2018-19 Tentative Budget Presented by: Mark Mathers, Chief Financial Officer Mike Schroeder, Budget Director April 10, 2018 Attachment E - Updated
Agenda for Tentative Budget 1. General Fund – Update on General Fund Structural Deficit (adjusted for certain base budget changes and other changes) – Action on Budget Recommendations – Review of General Fund Sources and Applications 2. Other District Funds 2
Action Items Needed Today for General Fund 1 • Take action on Recommended Reductions – Approve, approve as modified or not accept 2 • Take action on the one item with No Recommendation (Internal Auditor) 3 • Take action on Budget Additions – Approve, approve as modified or not accept 4 • Confirm use of fund balance to cover deficit, or direct staff to seek additional reductions 3
General Fund Deficit and Budget Recommendations 4
Structural Deficit FY19 General Fund (in Millions) FY18 Structural Deficit Carryforward ($16.6) Revenue Increases $3.3 Employee Salary Increments & Health Ins ($10.0) Salary & Benefit Basis Adj $4.9 Other Operating Increases ($1.8) Special Education Transfer $1.8 Structural Deficit Before Rebase/Contras $ (18.4) 5
Required Action • Base budget reductions have reduced the deficit to $9.2 million. • At that amount, without additional action by the Board, the District will: – Fail to comply with the new Board Policy to have a structurally balanced budget by FY21 – Deplete almost all of our fund balance by FY21. 6
Action Item #1 – Budget Reductions • Budget reductions were proposed by departments and represent management’s professional judgment on how to achieve savings with the least impact. • Reductions were then scored by Financial Review Committee with Leadership Team overview based on assessment of the degree of impact in relation to following criteria: – Alignment with District’s strategic plan – Degree of impact to direct instruction – Risk assessment – Fiscal impact – Availability of alternative delivery service – Perceived results of program 7
Where & How Do We Reduce Costs? Direct Instruction Strategies Regular Instruction 220,825,631 Special Programs 5,326,974 Vocational Programs 5,764,765 (1) Shift costs to other funds Other Programs 13,747,078 Co-curricular Programs 4,383,049 (2) Use Different Service Transfers & Contingency 48,331,835 Delivery Model Subtotal 298,379,332 61.9% School Support (1) Shift costs to other funds Student Support 33,149,139 School Administration 35,657,071 (2) Use Different Service Instructional Staff Support 16,370,820 Delivery Model Subtotal 85,177,030 17.7% Operations and Maintenance Includes police function. Further Operation and Maintenance 49,712,473 cuts to Operations start to be unsustainable. Walk zone Student Transportation 16,664,448 extension is proposed. Subtotal 66,376,921 13.8% Central Services General Administration 6,625,329 Automation + Service Level Central Support 25,228,975 Cuts Total - Support/Central Services 31,854,304 6.6% Grand Total 481,787,587 100.0% 8 rev.
Addressing the Budget Deficit Budget Reductions Do NOT Equate to Service Level Reductions •Grant Funds Shifts to Other Funds •Reallocation of Staff to Proper Fund Use of Different Service •Process Improvements / Work-Around’s Delivery Model •Review of Other Agencies’ Approaches Reductions Through •New job application software (Applitracks) may allow Greater Use of Automation reduction of HR and Position Control staff in FY 2020 •Central services reductions Tolerable Reductions to •Increases to walk zones Service Levels •Professional development & training 9
Major Budget Recommendations • Total of $4.2 million of reductions identified, in addition to $9.2 million in base budget reductions and contra accounts • Deletion of Positions – 6.05 positions shifted from General Fund to other funds – 30.12 positions beginning in FY19 – 2.00 positions identified for FY20 • Reduce District travel budgets by 50% • Increase ES and MS walk zones by ¼ mile – reduction of 8-10 drivers • Further reductions of operating budgets 10
Transition Plan for Deleted Positions The preliminary budget identifies positions that are proposed to be eliminated by Fiscal Year 2020-21. Some of these flagged positions are currently occupied by an employee(s). For incumbents in these positions, below is a summary of the process that is recommended to the Board: Professional-Technical and Educational Support Professional Positions • For Pro-Tech and ESP employees in one of these flagged positions, if that position or a comparable positon becomes vacant prior to FY 2020-21, the position would be eliminated and negotiated agreements would be followed. • Human Resources and Labor Relations will assist employees to find other positions. • If there are no vacancies in a flagged position by FY2020-21, there would be a reduction in force in FY2020-21 following the negotiated agreements. 11
