sbusd budget workshop fall 2014-15

SBUSD BUDGET WORKSHOP FALL

2014-15 Saturday, September 27

South Bay School Library (9-11AM)

Presented By:

Gary Storts, Superintendent

Johnna Emery, Business Manager

Lynette Kerr, Director of Fiscal Services at HCOE

SBUSD MISSION STATEMENTTo prepare today’s student to succeed in tomorrow’s world by doing the following:

• Provide a safe, healthy and nurturing school environment

• Teach the skills necessary to prepare students for success in high school and beyond

• Instill in students a sense of personal and civic responsibility and global awareness

• Provide students with problem solving skills to thrive in a technological world

• Instill in students a desire to be lifelong learners

TODAY’S BUDGET WORKSHOP AGENDA -1. Lynette Kerr – Director of Fiscal Services at HCOE

2. Process and Budget Timelines

3. SBUSD Budget – Past, Present and Future Projections

4. Pressures on the Budget

BUDGET PROCESS AND TIMELINE Building the SBUSD budget is a year around event, beginning in October

with enrollment projections, and ending the next October when the district and school sites must have revised budgets. All activities are influenced by the CA budget process, budget “pressures” which vary from year to year, and change in employee compensation.

October – December Enrollment projections for next school year are prepared

Business Manager uses current enrollment data & trending information to predict ADA Business Manager provides best estimate of revenues Enrollment projections drive allocations 1st Interim Report Due to HCOE

BUDGET PROCESS TIMELINE …

January - February Start of State’s budget process Governor releases state budget document SBUSD gets first look at projected revenues (formal analysis) State legislature begins budget process

March - May 2nd Interim Report due to HCOE Governor’s Office issues “MAY Revise” – more accurate look at CA revenues District Office revises SBUSD budget CA Legislature continues budget discussion

BUDGET PROCESS TIMELINE … May – July

Legislature continues budget discussion 3rd Interim (if required) Constitutional deadline for CA Legislature to pass state budget bill Governor must sign or veto the CA budget bill within 12 days of legislative action Governor may use line-item veto to reduce or eliminate specific expenditures Target date for the governor to sign the CA budget is June 30 of each year SBUSD must pass budget by June 30 of each year – (CA Law) Final CA budget will inform SBUSD what revenues to expect for the next school

year

August 45 Day Revise

SBUSD BUDGET - PAST, PRESENT AND FUTURE

• Chart of Accounts

• Trends over Time

• Where are We Going?

CHART OF ACCOUNTS FUND – A self-balancing set of accounts, recording assets and liabilities.

(Examples: General Fund, Charter School Fund, and Cafeteria Fund)

RESOURCE – “Where” did the money come from? Used to classify revenues & expenditures in accordance with restrictions or special reporting requirements placed on the LEA by law or regulation. (Examples: Lottery, Title I, Special Education, Transportation, After School Education & Safety)

GOAL – “Who” is the target audience? Define the broad purpose or objective(s) of the expenditure. (Examples: Regular Education, Administration, Special Education, Athletics)

FUNCTION – “What” activities or services will be provided? Describes the activities or services performed in order to accomplish the goal. Function refers to activities performed to support one or more goals. (Examples: Instruction, School Administration, Pupil Transportation, Maintenance)

CHART OF ACCOUNTS OBJECT – “What” specific good or service is being purchased? What specific

revenue is earned? This field applies to expenditures, revenues, and balance sheet accounts including assets, liabilities, and fund balances. (Examples: Teacher Salaries, Health & Welfare, Textbooks, Telephone Service, State Lottery Revenue)

SCHOOL – Designates a specific physical school structure or group of structures which form a campus. Refers to a physical location. (Examples: District, South Bay, Pine Hill)

MANAGEMENT – User defined code allows for internal tracking of expenses, projects, etc. This district has assigned staff their own code to track $300 lottery allowance. (Examples: Summer School, GATE, Playground, Pine Hill Portable)

TRENDS OVER TIME - REVENUES

Revenues appear to be growing. 07/08 = 3,981,731 13/14 = 4,419,067 14/15 = 4,487,605

This is misleading.

Includes fluctuating local revenues (fire insurance, etc.)

Doesn’t take into consideration rising ADA, staffing demands, etc.

Need to look at Revenue/ADA

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

8010-8099 2119153.9 2128117.26 1869628.45 1964396.48 2106814.6 2236292.76 3010469.27 3213794

8100-8299 519699.3 573586.31 503155.51 594811.4 627621.71 593581.69 616516.16 586495

8300-8599 1093883.31 980539.41 870933.19 877878.46 897399 929196.45 464838.1 367452

8600-8799 249002.97 292258.34 767293.19 518008.46 303806.03 374190.43 327243.73 319864

250,000.00

750,000.00

1,250,000.00

1,750,000.00

2,250,000.00

2,750,000.00

3,250,000.00

Fund 01 Revenues

8010-8099

8100-8299

8300-8599

8600-8799

Revenue Limit

Federal RevenueState Revenue

Local / Misc.


