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Santa Paula Unified School District

First Interim Report for 2013-14

Executive Summary

Board of Trustees

Christina Urias

Diana Ponce-Gomez

Michelle Kolbeck

Kelsey Stewart

Chris Wilson

Administration

Mr. Alfonso Gamino, Superintendent

Donna Rose, Assistant Superintendent of Business

Robin Freeman, Assistant Superintendent of Educational Services

December 12, 2013

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Introduction

The First Interim Report is the first mandated review of the District’s budget since its adoption

in June 2013. Required by AB 1200, it reports the District’s financial position through the first

reporting period, which ends October 31 of each fiscal year. After reviewing the Interim

Report, AB 1200 requires that the Board of Trustees certify the District’s financial position to

the State in one of three ways:

A Positive Certification, stating that the District will be able to meet its financial obligations for the current fiscal year and two subsequent fiscal years, or

A Qualified Certification, stating that the District may not meet its financial obligations for current fiscal year and two subsequent fiscal years, or

A Negative Certification, stating that the District will be unable to meet its financial obligations for the remainder of the current fiscal year or for the subsequent fiscal years based upon current projections (not meeting reserves in the current year or negative fund balance in any year).

The county office of Education (COE) reviews all interim reports. If the district has certified the

interim report as positive, the COE can change the certification to qualified or negative if it

determines that it is not the appropriate certification. If the district has certified the interim

report as qualified or negative, the COE must provide a report to the State Controller’s Office

(SCO) and the state Superintendent of Public Instruction within 30 days from the time the

district submits the interim report to the COE.

For this First Interim reporting period Staff is requesting the Board approve a Positive

Certification.

Ending Fund Balance

The District is projected to have a positive ending fund balance for the 2013-14 fiscal year.

Ending Fund Balance

Adopted 1st Interim Difference

Budget

Beginning Balance 9,129,509 11,599,739 2,470,230

Revenues 44,477,052 48,991,377 4,514,325

Expenditures 42,869,848 46,966,524 4,096,676

Ending Fund Balance 10,736,713 13,624,592 2,887,879

Ending fund reservations have been listed in the financial report to reflect that negotiations are

still continuing for the 2013-14 year, and salary tables reflecting unification have not yet been

completed, ($1,200,00). A reservation has also been made to reflect the LCFF GAP funding for

2013-14 ($2,277,786) will be received in July 2014, and will be incorporated into the 2014-15.

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Budget Calendar for 2013-14: Key dates for the Fiscal Year 2013-14 reporting are:

June 2013 Board Adopts the FY 2013-14 Budget

July Business Office Staff work on closing the Prior Fiscal Year

August Close Prior Year and produce the Unaudited Actuals report

September By the 15th: Board review and approval of the Unaudited Actuals for Prior

Year

October 31st Cutoff date for the First Interim Reporting Period for Current Year

November Audit Firm audits prior year

December 15th Audit of prior year completed and submitted to COE by Audit firm.

First Interim Report completed and approved by the Board

January Governor releases State Budget Proposal for the next fiscal year

Second Interim Cut-off is January 31st

February Budget planning for next Fiscal year underway

March By the 15th Board review and approval of the Second Interim

Report for FY 2013-14

Local Control Accountability Plan (LCAP) Guidelines public

Budget Planning for 2014-15 continues, Board Updates

April Period 2 reporting of ADA (this report will determine state funding

for Local Control Accounting Formula for 2013-14)

LCAP development

Budget Planning for 2014-15 continues, Board Updates

May Governor will release the May revise report for the Proposed

Budget for 2014-15

Budget Planning for 2014-15 continues, Board Updates

LCAP: 1st Public Hearing

June 2nd Public Hearing on LCAP

Public Hearing and Board Adoption of 2014-15 budget

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Financial Report Information

The District’s Budget and Accounting format are based on the California School Accounting

Manual (CSAM) and utilize the Standardized Account Code Structure (SACS). The Escape

financial system (contracted and maintained by VCOE) is the system the District uses for the

budget and accounting functions. The District’s financial records are organized and operated on

a fund basis, based on Governmental Accounting Standards. A fund is defined as a self-

balancing set of accounts recording cash and other financial resources, together with all related

liabilities and residual equities or balances and changes therein, which are segregated for the

purpose of carrying on specific activities or attaining certain objectives in accordance with

special regulations, restrictions or limitation.

