Evergreen School District
Budget Advisory Committee
January 21, 2015
January 21, 2015 BAC
1
What We’ll Cover
•
•
•
•
•
Review of Budget Cycle
Local Control Funding Formula (LCFF) Overview
Demographer’s Report - Enrollment
Governor’s January Budget Proposal
Implications for Education and for Evergreen School District
January 21, 2015 BAC
2
Governor's
January Budget
Proposal
First Interim Report
(December)
District begins
to develop its
budget
Community meetings to gather
input on community's priorities
District Budget revised
(within 45 days of State
adopted budget)
Second Interim Report
Budget Cycle
(March)
Board work session to share
community feedback and
establish board budget
priorities
State adopts budget
(by June)
Governing Board adopts budget
(by June 15)
District
refines its
budget
End of Year Report – if not a Positive Second
Interim Report
Governor's May
Revise
January 21, 2015 BAC
3
Goals of the LCFF and Its Implementation
No district receives less than 2012-13
Funding restored to pre-recession 2007-08 levels
Core funding equalized
Equity – more services for higher needs
Full implementation by 2020-21
Source: School Services of California, Inc.
January 21, 2015 BAC
4
Source: EdSource Local Funding Formula
January 21, 2015 BAC
5
Before: Rule Based – Now: Outcome Based
• Under the LCFF model
– Accountability for the use of funds tied to eight areas of state priority
– Accountability is linked to a locally developed plan, the Local Control
Accountability Plan (LCAP), designed to achieve identified goals
– Planning process is intended to be transparent and engage the school
community
– The district budget is explicitly linked to LCAP goals and activities
– Annual review of progress and update of the LCAP is required
• Funds are not restricted in the categorical program sense, but
– Funds generated by eligible students are intended to be used to
improve and increase services for those students
– Accountability for demonstrating how funds are used to support
student needs is explicitly required as part of the LCAP
January 21, 2015 BAC
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Demographer’s Report – January 8, 2015 Board Presentation
Table 1 (PowerPoint version): Actual and Projected Students by Grade and Grade Level, 2014 to 2024
Early
Oct. of
TK
Actual and Projected Total Enrollment by Grade
(including SDC in TK-8 but excluding NPS students)
K
1
2
3
4
5
6
7
8
Actual and Projected Total
Enrollment by Grade Group
TK-6
7-8
TK-8
2014
297 1,016 1,196 1,316 1,413 1,480 1,526 1,594 1,506 1,517
9,838
3,023
12,861
2015
2016
270 1,080 1,075 1,216 1,343 1,423 1,491 1,538 1,577 1,523
257 1,029 1,144 1,096 1,243 1,355 1,439 1,505 1,526 1,597
9,436
9,068
3,100
3,123
12,536
12,191
2017
2018
277 1,107 1,094 1,171 1,124 1,258 1,373 1,455 1,495 1,547
282 1,128 1,176 1,119 1,200 1,138 1,276 1,389 1,446 1,516
8,859
8,708
3,042
2,962
11,901
11,670
2019
286 1,143 1,194 1,199 1,144 1,211 1,151 1,288 1,379 1,464
8,616
2,843
11,459
2021
2024
290 1,161 1,213 1,228 1,239 1,232 1,165 1,234 1,152 1,293
301 1,202 1,257 1,259 1,271 1,267 1,273 1,271 1,242 1,177
8,762
9,101
2,445
2,419
11,207
11,520
-402
-770
-979
77
100
19
-325
-670
-960
-1,130
-1,222
-61
-180
-1,191
-1,402
-738
-604
-1,342
Total Grade-Level Change in One Year, to October of 2015
Total Grade-Level Change in Two Years, to October of 2016
Total Grade-Level Change in Three Years, to October of 2017
Total Grade-Level Change in Four Years, to October of 2018
Total Grade-Level Change in Five Years, to October of 2019
Total Grade-Level Change in Ten Years, to October of 2024
Note: Potential short-term deviations from the forecast numbers in TK and K are much greater than usual due to
severely divergent findings. The current K enrollment, if it covered a 12-month rather than 11-month period,
probably would have over 1,100 students. Local zip code birth data for the ESD vicinity, when correlated forward
by five years to the potential TK and K enrollments, indicate a dramatic decline in the pending TK and K amounts
compared to that over-1,100 figure. For October 2015, applying only that correlative data and ignoring all other
findings could have justified a K expectation of around 1,000 students, with even lower 2016 and 2017 amounts.