Transition Plan for Deleted Positions Certified Positions • Certified staff in one of these flagged positions would go through the regular transfer and overage process for open positions as outlined in the negotiated agreement. • Historically, the high turnover rates of certified positions for the District has allowed teachers to fill positions that have been vacated because of retirements and separations. 12
Changes to Feb. 28 Recommendations • Base Budget Adjustments – Upon further review, base budget adjustments in certain areas are not available and have been reversed (ROTC, Family School Partnerships, MTSS, Parent U., etc.) – In reviewing trends for energy prices, we reduced our base budget adjustment for fuel costs (gas) down from a reduction of $400,000 to only $50,000 • Recommendations for Budget Reductions – Removed proposal to reduce 4.5 FTE counselor positions (although this proposal would have maintained at least one counselor per ES) – 2% additional cuts to Board/Superintendent • Budget Additions – Added Fingerprint Technician position – Modified bond personnel cost 13
Updates to Revenue Projections • Property Taxes (District keeps 2/3 of 75-cent operating rate) – State’s Pro Forma Projection is higher than our projection in February – Results in $697,211 in greater revenues for FY19 • Government Services Tax – For FY18, currently tracking at 10+ % year-over-year growth – This increases the base for FY19, but we still assume +5% growth. – Adds $614,568 to revenue projection 14
Summary of Budget Recommendations by Office 15
Reductions by Functional Area Base Budget Base Budget Cuts Other Reductions Total Cuts Direct Instruction Amount FTE Amount Amount Regular Instruction 220,825,631 (1,020,205) - - (1,020,205) Special Programs 5,326,974 (25,000) (5.00) (373,382) (398,382) Vocational Programs 5,764,765 - - - - Other Programs 13,747,078 (202,909) (10.00) (682,764) (885,673) Co-curricular Programs 4,383,049 (10,000) - (10,000) (20,000) Transfers & Contingency 48,331,835 - - (103,800) (103,800) Subtotal 298,379,332 61.9% (1,258,114) (15.00) (1,169,946) (2,428,060) School Support Amount FTE Amount Amount Student Support 33,149,139 (396,000) (1.82) (138,472) (534,472) School Administration 35,657,071 (200,000) (1.00) (69,534) (269,534) Instructional Staff Support 16,370,820 (234,703) (11.70) (1,099,962) (1,334,665) Subtotal 85,177,030 17.7% (830,703) (14.52) (1,307,968) (2,138,671) Operations and Maintenance Amount FTE Amount Amount Operation and Maintenance 49,712,473 (1,779,055) (1.00) (118,558) (1,897,613) (50,000) (8.00) (550,000) (600,000) Student Transportation 16,664,448 Figures shown Subtotal 66,376,921 13.8% (1,829,055) (9.00) (668,558) (2,497,613) do not include “contra” adjustments for Central Services Amount FTE Amount Amount salary savings. General Administration 6,625,329 (268,125) (3.00) (435,785) (703,910) Central Support 25,228,975 (970,000) (4.35) (673,058) (1,643,058) Total - Support/Central Services 31,854,304 6.6% (1,238,125) (7.35) (1,108,843) (2,346,968) Grand Total 481,787,587 100.0% (5,155,997) (45.87) (4,255,315) (9,411,312) 16 rev.
Recommendations by Functional Area Percent of Budget Reduction by Area 8.0% 7.4% 7.0% 6.0% 5.0% 3.8% 4.0% 2.5% 3.0% 2.0% 0.8% 1.0% 0.0% Direct Instruction School Support Operations and Central Services Maintenance • Overall, Central Services/Administration is proposed to be cut 7.4%, the largest cut for any area. 16.2
Proposed Reductions in Instruction • EL Program • Total of 136.5 EL teachers in FY18 budget • Benchmarking results to CCSD • $1,237 per student vs. $223 per student • New Service Delivery Model • Site Facilitators + training of general ed teachers • Ultimately shift from strict staffing ratio model to needs based • Staffing may increase based on actual EL enrollments in 2018-19 16.3
Proposed Reductions in Instruction • GT Program • Total of 52 GT teachers • Reduction of 2 FTE equates to a 4% reduction • 1 FTE is a GT coordinator • 1 FTE based on reduced enrollment in SWAS • Depending on GT enrollment and based on adjusted State staffing guidelines, total GT staffing may increase or be flat in 2018-19. 16.4
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