Qualified Status for First Interim Report 2014-15

Report
2014-15 First Interim
Financial Report
Board of Education
December 9, 2014
The Board Approves the District’s First Interim Financial Report and
Resolution Reflecting the District’s Budget Status from July 1 through
October 31, 2014
December First Interim Submittal Out of Sync with January Timing for
Governor’s Budget Proposal
First Interim Must Be Based on Current Level Funding Assumptions
Education Code §42130 Requires Approval in a public session by
December 15, 2014
The Board is Also Certifying That the District’s Projected Financial Outlook
for 2014-15, 2015-16 and 2016-17 is One of the Following Certifications:
Positive– District Will Be Able to Meet Its Financial Obligations
Qualified– District May Not Be Able to Meet Its Financial Obligations
Negative– District Will Be Unable to Meet Its Financial Obligations
Staff Recommends No Change From Second Interim Status (2013-14)
Qualified Status for First Interim Report 2014-15
Due to insufficient information in December 2014 prior to Governor’s January
budget proposal
2
Why Qualified?
No Status Change Since Second Interim, 2013/14
December’s First Interim Submission out of sync with
January Timing for Governor’s Proposed Budget
“Sustainable Qualified”
Updated Deficit Projections by Staff will be prepared in
January
Implications of Remaining Qualified
Requires Third Interim Report to SDCOE only if not Positive
by Second Interim
SDCOE Advanced Review of all Bargaining Agreements
SDCOE Approves Requests for Short Term Lending (TRANs)
3
REVENUE ASSUMPTIONS
Description
2014/15
2015/16
2016/17
LCFF Funding Model
Funded ADA
COLA*
Funding Gap*
Grade Span Adjustment (GSA)
104,818
0.85%
29.56%
$(8.0) Mil
103,268
2.19%
20.68%
101,697
2.14%
25.48%
$8.0 Mil
$8.0 Mil
$8.0 Mil
$3.8 Mil
$7.1 Mil
$162/ADA
0.36%
$ 3.7 Mil
$ 3.7 Mil
$162/ADA
0.36%
$162/ADA
0.36%
$10.3 Mil
$10.3 Mil
$0.4 Mil
$0.4 Mil
Federal : Impact Aid
Other State
Mandated Cost Reimbursement
Mandated Cost Reimbursement (one-time)
Lottery* (GFU- $128; GFR- $34)
Local : Interest
Transfers In
Redevelopment Agency (RDA)
Sale of Property
Vision
Retiree
$10.3 Mil
$28.4 Mil
$1.4 Mil
$0.4 Mil
* San Diego County Office of Education (SDCOE) and School Services of California (SSC)
4
EXPENSE ASSUMPTIONS
Description
Salaries
Step and Column: Cert / Class
Restoration:
Cert Non-Mgmt / Cert Mgmt / Class*
Reinstate Furlough Days: Cert/Class*
STRS
PERS
Health & Welfare Premiums
Materials & Supplies ( Consumer Price Index- CPI )
Contracted Services (CPI)
Utilities
Implemented Board Solutions/Budget Deficit
Transfers Out
Liability Insurance
Property Insurance
Child Development
Retiree
Contributions
Special Education
Restricted Routine Maintenance (RRM)
Community Day School
Transportation
* Subject to change based on negotiation
2014/15
2015/16
2016/17
1.79% / .65%
2.06% / .65%
2.06% / .65%
5% / 2% / 0%
.54% / 0%
8.88%
11.77%
0% / 0% / 0%
0% / 0%
10.73%
12.60%
0% / 0% / 0%
0% / 0%
12.58%
15.00%
7.00%
2.10%
2.10%
5.00%
$106.4 Mil
7.00%
2.30%
2.30%
5.00%
$81.4 Mil
7.00%
2.50%
2.50%
2.00%
$88.1 Mil
$3.5 Mil
$3.3 Mil
$3.5 Mil
$0.6 Mil
$3.5 Mil
$3.3 Mil
$2.0 Mil
$0.6 Mil
$3.5 Mil
$3.3 Mil
$2.0 Mil
$0.6 Mil
$191.8 Mil
$27.8 Mil
$1.8 Mil
$10.1 Mil
$193.2 Mil
$36.4 Mil
$2.0 Mil
$10.2 Mil
$196.2 Mil
$36.4 Mil
$2.1 Mil
$10.3 Mil
5
Description
2014/15
2015/16
2016/17
Economic Uncertainties- 2%
Unexpended Set-Asides and Reserves:
Mandates
School designated contributions
Stores Inventory
Prepaid Expenses
Revolving Cash Funds
Subtotal
$24.0 Mil
$23.4 Mil
$23.7 Mil
$7.1 Mil
$4.5 Mil
$1.7 Mil
$0.9 Mil
$0.06 Mil
$38.26 Mil
$0 Mil
$4.5 Mil
$1.7 Mil
$0.9 Mil
$0.06 Mil
$30.57 Mil
$0 Mil
$4.5 Mil
$1.7 Mil
$0.9 Mil
$0.06 Mil
$30.86 Mil
6
* Projected
Fiscal Year
SDUSD
Average
ADA
% Change
Year Over
Year
2008-09
111,862
2009-10
110,836
(.92)%
2010-11
110,347
(.44)%
2011-12
109,241
(1.00)%
2012-13
107,486
(1.61)%
2013-14
106,110
(1.28)%
2014-15*
104,818
(1.22)%
2015-16*
103,268
(1.48)%
2016-17*
101,697
(1.52)%
7
Supplemental and Concentration Grants
High-need eligible students
Low Income
English Learners
Foster Youth
Unduplicated Percentage
Variable in the funding formula
Current value is 62.5%
Alternative family income surveys essential to
receive funding
Data submittal to State due December 12
