2018-19 First Interim Budget Harold Sullins, Assistant Superintendent Briana Hennes, Senior Director
Presentation Overview Budget Information First Interim Budget Multi-Year Projections Next Steps
Moving Forward After Full Implementation of LCFF At full implementation of LCFF we can expect: Base grant funding will be equalized across all districts Supplemental and concentration grant funding will continue to be based on Unduplicated Pupil Percentage Annual growth in district funding will be determined by; (1) the change in ADA, and (2) the COLA (minimal increases of 2% - 3% annually) When Proposition 98 funding is in excess of LCFF requirements for growth and COLA, the monies could be used for: New or expanded categorical programs Discretionary incentives to LCFF
Moving Forward After Full Implementation of LCFF New and existing challenges will require action to ensure fiscal health of the district. Reduction of revenue due to loss of ADA as a result of declining enrollment Pension cost increases, step and column, health and welfare, and rising special education costs reduce purchasing power of new dollars Structural deficit continues to erode fund balance Restoration of full Routine Restricted Maintenance Account flexibility beginning in 2019-20 An economic slowdown is expected within the next couple of years
Budget Cycle and Reporting State District 1 st Interim Budget Budget Adoption (December) (June/July) Governor’s Budget 2 nd Interim(March) Proposal (January) Budget Adoption May Revision (May) (June)
2018-19 First Interim Budget Report Represents actual revenues and expenditures as of October 31 st , 2018 Budget updated to reflect projected balances for June 30 th , 2019 District self certifies their financial status from the following three options: Positive – District will meet its financial obligations in current and two subsequent years Qualified – District may not meet its financial obligations in current and two subsequent years Negative – District will be unable to meet its financial obligations for the remainder of the current year or subsequent fiscal year.
Adopted Budget vs. First Interim Assumptions Adopted Budget First Interim Enrollment 10,812 10,693 Increase/(Decrease) from PY (95) (214) Projected ADA 10,367 10,252 Unduplicated Pupil Percentage 56.12% 56.83% Cost of Living Adjustment (COLA) 3% 3.7% One-time Discretionary Funding $3,605,326 $1,911,499 Step and Column Yes Yes Lottery (Unrestricted) $146 Per ADA $151 per ADA Lottery (Restricted) $48 Per ADA $53 per ADA
Enrollment and ADA Upland Annual Enrollment and ADA Trend 12,000 11,400.00 11,665 11,200.00 11,380 11,500 11,000.00 11,221.84 11,136 10,800.00 11,012 10,910.24 10,907 11,000 10,600.00 10,693 10,679.63 10,623.58 10,546 10,400.00 10,500 10,382 10,408.02 10,200.00 10,252.00 10,111.31 9,954.05 10,000.00 10,000 9,800.00 9,600.00 9,500 9,400.00 9,000 9,200.00 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 Enrollment P-2 ADA ADA Trend Line
LCFF Revenue Growth LCFF REVENUE $120,000,000 $ 100,872,607 $ 99,804,276 $ 98,322,001 $100,000,000 $ 92,991,918 $91,141,382 $88,225,669 $80,367,672 $80,000,000 $73,588,186 $60,000,000 $40,000,000 $20,000,000 $- 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 LCFF REVENUE $73,588,186 $80,367,672 $88,225,669 $91,141,382 92,991,918 98,322,001 99,804,276 100,872,607 COLA 1.57% 0.85% 1.02% 0.00% 1.56% 3.70% 2.57% 2.67%
Budgetary Impacts Increasing Retirement Contributions INCREASING RETIREMENT CONTRIBUTIONS Original Contribution Rate Additional Contribution $13,220,267 $12,419,666 $11,066,948 $9,656,815 $8,463,669 $7,299,542 7,066,742 6,231,655 $4,872,584 $5,321,531 $3,584,173 $2,358,241 $1,023,235 $179,215 $6,276,307 $6,194,364 $6,188,011 $6,105,428 $6,072,642 $6,153,525 $5,142,316 2014 - 15 2015 - 16 2016 - 17 2017 - 18 2018 - 19 2019 - 20 2020 - 21
H&W premiums have doubled since 2003-04 Upland USD – Health and Welfare Trends $17,176 2003-2019 $17,000 $16,564 $16,088 $16,045 $16,076 $16,082 $15,708 $15,020 $15,329 $15,000 $14,998 $14,786 $14,327 $14,386 $14,359 $14,246 $13,174 $13,373 $12,792 $13,000 $12,347 $11,773 $12,039 $10,868 $11,000 $10,295 $10,451 $10,593 $9,417 $9,784 $9,120 $9,000 $8,481 $8,776 $7,686 $7,686 $7,000 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Blue Shield Kaiser
