Grossmont Union High School District June 15, 2017 · The Budget Process Timeline FY 2017/18 Governor’s May Revision Overview FY 2017/18 District General Fund Budget Highlights

Grossmont Union High School District June 15, 2017

The Budget Process Timeline

FY 2017/18 Governor’s May Revision Overview

FY 2017/18 District General Fund Budget

◦ Highlights

◦ Deficit Resolution

◦ Revenue & Expenditure Summaries

◦ Key Assumptions

Conclusion

Appendix

2017/18 BUDGET ADOPTION PREVIEW – June 15, 2017

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2


3

State January—Governor’s Proposal February through May—Legislature Deliberation May—Revision ◦ June—Legislature Adopts Budget

District December—First Interim January/February—Review Governor’s Proposal February through May—Budget Development March—Second Interim May—Review May Revision & Reconcile Figures ◦ June—Board Adopts LCAP and Then Budget

Ongoing


2

Themes Governor continues to warn of impending economic slowdown

In preparation, Governor is: ◦ Building a substantial reserve ◦ Avoiding new ongoing commitments ◦ Paying down debt ◦ Downsizing some governmental operations ◦ Seeking new revenue sources

In fact, State revenues are trending slightly below the forecast through April


5


6

$100.0

$105.0

$110.0

$115.0

$120.0

$125.0

$130.0

2015-16 2016-17 2017-18

$115

.5

$118

.8 $124

.0

$115

.7 $118

.5

$125

.9 (in billions)

2017-18 JanuaryBudget

2017-18 MayRevision


7

4.40%

3.30%

5.50%

3.10%

3.20% 3.50%

0.0%1.0%2.0%3.0%4.0%5.0%6.0%

2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

Personal Income, Sales, and Corporation Tax Revenue (Percent Change)

January Proposal May Revision

LCFF Gap Funding 23.57% 43.97% or or $744 million $1.4 billion Prop 98 Minimum Funding Guarantee $73.5 billion $74.6 billion COLA 1.48% 1.56% One-Time Funds $287 million $1.01 billion* $48/ADA $170/ADA* *MAJOR CATCH—Funds not received until May 2019!!


8

Governor proposes to suspend Prop 98 Test 3B beginning in 2018/19 through 2020/21

Test 3B requires Prop 98 spending increases to be no less than non-Prop 98 spending increases

Totals about $900 million for 2018/19 through 2020/21

Suspended payments would accrue in the maintenance factor


9


10

Current Law

2017-18 2018-19 2019-20 2020-21 2021-22

Proposition 98

May Revision

Current May Revision Proposal Test 3 B

FY 2017/18 represents Year Five in the Local Control Funding Formula (LCFF) implementation

Elements: ◦ Base Grant

◦ Supplemental Grant (F&RL, ELL, and Foster Youth) Students (20% of Base Grant)

◦ Concentration Grant for >55% (50% of Base Grant)

◦ Grade Span Adjustment/ADA (CTE)

◦ Multi-year phase in with “GAP” funding


11


12

0%10%20%30%40%50%60%70%80%90%

100%

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21Actual Projected

2017-18 May Revision: 93% cumulative gap closure; 97% of full implementation

Full LCFF Implementation

What’s Not in the Budget No funding for or consideration of lowered purchasing

power due to STRS and PERS rate increases

No new funding for Special Ed to address inequities of current funding levels among SELPAs in state highlighted in PPIC and California Special Education task force reports

No additional funding for CTE ◦ Final installment of the three-year $200 million program in

2017/18 ◦ AB 445 proposes three additional years—In suspense


13

STRS Rate Increases GUHSD Cost Above Historical 13/14 Baseline Rate of 8.25%

GUHSD Cost $M

14/15 Increase

15/16 Increase

16/17 Increase

14


0

1

2

3

4

5

6

7

14/15 15/16 16/17 17/18

17/18 Increase

12.58%

8.88%

10.73%

$4.7

$2.8

$.9

$1.2

$1.9

14.43%

$1.9

$5.9

PERS Rate Increases GUHSD Cost Above Historical 13/14 Baseline Rate of 11.442%

GUHSD Cost $M

15


0

0.5

1

1.5

2

2.5

14/15 15/16 16/17 17/18

11.777%

11.847%

13.888%

15.531%

$.9

$.5

$.3 $.3

$.6

$1.5

$2.0

14/15 Increase

15/16 Increase

16/17 Increase

17/18 Increase


2

Final year of Future Forward Implementation

Year 1 Year 2 Year 3 2015/16 2017/18 2017/18

El Cajon Valley Granite Hills El Capitan Grossmont Monte Vista Santana West Hills Mt. Miguel IDEA/Chap Valhalla

Class Size Increase minimized to 36.3:1 (Original scenarios as high as 37:1)


