SBUSD Budget Workshop Fall 2014-15

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Saturday, September 27
South Bay School Library (9-11AM)
Presented By:
Gary Storts, Superintendent
Johnna Emery, Business Manager
Lynette Kerr, Director of Fiscal Services at HCOE
To prepare today’s student to succeed in tomorrow’s world by doing the following:
•
Provide a safe, healthy and nurturing school environment
•
Teach the skills necessary to prepare students for success in high school and beyond
•
Instill in students a sense of personal and civic responsibility and global awareness
•
Provide students with problem solving skills to thrive in a technological world
•
Instill in students a desire to be lifelong learners
1.
Lynette Kerr – Director of Fiscal Services at HCOE
2.
Process and Budget Timelines
3.
SBUSD Budget – Past, Present and Future Projections
4.
Pressures on the Budget
 Building the SBUSD budget is a year around event, beginning in October with
enrollment projections, and ending the next October when the district and school
sites must have revised budgets. All activities are influenced by the CA budget
process, budget “pressures” which vary from year to year, and change in employee
compensation.
 October – December
 Enrollment projections for next school year are prepared
 Business Manager uses current enrollment data & trending information to predict ADA
 Business Manager provides best estimate of revenues
 Enrollment projections drive allocations
 1st Interim Report Due to HCOE
 January - February
 Start of State’s budget process
 Governor releases state budget document
 SBUSD gets first look at projected revenues (formal analysis)
 State legislature begins budget process
 March - May
 2nd Interim Report due to HCOE
 Governor’s Office issues “MAY Revise” – more accurate look at CA revenues
 District Office revises SBUSD budget
 CA Legislature continues budget discussion
 May – July
 Legislature continues budget discussion
 3rd Interim (if required)
 Constitutional deadline for CA Legislature to pass state budget bill
 Governor must sign or veto the CA budget bill within 12 days of legislative action
 Governor may use line-item veto to reduce or eliminate specific expenditures
 Target date for the governor to sign the CA budget is June 30 of each year
 SBUSD must pass budget by June 30 of each year – (CA Law)
 Final CA budget will inform SBUSD what revenues to expect for the next school year
 August
 45 Day Revise
•
Chart of Accounts
•
Trends over Time
•
Where are We Going?
 FUND – A self-balancing set of accounts, recording assets and liabilities.
(Examples: General Fund, Charter School Fund, and Cafeteria Fund)
 RESOURCE – “Where” did the money come from? Used to classify revenues &
expenditures in accordance with restrictions or special reporting requirements
placed on the LEA by law or regulation. (Examples: Lottery, Title I, Special
Education, Transportation, After School Education & Safety)
 GOAL – “Who” is the target audience? Define the broad purpose or objective(s) of
the expenditure. (Examples: Regular Education, Administration, Special Education,
Athletics)
 FUNCTION – “What” activities or services will be provided? Describes the
activities or services performed in order to accomplish the goal. Function refers to
activities performed to support one or more goals. (Examples: Instruction, School
Administration, Pupil Transportation, Maintenance)
 OBJECT – “What” specific good or service is being purchased? What specific
revenue is earned? This field applies to expenditures, revenues, and balance sheet
accounts including assets, liabilities, and fund balances. (Examples: Teacher
Salaries, Health & Welfare, Textbooks, Telephone Service, State Lottery Revenue)
 SCHOOL – Designates a specific physical school structure or group of structures
which form a campus. Refers to a physical location. (Examples: District, South Bay,
Pine Hill)
 MANAGEMENT – User defined code allows for internal tracking of expenses,
projects, etc. This district has assigned staff their own code to track $300 lottery
allowance. (Examples: Summer School, GATE, Playground, Pine Hill Portable)
 Revenues appear to be
growing.
Fund 01 Revenues
 07/08 = 3,981,731
 13/14 = 4,419,067
3,500,000.00
 14/15 = 4,487,605
3,000,000.00
 This is misleading.
2,500,000.00
 Includes fluctuating
2,000,000.00
1,500,000.00
1,000,000.00
500,000.00
-
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2,119,153.90
2,128,117.26
1,869,628.45
1,964,396.48
2,106,814.60
2,236,292.76
3,010,469.27
3,213,794.00
8100-8299
519,699.30
573,586.31
503,155.51
594,811.40
627,621.71
593,581.69
616,516.16
586,495.00
8300-8599
1,093,883.31
980,539.41
870,933.19
877,878.46
897,399.00
929,196.45
464,838.10
367,452.00
8600-8799
249,002.97
292,258.34
767,293.19
518,008.46
303,806.03
374,190.43
327,243.73
319,864.00
8010-8099
8010-8099
Revenue Limit
8100-8299
Federal Revenue
8300-8599
State Revenue
8600-8799
Local / Misc.
local revenues (fire
insurance, etc.)
 Doesn’t take into
consideration rising
ADA, staffing demands,
etc.