January 21, 2015 BAC
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Enrollment and Average Daily Attendance
• Enrollment is the total number of students enrolled in
the District
January 21, 2015 BAC
• Average Daily Attendance (ADA) is equal to the average
number of pupils actually attending classes
• ADA drives a district's primary source of general
purpose funding – its LCFF funding
• Attendance is counted every day of the school year
– LCFF funding, however, is based on attendance through
the P-2. P-2 is attendance through the last school month
ending on or before April 15 of a school year.
January 21, 2015 BAC
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ADA – Declining Enrollment
January 21, 2015 BAC
• A drop in ADA will result in a decrease of district LCFF
funding, similar to funding under revenue limits
• However, the state provides limited protection from
revenue losses related to declining enrollment – a
district is funded on the greater of current-year or
prior-year ADA
– The protection provides a revenue floor in the
current year for declining enrollment districts
– For declining enrollment districts, the current-year
ADA will determine next year's revenues
January 21, 2015 BAC
9
Themes for the 2015-16 Governor’s Budget
• Positive economic growth continues and fuels public
education spending
• Proposition 98 continues to receive most of the new money
• Governor stays the course on the Local Control Funding
Formula (LCFF) and the Local Control and Accountability
Plan (LCAP)
• The Wall of Debt continues to come down and is replaced
with the Rainy Day Fund
• Overall, a very good State Budget for public education
January 21, 2015 BAC
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Discretionary Funds
• The Governor’s State Budget proposal provides more
than $1.1 billion in discretionary one-time Proposition 98
funds, including $20 million for COEs
– The allocation amounts to about $180 per ADA for districts
• The Governor suggests the one-time funds may be used
to further investments in the implementation of
Common Core State Standards (CCSS)
• Other uses detailed in the proposal are:
– To support the implementation of newly adopted English
language development and California’s Next Generation
Science standards, and
– To support expenditures that occur due to the evolving
accountability structure of the LCFF
January 21, 2015 BAC
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2015-16 Local Control Funding Formula
• Budget proposes $4 billion for continued implementation of
the LCFF
• New funding is estimated to close the gap between 2014-15
funding levels and LCFF full implementation targets by
32.19%
• When combined with 2013-14 and 2014-15 LCFF funding,
implementation progress would cover almost 58% of the gap
in just three years
• Individual district experiences will vary
January 21, 2015 BAC
January 21, 2015 BAC
12
2015-16 LCFF Funding Factors
• Cost-of-living adjustment (COLA): The K-12 COLA is
1.58% for 2015-16, and is applied to the LCFF base
grants for each grade span
Grade Span
2014-15 Base
Grant per ADA
1.58% COLA
2015-16 Base
Grant per ADA
K-3
$7,011
$111
$7,122
4-6
$7,116
$112
$7,228
7-8
$7,328
$116
$7,444
January 21, 2015 BAC
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2015-16 LCFF Funding Factors
• Grade span adjustment is applied as percentage
increases against the adjusted base grants, and also
receives a 1.58% COLA in 2015-16
January 21, 2015 BAC
– Grade K-3 – 10.4% increase for smaller average class
enrollments
Grade Span
2015-16 Base
Grant per ADA
Grade Span
Adjustment
2015-16 Adjusted
Grants
K-3 (10.4%)
$7,122
$741
$7,863
4-6
$7,228
--
$7,228
7-8
$7,444
--
$7,444
January 21, 2015 BAC
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What Does the LCFF Mean for Evergreen School District ?