17

New solar energy installations, projected to save $700K/year, coming online next year at:

◦ El Cajon Valley ◦ Granite Hills ◦ Monte Vista ◦ Mt. Miguel ◦ Santana ◦ West Hills

(Note: Also assisting with installations at Helix and Steele Canyon Charter High Schools)

Additional Green Charge Batteries planned (El Capitan and Grossmont High Schools) to save $20K/year


18

Deficit of <$11.1M> projected at February Board Budget Workshop after Governor’s January Budget Proposal

Governor’s May Revise slightly improved revenue picture: Deficit updated to <$10.3M>

Based on Guiding Principles reviewed at February workshop, a blend of ongoing and one-time budget solutions have been identified to resolve the <$10.3M> budget deficit


19

166

168

170

172

174

176

178

180

182

184

2016/17 Adopted Budget 2017/18 Based on May Revise Before Budget Actions

Revenue Expenditures

$171.7

$182.0

$172.5

$173.7 +$1.2

2016/17 Adopted Budget vs. 2017/18 Based on May Revise Before Budget Actions Unrestricted General Fund ($M)

<$10.3>

Surplus

Deficit


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Revenue Changes Expenditure Changes

LCFF $ 2.3 Salary Increase $2.5 Unduplicated Pupil Count < .9> STRS & PERS Increase 1.7 Reduction H&W Increase .9 One-time $/ADA 2016/17 <3.7> Step & Column 2.0 Other .3 Special Ed. Increase 1.7 Hourly Rate Increase .1 (Minimum Wage) EL Program Increase .6

Total <$2.0M> Total $ 9.5M

Net Changes <$11.5M>

Revenue & Expenditure Changes 2016/17 Adopted Budget to 2017/18 Based on May Revise Before Budget Actions

($M)


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Budget Guiding Principles

Maintain safe learning environments on all our campuses

Maintain access to rigorous educational programming

Maintain the District core initiatives such as Future Forward and College and Career Readiness Skill Building

Maintain reserve for Economic Uncertainties at 4.5% or greater

Maintain Restricted Maintenance Account as required by law

Fiscal restraint on current spending and aggressive pursuit of revenue enhancements

All necessary budget reductions that affect people will be handed with the utmost sensitivity to employees


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$M

Deficit projected at February Workshop <$11.1> based on Governor’s January Proposal

Changes based on Governor’s May Revise

◦ LCFF Gap Closure Increase 1.6

◦ Loss of one-time funding moved to May 2019 < .8>

Revised deficit projection before district actions <$10.3>

District Actions to resolve FY 2017/18 deficit:

◦ Ongoing $ 5.85

◦ One-Time 4.45

Total $10.3


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Potential Solution Ideas by Tier—February Workshop --Implemented

Ideas Tier I Tier II Tier III Admin Work Calendars X Certificated Teacher Staffing Allocation Reduction X Classified Reductions X Counselor Ratios X CTE General Fund Contribution Reduction (Use carryover) X

Deferred Maintenance Contributions X District Office Cuts X Employee Benefits Contribution Changes X Fund Shifts X Furlough Days X Hiring Freeze X Infinite Campus Support X Out-of-Home Care Reserves X


Mgrs Only

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Potential Solution Ideas by Tier --Implemented

Ideas Tier I Tier II Tier III Over-formula Teachers X Release Period Reductions X Salary Rollbacks X School Calendar Back to Late Start X School Resource Officers X Site Discretionary Dollar Cuts X Special Education Program Savings X Supplemental Instruction/Summer School X Targeted Program Reductions X Utilities Savings X


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$M Action Ongoing One-Time Total

CTE Program—Reduced GF Support $ .40 $2.40 $2.80 Deferred Maintenance Contribution Reduction .73 .73 District Office Cuts .61 .37 .98 Funding Shifts .20 .55 .75 Furlough Day—Management Only .06 .06 Over Formula Teachers Reduction .41 .41 Targeted Program Reductions 1.79 1.79 Special Education Cuts 1.16 1.16 Site Dollar Allocation Reductions .38 .38 Teacher Staffing Allocation (From 36:1 to 36.3:1) .44 .44 SDG&E Rebates .40 .40 Utility Budget Savings .40 .40 Total $5.85 $4.45 $10.30


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Revenue Unrestricted Restricted Total LCFF Total $159.6 $ .9 $160.5