8
Local Control Funding Formula requires school districts
to make progress toward maintaining an average class
enrollment of no more than 24 students for each
school site in K-3 grades, unless a collectively
bargained alternative annual average is agreed to by
the school district
Individualized for each elementary school
Dependent on State funding
Can be changed based on a negotiated agreement
with the teachers’ bargaining unit
Risk of $8 million penalty included in First Interim
assumptions
9
Governor’s Approved Budget
$400.5 million towards funding of prior mandate
claims on per average daily attendance basis
Can be used for one-time purposes
District entitled to $7.1 million
Reflected in reserves for 2014-15 for purposes of 2015-16 deficit
The State Controller will apply amounts against any balances of
unpaid claims for reimbursement of state-mandated local
programs in chronological order beginning with the earliest claim
State Controller to pay in two installments
90% November
10% March
Continued Advocacy for 2015-16 Budget
Current Balance due to the District is: $68.6 million
10
ORIGINAL
BUDGET
(millions)
GROSS REVENUE
(millions)
NET REVENUE
(millions)
OVERAGE
(millions)
CLOSE
DATE
Bay Terraces #11
$2.40
$2.70
$2.70
$0.30
Nov. 3 2014
Camp Elliott #3
$2.70
($2.70)
N/A
Stevenson Elementary
2013/14 Carryover Budget Solutions
2014/15 New Sales
$8.60
$13.70
Dec. 15, 2014
Benchley
TBD
Cleveland
TBD
Real Estates Sales
$7.30
FY 2014-15 ANTICIPATED REVENUE
$21.00
2013/14 Carryover Budget Solutions
Board Action Not To Sell Property
$13.20
$15.90
$13.10
$15.80
$4.60
$2.20
$15.90
$15.80
$2.20
According to Education Code 17462, the property sale proceeds have been utilized to offset
an operational deficit for fiscal year 2014-15 and will not result in ongoing expenditures.
11
Monthly Board Items
Launch First Learning Cycle
Safe and Well Maintained Facilities
Physical Environments
Social Environments
Broad & Challenging Curriculum
Quality Leadership Quality PD
Supportive Environments that Value Diversity
Advisory Meetings
DAC, DELAC, AAAE, LAC, CAC (SpEd), CAC (SDEA), GATE DAC,
ASB President’s Council, CSEA/ POA Monthly Mtg, PTA Exec
Bd, Panasonic Foundation, LCAP Large Group, LCAP Metrics
School Cluster Conversations
12
Redirecting current resources to the
classroom
TK-3 Class Size Allocation
High School Counselors
Common Calendar
Common Core Supports
School Site Specialty Programs (Biliteracy,
International Baccalaureate)
13
2014/15
DESCRIPTION
-1-
PROJECTIONS
-2-
2015/16
2016/17
PROJECTIONS PROJECTIONS
-3-4-
Beginning Balance
$95,981,513
$50,528,351
$30,573,659
Revenues
893,387,872
920,669,364
953,227,001
Expenditures
Budget Deficit Solutions 2015/16
Budget Deficit Solutions 2016/17
TOTAL EXPENDITURES
(736,905,382)
(781,455,660)
81,360,944
(797,327,679)
(736,905,382)
(700,094,716)
88,119,724
(709,207,955)
Other Sources / Uses
(201,935,652)
(240,529,340)
(243,727,046)
30,573,659
$30,865,659
Ending Balance
SURPLUS/(DEFICIT)
$
50,528,351
$
($45,453,162)
(19,954,692)
Required Reserves
Economic Uncertainties
Unexpended Balances / Set Aside
School Site Ending Balances
Stores
Prepaid Expenses
Revolving Cash
$24,019,000
11,660,631
1,674,228
850,000
57,800
$23,431,000
4,560,631
1,674,228
850,000
57,800
$23,723,000
4,560,631
1,674,228
850,000
57,800
Total Required Reserve
$38,261,659
$30,573,659
$30,865,659
Reserve (Shortfall) / Surplus
$12,266,692
$0
$0
Multi-Year Projection involves hybrid approach to include 2015-16 deficit solutions
292,000
14
2015-16 Potential Budget Solution Category
Mandates
Solutions in $ Millions
$(19.2)
Grant Development
$(9.0)
Strategic Staffing – Position Review
$(3.0)
Increase High School Enrollment
$(3.1)
Early Childhood Enrollment
$(2.5)
Concentrated Effort with Unduplicated Counts
$(1.6)
Central Office Program Adjustments
$(2.0)
Protection Fund Against Layoff/ Program Cuts
Program Adjustments/ Operational Adjustments
Total Potential Deficit
$0.3
$(41.3)
$(81.4)M
15
Fund
01
11
12
13
14
15
20
21
25
35
40
51
67
Total
Fund Description
General Fund
$
Adult Education
Child Development
Cafeteria Special Revenue
Deferred Maintenance
Pupil Transportation Equipment
Special Reserve - Retiree Benefits
Building Fund
Capital Facilities Fund
County School Facilities Fund
Special Reserve - Capital Projects
