminate Internal Communications Manager by attrition

Reduced volume of employee communications

County $65,000 ● Focus on increasing attendance No service impacts

Curriculum & Instruction

$3,921,000 ● Reduce Professional Development (PD) budget by $2 million

● Reduce two filled Program Admin (MPD & Office of Prof Learning)

● Consolidate 5 filled TSA (induction coach) positions back into the classroom

Significantly reduced PD for teachers (and paras) and reduced induction support for new teachers

Dept. of Technology $1,922,000 ● Reduce 5 vacant positions● Reduce 3 filled positions including network

manager, business analyst and clerk● Shift 2 project manager positions to bond

program● Reduce non-personnel by about $100k

Loss of institutional knowledge and technical expertise. Limit ability to recruit and staff for open positions. Delay project implementation/scale back project support

FY 2020-21 Balancing PlanDivision UGF Reductions ($16.0M Central)

14

15

Division Savings Description Impacts

Early Education $161,000 ● Consolidation of one or more TK classrooms based on low enrollment

Possible reduction in TK sites

Facilities $2,692,000 ● Move UGF positions onto school safety tax and/or restricted funds for ongoing maintenance and repair

Maintain current level of support; no net improvements in staffing or coverage

Finance / Bus. Services $683,000 ● Reduce 5-6 vacant positions in Budget, Accounting, and Purchasing

● Non-personnel cuts to office supports, such as printers and equipment

Delays in processing of budget approvals, invoices, purchase orders and bid contracts; risk of missing reporting deadlines.

Human Resources $427,000 ● Reduce non-personnel, including out-of-town travel budget for recruitment events

● Shift part of one position to special education and HCBM

Challenges meeting operational demand of employees and site leaders; reduced recruitment capacity, including visits to HBCUs* *Historically Black Colleges and Universities

Instruction and Innovation

$150,000 ● Eliminate vacant Executive Director Position Reduced capacity for strategic planning and innovative initiatives

FY 2020-21 Balancing PlanDivision UGF Reductions ($16.0M Central)

Division Savings Description Impacts

LEAD $468,000 ● Release 1 Supervisor responsible for Instructional Rounds and reorganize work

● Eliminate duplicate positions for Secondary School Redesign

Reduced support for professional learning for school leaders

Legal $283,000 ● Reduce outside counsel expenditures Fewer resources for unique and unforeseen litigation

Policy & Ops $2,260,000 ● Reduce transportation costs by streamlining routes

Greater efficiency in routing

RPA $337,000 ● Reduce 1 vacant management position● Reduce $90k substitute costs to administer

ELPAC, F&P

Less support for data requests, program evaluation, surveys, formative assessments

16FY 2020-21 Balancing PlanDivision UGF Reductions ($16.0M Central)

Division Savings Description Impacts

SFCSD $2,302,000 ● 22% reduction in central office positions (24 filled and 6 vacancies

● Eliminate funds for substitutes for school site staff to attend trainings (including restorative practices, safety care, cultural humility/implicit bias, etc.)

● Eliminate extended hours for school climate team leads to attend climate team PLC

● Eliminate extended hours and extended days for strategic planning time and staff PD in the summer

Reduced coaching, support and PD for social workers, counselors, health teachers, RP coaches, and other staff

Delayed response time and fewer support services to schools and departments for behavior consultations, attendance strategies, family engagement and other topics

Superintendent $236,000 ● Reduce 2-3 vacant positions in AAALI Less capacity for community engagement, program implementation

Total* $16,017,000

17FY 2020-21 Balancing PlanDivision UGF Reductions ($16.0M Central)

*Note: Board of Education budget will be discussed with Board leadership.

18FY 2020-21 Balancing PlanPEEF-OGU Reductions ($3.0M Central)

❖ Reductions to current programs funded on PEEF-Other General Use allows the District to shift expenditures from the Unrestricted General Fund

❖ Staff evaluated a variety of approaches➢ Across the board reductions based on total budget➢ Eliminate programs that do not offer direct services to students

❖ Reduction Approach➢ Across the Board reductions based upon non-personnel spending➢ No elimination of programs➢ No layoffs➢ Requires more programs to identify reduction strategies

Expense Area Savings (Estimated)

Description Impacts

Meals / refreshments $200,000 ● Scale back district-paid catering & food service at PD and other meetings

Staff will be required to break for meals, taking away from meeting time

Travel / conferences $500,000 ● Freeze travel and conferences except for extenuating needs

Reduced recruiting, learning and networking opportunities

Extended calendar $500,000 ● Scale back or restructure PD Reduced PD opportunities for staff

Materials and supplies $1,000,000 ● Feasible based on prior year trends of actual expenses; centralize purchasing

Potential reduced supplies at school sites; prioritize efficiencies over direct cuts.