 Need to look at
Revenue/ADA
 Revenues per ADA were
highest in 2007/08.
Fund 01 – Revenue / ADA
 Bottomed out in 2009/10,
then started climbing.
12,000.00
 07/08 = 10,453
10,000.00
 09/10 = 8,412
 13/14 = 9,607
8,000.00
 14/15 = 9,409
6,000.00
8010-8099
8100-8299
4,000.00
8300-8599
2,000.00
-
8xxx
200708
200809
200910
201011
201112
201213
201314
201415
8010-8099 5,934. 5,484. 4,848. 5,112. 5,097. 5,108. 7,068. 7,255.
8100-8299 1,455. 1,478. 1,304. 1,547. 1,518. 1,355. 1,447. 1,324.
8300-8599 3,063. 2,527. 2,258. 2,284. 2,171. 2,122. 1,091. 829.56
8xxx
10,453 9,489. 8,412. 8,944. 8,787. 8,586. 9,607. 9,409.
 Still not back to 2007/08
levels per ADA, despite
increased expenses and
demands on schools.
 Does not include 86xx local
revenues. Local revenues
are not dependent on ADA,
and fluctuate from year to
year.
Charter School Revenue / ADA
Charter School Revenues
700,000.00
8,000.00
600,000.00
7,000.00
500,000.00
6,000.00
400,000.00
5,000.00
300,000.00
8010-8099
200,000.00
8100-8299
100,000.00
8300-8599
8600-8799
(100,000.00)
8xxx
2011-12
2012-13
2013-14
4,000.00
8100-8299
8100-8299
2,000.00
8300-8599
1,000.00
8xxx
-
2014-15
8010-8099 346,665.00 400,890.00 484,569.00 546,079.00
8010-8099
3,000.00
2011-12
2012-13
2013-14
2014-15
8010-8099
5,360.52
5,385.41
6,375.07
6,642.49
-
-
-
8100-8299
-
-
-
-
8300-8599 54,449.00
72,049.96
50,138.29
29,239.00
8300-8599
8600-8799
58,905.42
6,922.56
1,500.00
8xxx
8xxx
(27.57)
401,086.43 531,845.38 541,629.85 576,818.00
841.95
967.89
659.63
355.66
6,202.47
6,353.30
7,034.70
6,998.15
5xxx
9%
6xxx
2%
7xxx
2%
2007-08 Unaudited
Actuals
 Across General Fund,
certificated salaries
comprised 42% of the
budget.
 Classified salaries
4xxx
7%
1xxx
42%
3xxx
21%
1xxx
Certificated Salaries
2xxx
Classified Salaries
3xxx
Employee Benefits*
4xxx
Materials & Supplies
5xxx
Services
6xxx
Capital Improvements
7xxx
Other Outgo
comprised 17% of the
budget.
 Benefits comprised
21% of the budget.
 Total compensation =
80% leaving 20% for
materials and
services.
2xxx
17%
*Includes H&W, SUI, Workers’ Compensation, FICA, Medicare
6xxx
3%
 Across Operating
2013-14 Unaudited
Actuals
7xxx
6%
Funds 01 and 09
(General & Charter),
certificated salaries
comprised 35% of the
budget.
5xxx
11%
1xxx
35%
1xxx
2xxx
3xxx
4xxx
8%
4xxx
5xxx
6xxx
7xxx
 Classified salaries
comprised 18% of the
budget.
 Benefits comprised
19% of the budget.
 Total compensation =
3xxx
19%
2xxx
18%
72% leaving 28% for
materials and
services.
6xxx
7%
2014-15 Preliminary
7xxx
2%
5xxx
11%
1xxx
35%
09 (General & Charter)
certificated salaries
comprised 36% of the
budget.
 Classified salaries
1xxx
2xxx
3xxx
4xxx
8%
 Across Operating Funds 01 &
4xxx
5xxx
6xxx
7xxx
comprised 19% of the
budget.
 Benefits comprised 21% of
the budget.
 Total compensation = 76%
leaving 24% for materials
and services.