In fiscal year 2013-14 there are eight funds in the District accounting system. The District’s

funds include:

General Fund (Fund 010)

Cafeteria Fund (Fund 130)

Deferred Maintenance Fund (Fund 140)

Building Fund (Fund 210)

Capital Facilities Fund (Fund 250)

County School Facilities Fund (Fund 350)

Special Reserve Fund for Capital Outlay (Fund 401)

Bond Interest and Redemption Fund (Fund 510)

GENERAL FUND (Fund 010): This is the chief operating fund for the District. It is used to

account for the ordinary operations of the District. All transactions except for those required or

permitted by law to be in another fund are accounted for in this fund. In the General Fund,

there are Restricted and Unrestricted financial activities.

General Fund Unrestricted: Used to account for those projects and activities that are

funded without restrictions on the use of the funds

General Fund Restricted: Used to account for projects and activities that are funded by

external revenue sources that are legally restricted or restricted by the donor for specific

purposes only.

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General Fund Revenues: Total Revenues are $48,991,377. This is an overall increase from

the Adopted Budget Revenue estimate of $4,514,325, due to the impact of the new funding

formula (LCFF), increase in enrollment in 2013-14, common core funding, and carryover funds

from restricted programs unspent in the prior year.

General fund revenues are categorized as Revenue Limit (Starting 2013-14 will be the LCFF

Funding model), Federal Revenue, Other State programs, and Local Revenue.

Adopted Budget First Interim Difference

LCFF/ Revenue Limit 29,361,606$ 38,114,066$ 8,752,460$

Federal Revenue 3,144,051$ 3,784,283$ 640,232$

Other State Revenue 9,108,521$ 4,107,284$ (5,001,237)$

Other Local Revenue 2,862,874$ 2,985,744$ 122,870$

Total Revenues 44,477,052$ 48,991,377$ 4,514,325$

78%

8%

8%6%

First Interim 2013-14 Revenues by Source

LCFF/ Revenue Limit Federal Revenue Other State Revenue Other Local Revenue

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Local Control Funding Formula:

The First Interim report reflects the calculation including the first year Gap funding towards the

Local Control Funding Formula (LCFF). The local Control funding formula for 2013-14 results in

additional funds that the District will receive over the “Base” year of 2012-13. The official

funding will not be known until after the Period 2 Attendance Reporting is completed and

certified by the State in May 2014. The funding “gap” will be fully funded in July 2014 for the

2013/14 year. Budget planning for 2014-15 will be based on the gap funding estimated for the

2013-14 fiscal year.

Local Control Funding Formula TARGET Calculation:

The LCFF will be implemented over a period of many years (current target is eight years). In

2013/14 the District is expected to be funded at 11.78% of the difference between the Base

year funding (2012/13 is the base year) and the fully funded target that will be achieved when

the formula is fully implemented. The funding model uses grade span base funding, add in

supplemental and concentration grants for students that fall in the categories of Low Income,

English language learners, Foster and Homeless. The funding target (funding in 2020/21 if fully

implemented) has been estimated using current ADA statistics and an unduplicated count of

eligible students (for the supplemental and concentration grants) of 84.99%:

CALCULATE LCFF TARGET

COLA 1.570%

Unduplicated as % of Enrollment 84.99% 84.99% 2013/14

ADA Base Gr Span Supp Concen TARGET

Grades K-3 1,761.23 6,952 723 1,305 1,151 17,843,007

Grades 4-6 1,173.17 7,056 1,199 1,058 10,925,743

Grades 7-8 727.47 7,266 1,235 1,090 6,977,130

Grades 9-12 1,614.73 8,419 219 1,468 1,295 18,409,537

Subtract NSS - - - -

NSS Allowance - -

TOTAL BASE 5,276.60 39,402,140 1,626,994 6,973,880 6,152,402 54,155,416

Targeted Instructional Improvement 1,009,055

Transportation 57,944

LOCAL CONTROL FORMULA FUNDING (LCFF) TARGET 55,222,415

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The transition funding for 2013/14 is estimated by calculating the difference between the base

year (2012/13) and the target, then using the 2013/14 funding rate of 11.78% of the “gap”:

The transitional funding, or “Gap” funding for 2013-14 is estimated at $2,277,786, which is

$407 per ADA change over the prior year funding:

Other Revenue Changes:

Federal Revenue:

Federal Revenues have increased from the Adopted Budget by $640,232 due to carryover for

Title I, Title II, and Title III.