Revenues per ADA were highest in 2007/08.

Bottomed out in 2009/10, then started climbing. 07/08 = 10,453 09/10 = 8,412 13/14 = 9,607 14/15 = 9,409

Still not back to 2007/08 levels per ADA, despite increased expenses and demands on schools.

Does not include 86xx local revenues. Local revenues are not dependent on ADA, and fluctuate from year to year.

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

8010-8099

5934.50922736565

5484.55558991805

4848.87299652472

5112.15447873836

5097.66652955552

5108.02366377341

7068.1566256574

7255.43289310306

8100-8299

1455.37343526842

1478.23903407041

1304.93155765341

1547.93993650133

1518.59882890948

1355.82843764276

1447.49286250939

1324.06592166159

8300-8599

3063.32664034277

2527.03316839338

2258.76132060792

2284.59496174465

2171.35425488156

2122.42222476016

1091.37420172802

829.556383338977

8xxx

10453.2093029768

9489.82779238184

8412.56587478604

8944.68937698433

8787.61961334656

8586.27432617634

9607.02368989482

9409.05519810362

1,000.00

3,000.00

5,000.00

7,000.00

9,000.00

11,000.00

Fund 01 – Revenue / ADA

8010-8099

8100-8299

8300-8599

8xxx


2011-12

2012-13

2013-14

2014-15

2011-12

2012-13

2013-14

2014-15

8010-8099

346665

400890

484569

546079

8100-8299

0 0 0 0

8300-8599

54449

72049.96

50138.29

29239

8600-8799

-27.5

7

58905.42

6922.56

1500

8xxx

401086.4

3

531845.3

8

541629.8

5

576818

(50,000.00)

150,000.00

350,000.00

550,000.00

Charter School Revenues

8010-8099

8100-8299

8300-8599

8600-8799

8xxx

2011-12 2012-13 2013-14 2014-15 2011-12 2012-13 2013-14 2014-15

8010-8099

5360.52265347147

5385.41106931757

6375.06906985923

6642.48874832745

8100-8299

0 0 0 0

8300-8599

841.951445801763

967.89306824288

659.62754900671

355.662328183919

8xxx

6202.47409927323

6353.30413756045

7034.69661886594

6998.15107651137

500.00

1,500.00

2,500.00

3,500.00

4,500.00

5,500.00

6,500.00

7,500.00

Charter School Revenue / ADA

8010-8099

8100-8299

8300-8599

8xxx

TRENDS OVER TIME - EXPENSES

Across General Fund, certificated salaries comprised 42% of the budget.

Classified salaries comprised 17% of the budget.

Benefits comprised 21% of the budget.

Total compensation = 80% leaving 20% for materials and services.

Certificated Salaries

Classified Salaries

Employee Benefits*

Materials & Supplies

Services

Capital ImprovementsOther Outgo

*Includes H&W, SUI, Workers’ Compensation, FICA, Medicare

1xxx42%

2xxx17%

3xxx21%

4xxx7%

5xxx9%

6xxx2%

7xxx2%

2007-08 Unaudited Actuals

1xxx

2xxx

3xxx

4xxx

5xxx

6xxx

7xxx


Across Operating Funds 01 and 09 (General & Charter), certificated salaries comprised 35% of the budget.




1xxx35%

2xxx18%

3xxx19%

4xxx8%

5xxx11%

6xxx2%

7xxx6%

2013-14 UnauditedActuals

1xxx

2xxx

3xxx

4xxx

5xxx

6xxx

7xxx


Across Operating Funds 01 & 09 (General & Charter) certificated salaries comprised 36% of the budget.




1xxx35%

2xxx18%

3xxx19%

4xxx8%

5xxx11%

6xxx7%

7xxx2%

2014-15 Preliminary

1xxx

2xxx

3xxx

4xxx

5xxx

6xxx

7xxx

TRENDS OVER TIME - SPENDINGExpense Vs. Revenues – Fund 01 Year Expenses Revenue Differenc

e

2007/08 4,011,800 3,981,739 (33,061)

2008/09 3,758,860 3,974,501 215,642

2009/10 3,941,977 4,011,010 69,033

2010/11 3,896,814 3,955,095 58,281

2011/12 3,827,934 3,935,641 107,707

2012/13 4,026,904 4,133,261 106,358

2013/14 4,700,539 4,419,067 (281,472)

2014/15 4,710,558 4,487,605 (222,953)2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

-

500,000.00

1,000,000.00

1,500,000.00

2,000,000.00

2,500,000.00

3,000,000.00

3,500,000.00

4,000,000.00

4,500,000.00

5,000,000.00

8xxx

1xxx-7xxx

TRENDS OVER TIME - SPENDINGExpense Vs. Revenues – Fund 09 Year Expenses Revenue Differenc

e

2011/12 376,535 401,086 24,552

2012/13 670,837 531,845 (138,991)

