Walnut Valley Unified School District

Board of TrusteesMarch 19, 2014

2013-14 Second InterimFinancial Report

Agenda

Changes Since First Interim (as of 10/31/2013) Changes Related to Governor’s January Budget

Proposal Multi-Year Projection In Conclusion ….. Questions

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Changes since First Interim Report 10/31/13Unrestricted General Fund

LCFF/Revenue Limit Sources $ 0 Other State Revenues $ 0 Other Local Revenues $ (530,000)

Total Revenues $ (530,000)

Salaries and Benefits $ (1,070,392) Supplies and Services $ 89,892 Capital Outlay $ 0 Indirect Costs $ 0

Total Expenditures $ (980,500)

Other Sources/Uses and $ 0Contributions

Unrestricted GF Balance $ 450,500

Other local revenues decreased - $(500,000) lease and rental income from RHA, and $(30,000) interest earnings in County Pool

Appropriation for benefits decreased – benefit eligibility review, historical trend analysis

Supplies and Services increased – Professional/Consulting Services and Operating Expenditures

Fund balance increased $450,500– Decrease to Reserve for Economic

Uncertainties $(33,577) – at 3% level– Increase to Other Commitments

$484,077

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Changes since First Interim Report 10/31/13Unrestricted General Fund

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2013-14 First Interim Report

2013-14 Second Interim Report

Difference Explanation

LCFF/Revenue Limit 91,066,850 91,066,850 0

Federal Revenue 10,000 10,000 0

Other State Revenue 2,574,080 2,574,080 0

Other Local Revenue 1,553,586 1,023,586 (530,000) Lease and Rental Revenue and Interest

Total Revenues 95,204,516 94,674,516 (530,000)

Salaries and Benefits 81,000,194 79,929,802 (1,070,392) Employee Benefits

Supplies and Services 8,084,835 8,174,727 89,892

Capital Outlay 38,090 38,090 0

Other Outgo 1,650,585 1,650,585 0

Total Expenditures 90,773,704 89,793,204 (980,500)

Other Financing Sources/Uses

(4,857,814) (4,857,814) 0

Net Increase/Decrease

(427,002) 23,498 450,500 No deficit spending projected

Changes since First Interim Report 10/31/13Unrestricted General Fund

Improving 2013/14 Ending Balance– Potential increase in Enrollment/ADA through P2

2012-13 statewide average for unified district – 94.08% 2012-13 Walnut Valley Unified School District – 97.59%

– Appropriation review – Expenditure savings Second Interim to Estimated Actuals (June 2014)

– Cost containment – review expenditures for necessity– Alignment of programs under the LCAP– Additional funds in Governor’s January Budget Proposal

2013-14 LCFF approved with initial funding in the amount of $2.1 billion 2014-15 $4.5 billion in on-going GAP funding, approximately 28% - $548 per ADA

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Changes Related to Governor’s January Budget Proposal for 2014/15Key Elements

Proposition 98– $6.3 billion over 2013-14 due to an increase in projected revenues

$2.7 billion – for retirement of K-14 deferrals (cost $6.1 billion)– An improving economy increased minimum funding levels

2012-13 - $1.8 billion 2013-14 - $1.5 billion

Reserve– A constitutional amendment that would mandate a portion of state

revenue growth be dedicated to a Special Reserve Fund, and accrue to the Prop 98 reserve for “smoothing” in fluctuations in the minimum guarantee

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Multi-Year ProjectionsBudget Year +2 (2013-14 through 2015-16)

Includes– Revenue calculations under LCFF with GAP

funding 2013-14 $92,010,815 2014-15 $99,397,151 2015-16 $107,039,207

– ADA Projections: 2013-14 14,329 2014-15 14,329 2015-16 14,329

– Step and column increases

– Adjustments to expenditures to reflect one-time items, utility increases and CPI

– Adjustments for the estimated cost of collective bargaining agreements through 2014-15

4 furlough days in 13-14 and 14-15 4 furlough days back on schedule in 15-16

– Reductions in the amount of $700,000 in 2014-15 (on-going pursuant to Fiscal Stabilization Plan)

– $700,000 transfer in from Building Fund (Fund 21) in support of Routine Restricted Maintenance Fund (RRMF) eliminated in 2015-16

– DEU in budget and projection years meets the recommended minimum reserve amount (3%)

– LCFF GAP funding reserved in 2014-15 and 2015-16

– Projecting positive fund balances in each of the projection years

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Multi-Year ProjectionsBudget Year +2 (2013-14 through 2015-16)

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Adopted Budget 2013-14 2014-15 2015-16

Beginning Fund Balance $9,305,368 $9,328,866 $15,420,482

Total Revenues $112,218,461 $116,672,597 $123,614,653

Total Expenditures $112,194,963 $110,580,981 $114,938,837

Net Increase/Decrease in Fund Balance(Structural Deficit)

$23,498 $6,091,616 $8,675,816

Ending Fund Balance $9,328,866 $15,420,482 $24,096,298

Required Components of Ending Fund Balance

$5,572,182 $13,325,851 $13,296,554

Ending Fund Balance(Committed)

$3,756,684 $2,094,631 $10,799,744

Combined General Fund

Increased reserve requirement for one years GAP funding

In Conclusion …..

The Governor’s proposal marks the beginning of the budget cycle– May Revision– Legislature adopts budget by June 15

Student data collections are more important than ever; CALPADS, CBEDS– Counts feed into the supplemental and concentration factors of the LCFF

Local Issues– Adequate reserves are absolutely necessary– Cash borrowing and liquidity– Managing the structural deficit– Declining Enrollment– Collective Bargaining– CalSTRS and CalPERS – significant increase to contribution rates in the future

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Questions?

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2013-14 Second Interim Report.pptAuthor: Jeanette UllrichTitle: Assistant Superintendent, Business ServicesWalnut Valley Unified School District