First Interim Budget 2018-19 Unrestricted Restricted Total Beginning Balance $8,653,226 $3,867,045 $12,520,271 Total Revenues $104,871,125 $13,651,438 $118,522,563 Total Expenditures including Other Outgo $87,150,764 $31,914,617 $119,065,381 Total Contributions ($18,263,722) $18,263,722 0 Change in Fund Balance ($543,361) $543 ($542,818) Projected Ending Balance $8,109,865 $3,867,588 $11,977,453
General Fund Revenue Sources Total General Fund Revenues Revised Budget 2018-19 State Revenue Local Revenue 5% 6% Federal Revenue 6% General Purpose (LCFF) Revenue 83%
General Fund Expenditures Total General Fund Expenditures Revised Budget 2018-19 Capital Outlay Other Outgo/Transfers Other Services & Oper. 0.2% 11.6% 1.5% Books and Supplies 5.4% Certificated Salaries 45% Benefits 23.3% Classified Salaries 13%
Use of Multi-Year Projections Multi-year projections are required by AB 1200/AB 2756 Recognize they are projections, not forecasts Projections are expected to change as various factors change – they are not predictions Projections are the mathematical result of today’s decisions based on a given set of assumptions Forecasts are predictions of the future – there is a higher implied reliability factor than for projections Projections will change any time the underlying factors change – therefore plan to adjust as conditions change
Assumptions for Multi-Year Projections Assumptions 2019-2020 2020-2021 Total LCFF Funding $99,804,276 $100,872,607 Est. Unduplicated % 57.59% 57.31% Supplemental/Concentration $11,288,433 $11,254,790 Enrollment 10,546 10,382 Increase/(Decrease) from PY (147) (164) Projected ADA 10,111 9,954 One-Time Funding $0 $0 Step and Column Yes Yes Health Benefits Increase $639,788 $658,150 Lottery (Unrestricted)-1.5% $151 per ADA $151 per ADA Lottery (Restricted) $53 per ADA $53 per ADA
Multi-Year Projections – Unrestricted General Fund 2018-2019 2019-2020 2020-2021 Beginning Balance $8,653,226 $8,109,865 $4,536,751 Total Revenues $104,871,125 $104,425,693 $105,469,031 Total Expenditures including Contributions and Outgo $105,414,486 $107,998,807 $108,806,929 Change in Fund Balance ($543,361) ($3,573,114) ($3,337,898) Projected Ending Balance $8,109,865 $4,536,751 $1,198,853
Deficit Spending Trends - Unrestricted Unrestricted General Fund Deficit Spending 6,000,000 4,000,000 2,000,000 - 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Actual Actual Actual Actual Actual Actual Actual Actual Proj (2,000,000) (4,000,000) (6,000,000) (8,000,000)
Multi-Year Projections – Combined General Fund 2018-2019 2019-2020 2020-2021 Beginning Balance $12,520,270 $11,977,452 $7,459,018 Total Revenues $118,522,563 $115,125,693 $116,169,031 Total Expenditures including Contributions and Outgo $119,065,381 $119,644,127 $120,527,553 Change in Fund Balance ($542,818) ($4,518,434) ($4,358,522) Projected Ending Balance $11,977,452 $7,459,018 $3,100,496 $3,867,587 $2,922,267 $1,901,643 - Restricted Balance $4,537,904 $947,427 $0 - Assigned Balance - 3% Reserve for Economic $3,571,961 $3,589,324 $1,198,853* Uncertainties (3%) (3%) (1%) *Does not meet required 3% reserves
First Interim Certification Option 1 Qualified Certification - Board action to approve plan for reductions - Report to the State Controller and Superintendent of Public Instruction - County Superintendent has option to intervene - Governor’s January Budget Proposal may change financial outlook Option 2 Positive Certification - Include $3.5 Million adjustment in 2020-21 - Begin to identify budget reductions to fulfill adjustment - Provides time to plan - Begins to address the structural deficit
Potential Budget Contingencies Negotiated Reductions Non-Negotiated Reductions Eliminate K-3 Class Size Reduction - $1.7M Eliminate Elementary PE Staffing - $700,000 Increase employee contributions for Health and Eliminate Elementary Music - $235,000 Welfare Benefits - TBD Site and Department Budget Reductions - TBD Increase SPED Preschool Class Size $130,000 Reduce Home to School, Athletic, Band Transportation - $300,000 Reduce Counseling Services -$185,000 Reduce Nursing Services - $95,000 Reduce Consulting Services -TBD Reduce Elementary Administrators - $700,000 Reduce Instructional Aides - TBD Eliminate Special Projects - $165,000 Clerical Staff Reduction - TBD Athletic Trainers - $65,000
Fund Balance – Measure K Beginning Net Budget Projected Ending Fund/Resource Balance Activity Balance Measure K $2,506,593 ($1,884,028) $622,565
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