All Other 12.1 35.4 47.5 Contribution < 43.1> 43.1 --

Total 128.6 79.4 208.0 Expenditures 128.6 80.6 209.2

Surplus/<Deficit> $ 0.0 <$1.2> <$1.2>

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ADA 15,853.82

CALCULATE LCFF TARGET Per ADA GUHSD Factors Per ADA GUHSD $

Base $8,712 100% $8,712 $138,118,480

Gr Span (CTE) $227 100% $227 $3,598,817

Supplemental $1,788 59.02% $1,055 $16,728,310

Concentration $4,470 4.02 % $180 $

Total $10,174 $2,848,518

Targeted Instructional Improvement $ 85 $1,340,391

Transportation $ 100 $1,591,957

LOCAL CONTROL FUNDING FORMULA (LCFF) TARGET $10,359 $164,226,473

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100

110

120

130

140

150

160

170

16/17 LCFF Entitlement

16/17 Adjusted for

Declining Enrollment

17/18 Target

Funding

17/18 LCFF Entitlement

The “GAP” (100%) $7.4M

$164.2

$158.2 $156.8

$159.6 43.97% Funded

$1.4M

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137

142

147

152

157

162

$158.2 $161.0 $159.6

Loss of 141 ADA

17/18 16/17 If No ADA

Decline

+ $2.8 $/ADA <$1.4>

ADA Loss

+ $1.4M

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Revenue

Expense

174.8

181.2

202.7

196.3 198.8

200

205

210

215

220

2017/18 2018/19 2019/20

208.0 209.2

213.0

217.7 217.1

225.1

Deficit <4.7>

Deficit <$1.2>

Deficit <8.0>

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LCFF “GAP” Funding of 43.97% F&RL, ELL & Foster Youth Unduplicated Count at 59.02%

(three-year rolling average) STRS District Contribution Increase of 1.643% (13.888 to 15.531%) PERS District Contribution Increase of 1.85% (12.58 to 14.43%) Student Enrollment Decline of <119> ADA Decline = <110> Health & Welfare Cost Increase of 5.35% for CY 2018

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20,2

85

20,2

51

20,2

02

20,1

28

19,9

14

20,0

37

20,1

71

19,6

65

19,0

20

18,3

71

17,9

59

17,5

65

17,2

23

17,0

29

16,9

10 17

,388

17,2

84

17,2

21

17,2

77

17,3

30

17,3

60

17,4

11

17,4

49

17,4

96

16000

16500

17000

17500

18000

18500

19000

19500

20000

20500

21000

Enrollment @ 3rd Week Long-Term Projection Model

Projection


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Reserves at Year End

Actual Projected

4.5%

% of General

Fund

Board Policy Minimum = 4.5%


35

0

2

4

6

8

10

12

11/12 12/13 13/14 14/15 15/16 16/17 17/18

10.9%

8.0%

6.9%

3.8%

5.2% 4.6% 4.6%

Adopt Budget on June 19, 2017

Reserves are close to 4.5% Board Policy minimum (no room for error)

Revise budget as necessary once State Budget is adopted

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District Actions to Resolve Deficit--Detail

General Fund Summaries and Assumptions

Revenue & Expenditure Assumptions Cost of 1% Salary

37


$Millions

Action Ongoing One-Time Total

CTE Program—Reduced GF Support CTE Contributions $0.40 $ 1.32 CTE Linked Learning .86 CTE Site Coordinator Release .22 S/T $2.80 Deferred Maintenance Contribution Reduction 0.73 0.73 District Office Cuts College Readiness Grants Funds Open Educational Resources 0.08 Post-Secondary Planning 0.07 GOT Plans 0.02 AP/IB Waivers 0.16 AVID Fees 0.02 Youth Development 0.02

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$Millions


District Office Cuts (Cont.) Copier Program Contract Savings $0.03 Fund Shifts 0.19 Professional Development Budget Reduction 0.01 Position Changes Eliminate ETS Director Position and Repurpose 0.19 Add Help Desk Tech and ETS Supervision (0.11) Eliminate Maintenance Manager Position 0.13 Change DBA Position to Programmer/Analyst 0.04 Eliminate Webmaster Position 0.11 Eliminate Transportation Clerk Position 0.02 S/T $0.98

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$Millions


Use of One-Time $ ECREC Paid off with Fund 40 $0.35 Future Forward—Fund with Lottery 0.20 Out of Home Care Reserve 0.20 S/T $0.75 Furlough Day—Managers Only $0.06 0.06 Over-Formula Teacher Reduction 0.41 0.41 Targeted Program Reductions Child Development Center Restructure 0.14 Drop-out Prevention Specialist 0.23 Intervention Programs (CEIS and SSI) 1.01 Opportunity Program/Site Learning Centers 0.20 IDEA/Chaparral Staffing 0.21 S/T 1.79

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$Millions


Special Education Cuts DHH Program Teacher Reduction 0.11 Aide Reduction 0.04 Interpreter Reduction 0.43 Temp & Sub Costs 0.02 Network Interpreting Service Savings 0.10 Inter SELPA Costs (0.20) Transportation Cost Differential (0.07) SECC VP Reduction 0.16 Campus Utility Position Reduction 0.06 Teacher Position Reductions (2.4 FTE) 0.30 Aide Position Reduction (4.4 FTE) 0.19 Home Choice Teacher Position Reduction (1.0 FTE) 0.02 S/T $1.16