State Revenue:

Other State Revenue has been reduced overall by $5,001,237. Most state categorical

(restricted programs) have now been rolled into the Local Control Funding Formula. Increases

have been recorded in Lottery funding due to increased enrollment, carryover in Partnership

Academies, and the Common Core Funding.

Other Local Revenues:

Other Local Revenues have increased by $122,870. $106,347 was received by the District from

the SELPA as unspent funds. This funding will be used to support a new Special Day Class at

Santa Paula High School. The remaining increase is in the Donations account.

CALCULATE LCFF TRANSITION FUNDING

2013/14LOCAL CONTROL FUNDING FORMULA TARGET 55,222,415

TRANSITION BASE FUNDING 35,886,369

Difference or GAP 19,336,046

Multiply difference by funding rate 11.78% 2,277,786

ECONOMIC RECOVERY PAYMENT -

LCFF Entitlement before held harmless provision 38,164,156

NSS Held harmless -

LCFF Entitlement (before COE transfer, Choice & Charter Supplemental) 38,164,156

LCFF Entitlement per ADA2012-13 2013-14 2014-15 2015-16

ADA 5,169.00 5,276.60 5,276.10 5,184.98

Estimated LCFF Sources per ADA 6,826.15$ 7,232.72$ 7,797.64$ 8,390.90$

Net Change per ADA 406.58$ 564.91$ 593.26$

Net Percent Change 5.96% 7.81% 7.61%

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General Fund Expenditure Changes:

EXPENDITURES Adopted Budget 1st Interim Difference

Certificated Salaries 19,813,564 20,288,383 -474,819 Classified Salaries 6,223,199 6,458,053 -234,854 Employee Benefits 9,022,282 9,629,122 -606,840 Books and Supplies 2,000,480 3,919,007 -1,918,527 Services, Other Operating 4,990,546 5,575,987 -585,441 Capital Outlay 10,000 93,610 -83,610 Other Outgo 941,687 941,687 0 Direct Support/Indirect Costs -131,910 -131,910 0

Interfund Transfer (Fund 140) 0 192,585 -192,585

Total Expenditures 42,869,848 46,966,524 -4,096,676

Certificated Salaries:

Increased to fund additional Elementary PE Teacher, Middle School Teacher, High School Special Education Teacher, High School Counselor, Special Education Preschool Teacher approved since budget adoption

Increases due to budgeting of carryover dollars for categorical programs for enrichment programs and staff development

Classified Salaries:

Increased to fund additional positions including two High School Locker Room Attendants and two Technology support positions

Increases due to limited term assignments

Increases due to budgeting of categorical carryover dollars for instructional assistants and clerical extra duty

Benefits:

Increased due to budgeting of additional Certificated and Classified positions

Increased due to budgeting of 100% Health and Welfare benefit costs thru December

Books and Supplies:

Increase due to the budgeting of carryover dollars

Increase due to budgeting for Common Core expenditures

Services, Other Operating:

Increase due to the budgeting of carryover dollars

Increase due to budgeting for Common Core expenditures

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Capital Outlay:

Increase for Network Infrastructure needs due to Common Core

Increased due to site purchase of Success Maker Software program

Interfund Transfer

Budgeted a transfer into the Deferred Maintenance Fund for 2013-14

Multi-Year Projection

Multi-year projections are a required component of interim reports to demonstrate that the

District will meet its financial obligations in the current and subsequent two years. The multi-

year projection is also an indication of the District’s ability to maintain required reserves. The

District is projected to meet its financial obligations and will have sufficient reserves.

Multi-year Assumptions:

The projections use assumptions published by School Services of California, and recommended

by the Ventura County Office of Education for the development of revenue and expenditure

projections. This year, the LCFF/Revenue limit projections use a calculator developed by the

Business Assistant Superintendents of California (BASC) and is being updated by the Fiscal Crisis

Management and Assistance Team (FCMAT).