Contracts $1,000,000 ● Review specific contracts to determine feasibility and impact

Negotiate better pricing/find efficienciesMay reduce service levels

Total $3,000,000

19FY 2020-21 Balancing PlanNon-Personnel Savings ($3.0M Central/Sites)

FY 2020-21 Balancing PlanOngoing Efforts to Identify Solutions & Prioritize

20

Again,

❖ After accounting for Target Reductions, the $36.3M remaining shortfall mandates major new solutions

❖ Immediate and ongoing work:

➢ Current year cost controls

➢ State and federal advocacy

➢ Community Outreach to help prioritize investments

❖ We have a plan for balancing FY 2019-20, but we need to account for significant uncertainty by reducing expenditures.

❖ Examples of spending controls include limiting:

➢ Hiring and use of extended calendar

➢ New K-Resos and Contracts

➢ Budget transfers, including from salary savings

❖ District staff should prioritize spending for urgent, essential, and legally required purposes.

FY 2020-21 Balancing PlanCurrent Year Budget Freeze

21

❖ Two K-12 programs in the CARES Act

➢ $355 million funding to CA for grants■ Governor Newsom has broad authority to award grants to LEAs

and higher education

➢ $1.64 billion for LEAs in proportion to their 2019 Title I allocation■ SFUSD expects to receive nearly $11 million but must allocate a

portion of these funds to private schools

➢ Timing for distribution is not clear. Typically, California actions related to new federal funds are taken in the budget.

➢ Funding likely not available until the budget year

FY 2020-21 Balancing PlanFederal Advocacy

22

❖ Process and timelines have changed

❖ LAO projections for Prop 98 growing increasingly dire – this impacts FCMAT budget planning/projection advice

❖ Strong advocacy for K-14 programs and funding is more essential than ever

❖ Budget messaging and timeline discussion

❖ District/grassroots advocacy discussion

FY 2020-21 Balancing PlanState Advocacy

23

● LCAP Task Force

● PTA/PTO information sessions

● Virtual town halls

● Labor partners

FY 2020-21 Balancing PlanCommunity Engagement

24

SAN FRANCISCO UNIFIED SCHOOL DISTRICT

Item B:LCAP Executive Order Update

25

26

The Local Control Funding Formula (LCFF)

California established the LCFF funding system in 2013. LCFF provides school districts with base funding based on

Average Daily Attendance (ADA), as well as additional funds based on the number of low-income students, English learners, and

foster youth they serve.

��

Our Mission, Vision 2025, Strategic Plan

Local Control & Accountability Plan

(LCAP)

SFUSD Budget

Local Control Funding Formula (LCFF)

● Base● Supplemental● Concentration

WSF MTSS

BSCsBSCs

BSCsSPSAs

The LCAP is a tool for local educational agencies to set goals, plan actions, and leverage resources to meet those goals to improve

student outcomes.

28

LCAP Stakeholder Engagement Amid COVID-19

● Normally, the LCAP Task Force would have been facilitating community engagement and stakeholder conversations at this point in the year.

● COVID-19 has impacted the ability to engage with stakeholders and carry out thoughtful planning.

Executive Order N-56-20

● In June, COVID-19 Operations Written Report will replace LCAP for LCAP & budget adoption process

● LCAP 2020-21 to be finalized and Board approved in mid-December

● Formal separation of LCAP adoption and Budget adoption

● Delay implementation of three-year LCAP to 2021-22 through 2023-24

29

SAN FRANCISCO UNIFIED SCHOOL DISTRICT

Item C:Budget Calendar

30

31

Budget Process

Budget ProcessKey Dates

● May 6, 2020 (BBS) Budget Development Update & Discussion

● City and County of San Francisco Revenue Update

● Governor’s May Revise (TBD) will set the course ahead

● May 28, 2020 (BOE) PEEF Expenditure Plan, 2nd Reading

● June 3, 2020 (BBS) Budget Development Update & Discussion

● June 9, 2020 (BOE) Recommended Budget (1st Reading)

● June 16, 2020 (COW) Recommended Budget

● June 23, 2020 (BOE) Recommended Budget (2nd Reading) and LCAP COVID-19 Report

32(BOE) Board of Education meeting

(BBS) Budget and Business Services Committee meeting

(COW) Committee of the Whole

33

Thank You

34

❖ PEEF had been seen as a solution to addressing UGF budget shortfalls

❖ With major losses to the City’s General Fund, PEEF revenues are also in decline

❖ Current deficit assumes the shift of $6.1M FY 2019-20 and $13.9M

Budget Outlook (UGF)COVID-19 Multi-Year Budget Impacts - PEEF