1st Interim January 2015
1st Interim January 2015
1st Interim January 2015
Projection Projection Difference Projection Projection Difference Projection Projection Difference
COLA
2014-15
2015-16
2016-17
0.85%
2.19%
2.14%
0.85%
1.58%
2.10%
Funding GAP
0.00%
-0.61%
-0.04%
District ADA
2014-15
2015-16
2016-17
29.56%
20.68%
25.48%
29.15%
32.19%
11.00%
District Enrollment
-0.41%
11.51%
-14.48%
% of Attendance
12,873
12,624
12,396
12,850
12,536
12,191
(23)
(88)
(205)
Special ED Student at County ADA
12,564
12,514
(50)
97.60% 97.39% -0.21%
108
108
12,321
12,223
(98)
97.60% 97.50% -0.10%
108
108
12,099 Note:
11,886
(213) the 97.60%
97.50%Simulator
-0.11% to generate
108
108
Please use
SSC LCFF
0
0
0
your district’s
to insert
in the tableTotal
above.
LCFF Supplemental
Grant unique
Funding numbers
LCFF Entitlement
PER ADA
LCFF Revenue
2014-15 $5,657,797
2015-16 $6,174,015
2016-17 $6,662,145
$5,717,528
$6,550,264
$6,733,902
Discretionary Funds - One Time
$59,731
$376,249
$71,757
$6,757
$7,093
$7,459
$6,755
$7,259
$7,408
($2)
$166
($51)
$87,571,196 $87,540,256 ($30,940)
$89,884,405 $91,628,368 $1,743,963
$92,703,322 $91,349,340 ($1,353,982)
$180 (one-time) X 2014-15 P-2 ADA
$2,252,520
January 21, 2015 BAC
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CalSTRS Rate Increases
• Employer rates are
increasing to 10.73% in
2015-16, up from 8.88% in
2014-15
Year
PrePEPRA*
Employer Employees
PostPEPRA*
Employees
– No specific funds are
provided for this cost
increase
2014-15
8.88%
8.15%
8.15%
2015-16
10.73%
9.20%
8.56%
• Once the statutory rates
are achieved, CalSTRS will
have the authority to
marginally increase or
decrease the employer
and state contribution
rates
2016-17
12.58%
10.25%
9.205%
2017-18
14.43%
10.25%
9.205%
2018-19
16.28%
10.25%
9.205%
2019-20
18.13%
10.25%
9.205%
2020-21
19.10%
10.25%
9.205%
*Public Employees’ Pension Reform Act
Source: School Services of California, Inc.
January 21, 2015 BAC
16
CalPERS Rate Increases
• The employer contribution to CalPERS is projected to increase from
11.771% in 2014-15 to 12.6% in 2015-16 (final rate awaiting CalPERS
Board approval)
– “Classic” members continue to pay 7.00%
– New members pay 6.00%, which may fluctuate from year to year
based on the PEPRA requirement to pay half the normal cost rate
• Estimates of the projected future contribution rate increases for
school employers are as follows:
Actual
Projected
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
11.771%
12.6%
15.0%
16.6%
18.2%
19.9%
20.4%
Source: School Services of California, Inc.
January 21, 2015 BAC
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The “Promise” of a Return to
2007-08 Purchasing Power
• When promoting the LCFF, the Governor promised a
return to 2007-08 purchasing power
• In most cases, the LCFF base grant will need to cover
increased operating expenses, including the
employer’s share of CalSTRS and CalPERS increases
• Increasing costs such as CalSTRS and CalPERS erode
that promise and make it difficult for districts to
achieve the goals of the LCFF
January 21, 2015 BAC
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Next Steps
• State level
– Budget committee hearings
– Next update – May Revision
• Local level
– Second Interim Report due by March 17, 2015 for
school districts. Evergreen School District
scheduled for Board approval on March 12, 2015.
January 21, 2015 BAC
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