42


$Millions


Site $ Allocation Reductions Site Discretionary Allocation Cut (10%) $0.28 MAA Allocation to Sites .10 S/T $0.38 Teacher Staffing Allocation (from 36:1 to 36.3:1) .44 0.44 SDG& E Rebates $0.40 0.40 Utilities Budget Savings 0.40 0.40 Total $5.85 $4.45 $10.30

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General Fund Sources (In Millions)

LCFF 160.5 Federal 11.3 Other State 11.8 Lottery 3.1 Other Local 21.2 Transfers In 0.1 Total Revenues $208.0

LCFF 77%

Federal 5%

Other State 6%

Lottery 2%

Other Local 10%

Transfers In 0%

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General Fund Expenditures (In Millions)

Certificated 85.0 Classified 38.8 Benefits 53.3 Books & Supplies 6.9 Operating 24.7 Capital/Other .7 Other Outgo & Transfers <.2> Total Expenditures $209.2

Certificated 41%

Classified 19%

Benefits 25%

Books & Supplies 3% Operating

12%

Capital/Other <1%

Other Outgo & Transfers <1%

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2015/16 2016/17 2017/18 2018/19 REVENUE ACTUALS WORKING ADOPTED PROJECTED BUDGET

1. COLA per SSC 1.02% 0.00% 1.56% 2.16% LCFF GAP Closed Percentage 52.2% 55.03% 43.97% 71.53% Calculated Rate per ADA 9,355 9,822 10,067 10,325 Enrollment Projection 17,234 17,029 16,910 17,388 Enrollment Growth/(Decline) <331> <205> <119> 478 Factor of Enrollment to P2 ADA 92.0% 91.9% 92.3% 92.3% P2 ADA 15,995 15,925 15,744 16,185 ADA for Funding* 16,451 16,008 15,854 16,185

2. Lottery - Regular $ 140.00 $ 144.00 $ 144.00 $ 144.00 - Instructional Materials $ 41.00 $ 45.00 $ 45.00 $ 45.00

*LCFF Funding is based on declining enrollment formula

48


2015/16 2016/17 2017/18 2018/19 EXPENDITURES ACTUALS WORKING ADOPTED PROJECTED BUDGET 1. Step and Column-All Groups In Actuals $ 1.4M $ 2.0M $ 2.1M

2. Health & Welfare Increases 1.76% 2.86% 5.35% 6.51% Annual Health Insurance $12,628 $13,073 $13,489 $14,328 (Per Employee) 3. Fringe Benefit Rates STRS State Teachers’ Retirement 10.73% 12.58% 14.43% 16.28% PERS Public Employees’ Retirement 11.847% 13.888% 15.5% 18.1% Social Security 6.20% 6.20% 6.20% 6.20% Medicare 1.45% 1.45% 1.45% 1.45% State Unemployment .05% .05% .05% .05% Workers’ Compensation 2.06% 1.89% 1.51% 1.51% Retiree Medical % (Amortization of UAAL) .99% .99% .99% .99% $/FTE (Normal Cost) $ 600 $ 600 $ 600 $ 600

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2015/16 2016/17 2017/18 2018/19 Expenditures (Cont.) Actuals Working Budget Adopted Projected 4. Salary Increases 5.0% 2.0% 0.00% 0.00%

5. Utility Increase <Decrease> 8% 0.00% <8.2%> 0.00% $551K $0.00 <$531K> $0.00

6. Supplies & Other Opr. Exp. Inc. 9% 1% 0% 0%

7. School Site Allocations Staffing Allocation 37:1 36:1 36.3:1 36.3:1 Unrestricted Dollar Allocation -- -- <$256K> -- 8. Special Ed Growth 5.2% 3.2% 2.6% 0.00%

$ 2.6M $ 3.1M $ 1.4M $0.00M

9. Projected Unexpended Amount In Base In Base In Base In Base (other than vacancy savings) 10. Vacancy Savings $ 0 $ 1.3 $.7M $.7M

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Bargaining Unit Salaries(1) Benefits Cost of 1% CSEA $257,750 $ 58,244 $ 315,994 SEIU 32,967 7,450 40,417 GEA 698,751 106,751 805,520 Confidential 9,290 2,099 11,389 Classified Supervisor 5,192 1,286 6,979 Management 101,314 17,262 114,312 Totals $1,105,765 $193,110 $1,298,875 (1) Salaries are based on projections as of July 1, 2017. (2) General Fund unrestricted and restricted encroaching resources

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Grossmont Union High School District June 15, 2017 · The Budget Process Timeline FY 2017/18 Governor’s May Revision Overview FY 2017/18 District General Fund Budget Highlights

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