Bond Interest & Redemption
Self Insurance Fund
$
Beginning
Trans In/
Balance
Revenue
Expenses
(Trans Out)
Ending Balance
126,616,646 $ 1,095,456,032 $ (1,189,889,469) $ 29,544,611 $
61,727,820
225,753
648,600
(633,230)
241,123
15,273
20,791,663
(26,046,141)
5,254,476
15,271
2,960,704
62,992,553
(63,266,242)
2,687,015
180,859
640
181,499
478,470
583,300
(91,163)
970,607
1,618,803
3,855
177,456
1,800,114
477,284,219
1,308,300
(231,931,215)
246,661,304
40,116,507
30,093,882
(21,507,182) (12,000,000)
36,703,207
92,563,283
2,212,701
(9,308,073)
85,467,911
9,896,987
26,462,843
(3,530,620) (28,431,543)
4,397,667
232,399,201
158,634,438
(155,091,549)
235,942,090
75,734,614
24,311,567
(24,081,493)
5,455,000
81,419,688
1,060,091,319 $ 1,423,500,374 $ (1,725,376,377) $
$
758,215,316
16
General Fund Unrestricted- Continue to monitor Real Estate Sales and Attrition savings to avoid
exceeding budget and creating negative cash balance. Need to ensure correct identification of Free and
Reduced, Foster and English Learner students to avoid potential loss of revenue of LCFF
implementation. ROP funding shortfall from County could create local contribution from Unrestricted
Reserves
General Fund Restricted- Continue to monitor Federal Sequestration to avoid exceeding budget and
creating local contribution from General Fund Unrestricted. Potential funding concerns with ROP
apportionments. Potential further Sequestration remains a risk for federal funding in 2015/16.
Continued Resolution
Omnibus Bill
Child Development Fund 12- Potential General Fund Unrestricted Local Contribution due to decline in
enrollment, excess staffing due to no layoffs and contract compliance
Cafeteria Fund 13- Ongoing discussions with CDE, State Auditor and Federal representatives, regarding
Audit Findings
State School Facilities Fund 35- Need to sustain Ending Fund Balance for loans to GFU for cash flow
needs and source for TRANS alternative liquidity
Property Management Fund 40- Continue to monitor expenditures to avoid negative fund balance
17
$225.0
$200.0
$175.0
$150.0
Millions
$125.0
$100.0
$75.0
$50.0
Monthly
Payroll
$25.0
$Actual
Projected
JUL
AUG
SEPT
OCT
$74.61 $50.83 $98.22 $95.04
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
$73.82 $220.42 $199.26 $162.01 $153.36 $140.60 $133.99 $92.39
April and May deferrals eliminated. June deferred.
18
Passed by voters on November 4, 2014
Amended State Constitution on rules for the Budget
Stabilization Act, known as the state Rainy Day Fund, and
created a new state reserve for schools known as the Public
School System Stabilization Account
New rules define how State pays down debt and saves money in
reserves
Senate Bill 858, Section 27, as part of state budget, became
operational when Proposition 2 passed. SB 858 establishes
maximum budget reserves for school districts, including caps on
the combined assigned and unassigned ending fund balance
Upon the first deposit to the State Public School System
Stabilization Account , the district’s maximum reserve would
be capped at 4%
19
Step
Task
Date
1
Monthly LCAP Presentations and Community Advisory
Meetings
September 2014 – June
2015
2
Board Approval of First Interim Report- BOARD ACTION
Dec 9, 2014
3
Vision 2020/ LCAP Planning
Dec 2014 – Jan 2015
(finalize priorities with LCAP Planning Team)
4
Governor’s Proposed Budget Released
mid-January
5
Superintendent Report on 2015/16 Budget Solutions
Adjustments
Jan 20, 2015
6
Release of SBB Budget Workbooks
Feb 2015
7
Board Approval of 2nd Interim ReportBOARD ACTION
Mar 15, 2015
8
Board Approval of 3rd Interim ReportBOARD ACTION
May 15, 2015
9
Board Adoption of 2014/15 Budget and LCAP-BOARD
ACTION
June 30, 2015
20
December First Interim Submittal Out of Sync with January
Timing for Governor’s Budget Proposal
First Interim Must Be Based on Current Level Funding Assumptions
Staff Will Update Deficit Projections Immediately After January
Budget proposal
Detailed 2015-16 Budget Solutions List to be Presented to the Board in
Mid-late January
Tight Timeline For Budget Development: January – February
Stakeholder Communications
Solutions Implementation Decisions to Board in late January
More Centralized Budget Preparation for School Sites
21
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