2013/14 614,377 541,630 (72,747)

2014/15 661,732 576,818 (84,914)

2011-12 2012-13 2013-14 2014-15 -

100,000.00

200,000.00

300,000.00

400,000.00

500,000.00

600,000.00

700,000.00

800,000.00

8xxx 1xxx-7xxx

TRENDS OVER TIME - RESERVESReserve Level - % of Budget Reserves – Budgeted Amount

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

6.76%

9.53%

7.91%

10.46%

13.73%

16.46%

12.88%

11.55%

Reserve %

Rlevel

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

-

100,000.00

200,000.00

300,000.00

400,000.00

500,000.00

600,000.00

700,000.00

800,000.00

900,000.00

287,408.72

406,965.40

339,472.04

443,186.08

641,248.13

822,724.42

680,156.10

612,213.00

Reserves

Reserves

TRENDS OVER TIME – ADAAverage Daily Attendance

ADA drives funding as part of the LCFF calculation.

Many of our students are interdistrict transfers.

Charter enrollment is holding steady, but will likely increase.

2014/15 saw influx of 4th grade.

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

ADACS

NaN NaN NaN NaN 64.666

74.443

76.014

82.21

ADASB

357.09

388.02

385.58

384.26

413.29

437.8 425.92

442.947

25

75

125

175

225

275

325

375

425

ADACS

ADASB

WHERE ARE WE GOING? REVENUES – LCFF changed the funding formula, making it challenging to

predict how much to budget. CDE and DOF projections vary substantially (between $200k and $300k per year).

We will soon reach the 2007/08 funding level.

EXPENSES – Total Compensation (salaries & benefits) comprise 76% of the operating budget. This will continue to rise as STRS & PERS rates increase in the future.

In 2013/14 we substantially cut into our reserves by deficit spending in the amount of $281,472 in the General Fund and $72,747 in the Charter Fund.

In 2014/15 we anticipate deficit spending an additional $222,953 in the General Fund and $84,914 in the Charter Fund.

2016/17 is the last year of the Charter School Loan payment of $50,000 annually.

WHERE ARE WE GOING? RESERVES – Our reserves are currently 11.55% for the 2014/15 fiscal year.

We are required to maintain a 4% reserve.

Current projections show a decrease of approximately 1% per year in our reserves if we continue deficit spending at the current rate.

ADA – We currently have a healthy attendance rate. The charter school is averaging 97.38% attendance. Pine Hill is averaging 95.27% and South Bay is averaging 96.88% attendance.

If we maintain these rates, our revenues will increase. We budgeted for a lower attendance rate.

South Bay’s 4th grade class was unexpectedly large. This resulted in the need for a 4/5 combo class and a new teacher, which increased the certificated salary & benefits budget.

WHERE ARE WE GOING? INTERIMS / BUDGET REVISION – It’s time to revise & update the budget for

1st interim. It’s important to communicate any changes in funding, staffing, expenditures, etc. as quickly as possible in order to update the budget and plan accordingly. This includes anticipated multi-year changes.

PRESSURES ON THE BUDGET

Pressures on the budget vary from year to year for a variety of factors, including:

PRESSURES ON THE BUDGET … Increase in STRS & PERS Contributions

Facility needs and updates – what cannot be covered under Prop 39 PH Cafeteria Floor (Williams Compliance finding) Bus Barn (failing) SB Parking Lot (failing) Pine Hill Parking Lot Extension (safety) Painting – PH & SB (school climate) Plumbing (classroom 00 @ PH)

PRESSURES ON THE BUDGET … Special Education (cost rising)

Collective Bargaining Salaries + Health & Welfare = Total Compensation

CA Rainy Day Fund

Proposition 98 Reserve Cap

NO more Common Core Implementation $ after 2014-15

Proposition 30 (ends in 2018) Sales Tax expires 12/31/2016 = 0.25% Income Tax expires 12/31/2018 = 3% on top income earners

HOW TO STAY OUT OF THE FINANCIAL DOG HOUSE Common causes of financial problems:

Overly optimistic estimates of state economics Overly aggressive estimates of enrollment, attendance, and average daily attendance

(ADA) Failure to document budget assumptions Loss of control of staffing levels and costs Underestimating “automatic” cost growth Use of one-time money for ongoing expenses Poor decisions at the negotiating table Failure to consider multiyear impact of budget decisions Failure to follow through on budget decisions Poor budget monitoring Chronic deficit spending Inadequate reserves

FINAL THOUGHTS … Things are getting better, BUT funding is still less than 2007-08

Local Control does NOT mean “no regulations”

The Strategic Planning Process will help determine who we want to be, thus dictating how we budget… so please show up – Oct. 18, 2014

AND…

sbusd budget workshop fall 2014-15

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