Factors:

Cola and Gap Funding Rate

Enrollment

P2 ADA by Grade Span:

2013/14 2014/15 2015/16

COLA 1.57% 1.87% 1.99%

GAP Funding rate 11.78% 16.49% 18.69%

ENROLLMENT AND UNDUPLICATED COUNT

Enrollment

Unduplicated

Count

Unduplicated

%

2013-14 5,477 4,655 85.0% 1 yr average

2014-15 5,394 4,585 85.0% 2 yr average

2015-16 5,400 4,590 85.0% 3 yr average

ADA ADA to use: 2012-13 2013-14 2014-15 2015-16

Grades K-3 1,822.97 1,730.44 1,720.32 1,668.48

Grades 4-6 1,130.54 1,152.66 1,137.60 1,164.48

Grades 7-8 645.36 714.75 650.88 659.52

Grades 9-12 1,569.50 1,572.25 1,563.70 1,586.50

Ungraded HH, SDC P-2 / Annual 92.00 92.00 92.00

P-2

(Annual for SDC

ext. year)

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Local Control Funding Formula Multi-Year Projection:

2012-13 2013-14 2014-15 2015-16

GAP funding - current year -$ 2,277,786$ 2,979,936$ 2,966,156$

py LCFF gap funding * cy ADA -$ -$ 2,277,570$ 5,166,712$

2012-13 Categoricals as adjusted 6,364,289$ 6,364,289$ 6,364,289$ 6,364,289$

2012-13 Base entitlement 28,920,067$ 29,522,080$ 29,519,283$ 29,009,496$

Total General Purpose Funding 35,284,356$ 38,164,156$ 41,141,079$ 43,506,653$

Calculator tab: Recap total LCFF 35,284,356$ 38,164,156$ 41,141,079$ 43,506,653$

P2 ADA 5,168.37 5,262.10 5,164.50 5,170.98

LOCAL CONTROL FUNDING FORMULA

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

$45,000,000

2012-13 2013-14 2014-15 2015-16

2012-13 Base entitlement 2012-13 Categoricals as adjusted

py LCFF gap funding * cy ADA GAP funding - current year

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2012-13 2013-14 2014-15 2015-16

ADA 5,169.00 5,276.60 5,276.10 5,184.98

Estimated LCFF Sources per ADA 6,826.15$ 7,232.72$ 7,797.64$ 8,390.90$

Net Change per ADA 406.58$ 564.91$ 593.26$

Net Percent Change 5.96% 7.81% 7.61%

LCFF Entitlement per ADA

$5,000

$5,500

$6,000

$6,500

$7,000

$7,500

$8,000

$8,500

$9,000

2012-13 2013-14 2014-15 2015-16

Estimated LCFF Sources per ADA Entitlement per ADA

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Multi-Year Projection:

The multi-year projection incorporates the above assumptions about cola, ADA, LCFF. The LCFF

spending is shown as budgeted and spent in the year after it is scheduled to be earned by the

District. The projection uses the BASC Calculator assumptions of growth in the LCFF funding

model. Although negotiations for 13/14 are not settled (2013-14 includes an assignment for

salary adjustments of $1,200,000 in the ending fund balance), the $1,200,000 has been

incorporated into the adjustment of the 2014/15 and 2015/16 salary expenditure assumptions

in addition to Step and Column movement. The other major adjustment is the potential loss of

QIEA funding in 2014/15.