3xxx
19%
2xxx
18%
Expense Vs. Revenues – Fund 01
5,000,000.00
4,500,000.00
4,000,000.00
3,500,000.00
Year
Expenses
Revenue
Difference
2007/08
4,011,800
3,981,739
(33,061)
2008/09
3,758,860
3,974,501
215,642
2009/10
3,941,977
4,011,010
69,033
2010/11
3,896,814
3,955,095
58,281
2011/12
3,827,934
3,935,641
107,707
2012/13
4,026,904
4,133,261
106,358
2013/14
4,700,539
4,419,067
(281,472)
2014/15
4,710,558
4,487,605
(222,953)
3,000,000.00
2,500,000.00
2,000,000.00
1,500,000.00
1,000,000.00
8xxx
1xxx-7xxx
500,000.00
-
Expense Vs. Revenues – Fund 09
800,000.00
700,000.00
600,000.00
500,000.00
400,000.00
300,000.00
200,000.00
100,000.00
2011-12
2012-13
8xxx
2013-14
1xxx-7xxx
2014-15
Year
Expenses
Revenue
Difference
2011/12
376,535
401,086
24,552
2012/13
670,837
531,845
(138,991)
2013/14
614,377
541,630
(72,747)
2014/15
661,732
576,818
(84,914)
Reserve Level - % of Budget
Reserves – Budgeted Amount
Reserve %
18.00%
Reserves
900,000.00
16.46%
16.00%
822,724.42
800,000.00
13.73%
14.00%
12.88%
700,000.00
11.55%
12.00%
6.00%
443,186.08
406,965.40
400,000.00
339,472.04
287,408.72
300,000.00
4.00%
200,000.00
2.00%
100,000.00
10.00%
8.00%
0.00%
500,000.00
7.91%
6.76%
680,156.10
612,213.00
600,000.00
10.46%
9.53%
641,248.13
Rlevel
-
Reserves
Average Daily Attendance
 ADA drives funding as part of the LCFF
calculation.
450
 Many of our students are interdistrict
transfers.
400
350
 Charter enrollment is holding steady, but
300
will likely increase.
250
200
150
100
50
0
2007- 2008- 2009- 2010- 2011- 2012- 2013- 201408
09
10
11
12
13
14
15
ADACS
64.67 74.44 76.01 82.21
ADASB 357.09 388.02 385.58 384.26 413.29 437.80 425.92 442.95
ADACS
ADASB
 2014/15 saw influx of 4th grade.
 REVENUES – LCFF changed the funding formula, making it challenging to predict
how much to budget. CDE and DOF projections vary substantially (between $200k
and $300k per year).
 We will soon reach the 2007/08 funding level.
 EXPENSES – Total Compensation (salaries & benefits) comprise 76% of the
operating budget. This will continue to rise as STRS & PERS rates increase in the
future.
 In 2013/14 we substantially cut into our reserves by deficit spending in the amount
of $281,472 in the General Fund and $72,747 in the Charter Fund.
 In 2014/15 we anticipate deficit spending an additional $222,953 in the General
Fund and $84,914 in the Charter Fund.
 2016/17 is the last year of the Charter School Loan payment of $50,000 annually.
 RESERVES – Our reserves are currently 11.55% for the 2014/15 fiscal year. We are
required to maintain a 4% reserve.
 Current projections show a decrease of approximately 1% per year in our reserves
if we continue deficit spending at the current rate.
 ADA – We currently have a healthy attendance rate. The charter school is
averaging 97.38% attendance. Pine Hill is averaging 95.27% and South Bay is
averaging 96.88% attendance.
 If we maintain these rates, our revenues will increase. We budgeted for a lower
attendance rate.
 South Bay’s 4th grade class was unexpectedly large. This resulted in the need for a
4/5 combo class and a new teacher, which increased the certificated salary &
benefits budget.
 INTERIMS / BUDGET REVISION – It’s time to revise & update the budget for 1st
interim. It’s important to communicate any changes in funding, staffing,
expenditures, etc. as quickly as possible in order to update the budget and plan
accordingly.
 This includes anticipated multi-year changes.
Pressures on the budget vary from year to year for a variety
of factors, including:
 Increase in STRS & PERS Contributions
 Facility needs and updates – what cannot be covered under Prop 39
 PH Cafeteria Floor (Williams Compliance finding)
 Bus Barn (failing)
 SB Parking Lot (failing)
 Pine Hill Parking Lot Extension (safety)
 Painting – PH & SB (school climate)
 Plumbing (classroom 00 @ PH)
 Special Education (cost rising)
 Collective Bargaining
 Salaries + Health & Welfare = Total Compensation
 CA Rainy Day Fund
 Proposition 98 Reserve Cap
 NO more Common Core Implementation $ after 2014-15
 Proposition 30 (ends in 2018)
 Sales Tax expires 12/31/2016 = 0.25%
 Income Tax expires 12/31/2018 = 3% on top income earners
 Common causes of financial problems:
 Overly optimistic estimates of state economics
 Overly aggressive estimates of enrollment, attendance, and average daily attendance (ADA)
 Failure to document budget assumptions
 Loss of control of staffing levels and costs
 Underestimating “automatic” cost growth
 Use of one-time money for ongoing expenses
 Poor decisions at the negotiating table
 Failure to consider multiyear impact of budget decisions
 Failure to follow through on budget decisions
 Poor budget monitoring
 Chronic deficit spending
 Inadequate reserves
 Things are getting better, BUT funding is still less than 2007-08
 Local Control does NOT mean “no regulations”
 The Strategic Planning Process will help determine who we want to be, thus
dictating how we budget… so please show up – Oct. 18, 2014
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