2013-14 First Interim Multi-Year Projection

Santa Paula Unified School District

Year: 2013-2014 2014-15 2015-16

Funded ADA 5276 5276 5,185

Estimated LCFF/ ADA $7,233 $7,798 $8,391

REVENUES

Revenue Limit Sources 38,114,066 41,141,079

43,506,653

Federal Revenues 3,784,283 3,117,008 3,155,438

Other State Revenues 4,107,284 2,048,863 2,048,714

Other Local Revenues 2,985,744 2,911,287 2,911,287

Total Revenues 48,991,377 49,218,237 51,622,092

EXPENDITURES

Certificated Salaries 20,288,383 21,389,657 21,662,457

Classified Salaries 6,458,053 6,936,555 6,979,101

Employee Benefits 9,629,122 10,695,885 11,057,285

Books and Supplies 3,919,007 2,609,062 2,058,211

Services, Other Operating 5,575,987 4,198,587 4,857,548

Capital Outlay 93,610 33,351 15,000

Other Outgo 941,687 941,687 941,687

Direct Support/Indirect Costs -131,910 -132,676 -177,850

Other Financing,Transfers Out Def. Maint. 192,585 193,000 194,000

Other Adjustments: LCFF/LCAP 2,277,786 2,979,936

Total Expenditures 46,966,524 49,142,894 50,567,375

Increase/Decrease in Fund Balance 2,024,853 75,343 1,054,717

Beginning Fund Balance 11,599,739 13,624,592 13,699,935

Ending Balance 13,624,592 13,699,935 14,754,652

Non-spendable (Inventory and Prepaids) 6,500 6,500 6,500

Reserve for Economic Uncertainties 1,408,996 1,501,800 1,536,607

Unassigned 7,678,514 8,666,420 9,706,235

Assigned (includes LCFF PY) 3,929,190 3,525,215 3,505,310

Restricted 601,392 0 0

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Other Funds:

Cafeteria Fund (Fund 130): This fund is used to account separately for Federal, State and local

resources to operate the Food Services operations. Budgeted Revenue is $2,652,035,

Expenditures $2,823,194. The projected ending fund balance is $145,721.

Deferred Maintenance Fund (Fund 140): This fund is used to account for the District’s

contribution to deferred maintenance projects. The State used to also contribute a portion, but

under LCFF this contribution will be rolled into the new calculation for Revenue. Projects that

are typically funded from Fund 140 would be longer term maintenance and upgrades to paint,

plumbing, electrical, and roofing for example. The projected ending fund balance is $770,138.

Building Funds (Fund 210/211): This fund is also known as the Bond Fund. This fund accounts

for the proceeds from the sale of Bonds and may not be used for purposes other than those for

which the bonds were issued. Bonds issued for the High School must also be accounted for

separately from bonds issued for elementary or middle school. The projected ending fund

balances are:

Fund 210: Former Elementary District funds: $1,697,497

Fund 211/212: High School District: $1,323,098

Capital Facility Fund (Fund 250): This fund is also known as Developer Fees fund, and is used to

accumulate monies received from fees levied on developers or other agencies as a condition of

approving development. The interest earned in this fund is restricted to this fund. The

expenditures are restricted to the purposes specified in agreements with the developer or

specified in Government Code. The Long Range Facilities Master Plan will be funded with

Developer fees, as well as potential building modifications or additions (such as computer labs).

The projected ending balance is $1,808,104.

County School Facilities Fund (Fund 350): This fund accounts for state apportionments for

facilities projects. The beginning balance is due to modernization money from the High School

District, and budgeted revenue in this fund is for the anticipated funding from the

Overcrowding Relief Grant ($4,996,600) which is partially funding the Science and Technology

Building Project on Santa Paula High School campus. The projected ending fund balance is

$1,132,704.

Special Reserve Fund for Capital Outlay Projects (Fund 401): This fund exists for the

accumulation of funds for capital outlay purposes. The beginning balance of $5,780,064 is from

the High School District. Capital projects as approved by the Board will be funded from fund

401, such as the District Office renovations. The projected ending fund balance is $5,619,176.

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Bond Interest Redemption Fund (Funds 510,511,512): This fund is controlled by the County

Office of Education and is used for the repayment of bonds issued for the District. According to

Education Code 15234 any money remaining in this account after payment of all bonds and

coupons payable from the fund, or any money in excess of an amount sufficient to pay all

unpaid bonds and coupons payable, shall be transferred to the general fund upon order of the

county auditor.

Summary

Since the 2008-09 school year there have been unprecedented funding reductions to California

public schools, and to the Santa Paula School Districts. Santa Paula Unified is now faced with

the promise of funding increases, but this is coupled with the uncertainty in the form of the

future of the Local Control Funding Formula state funding commitments, and the emerging

Local Control Accountability Plan (LCAP) requirements. The District has formed a committee of

stakeholders, including but not limited to Administrators, Certificated staff, Classified Staff,

Parents, Community members, students, English language learners, and Board members, to

discuss the development of plans to use the additional resources. The District must continue to

engage this discussion, bring ideas and plans to the public in a variety of forms, including public

hearings. Maintaining fiscal solvency, while we work towards meeting the District and State

priorities will be outlined in the LCAP as it is developed.

Risk is associated with the implementation of the Local Control Funding Formula, in the fact

that future funding is not written into current law. The budgets for 2014/15 and 2015/16

should take this into account, by using the prior funding in the next budget year, and keeping

one year of LCFF in reserve as the plan is implemented in future years, until full funding is

achieved.