May 11, 2017 Tony Wold, Ed.D. Assistant Superintendent ......December 15, 2016 1st Interim Budget (Data as of October) March 15, 2017 2nd Interim Budget (Data as of January) June 30,

May 11, 2017

Tony Wold, Ed.D.Assistant Superintendent, Business Services

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Budgeting for a school district is a continuous, year-round process. Projections continually change based on new and changing information.

June 30, 2016 Adopted 2016 – 17 Budget September 2016 Unaudited Actuals December 15, 2016 1st Interim Budget (Data as of October) March 15, 2017 2nd Interim Budget (Data as of January) June 30, 2017 Adopted 2017 – 18 Budget

Other than the presentation of the actual financial information all other budget presentations are a combination of actuals and projections for the current and upcoming year

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SUPPLEMENTAL GRANT – 20% of Base Grantprovided to address needs of English Learners, low income students, and foster youth

BASE GRANTthe same for every local educational agency with adjustments based on grade level

CONCENTRATION GRANT – 50% of Base Grantprovided when more than 55% of a district’s students fall into the high-needs category

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Decreased Gap Funding Projection for 2017-2018 (from 72.99% to 23.67%)◦ Districts are still not back to the spending authority equal

to the high funding mark in 2007-08 Reduced Proposition 98 funding attributed to 2015-

2016 and 2016-2017 by almost $1 Billion Prior year repayment for past mandate claims (one-

time approximate $48/ADA) Introduces June 2017 deferral to reduce Proposition

98 funding in the current year by almost another $1 Billion

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Now

The May Budget Revision was full of mixed messages

Current year reductions of $2 Billion Future year expectation of cuts due to◦ Pressures from the Federal Government◦ Expenditure Pressures◦ Employee Pension Costs◦ Concern of implementing programs that then need

to be rolled back Volatility of State Revenue – still below June

2016 projections Slight increase to Education funding

compared to January proposal7

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Decreased Gap Funding Projection for 2017-2018 (from 72.99% to 23.67%)◦ Additional Revenue will increase the gap but not fully back to

what was anticipated in June 2016 Reduced Proposition 98 funding attributed to 2015-

2016 and 2016-2017 was incorporated in the revised 2017-2018 LCFF funding at a lower amount.

Prior year repayment for past mandate claims (one-time block grant will continue for Common Core, PD, Infrastructure, Technology and Teacher Induction)

Proposed a June 2017 deferral to reduce Proposition 98 funding in the current year which was eliminated.

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11Increase from $7,869 in Jan.

Increase from Jan $51,351

The National Government Finance Officers Association (GFOA) published a “Best Practice” report in September 2015 Recommends at least 2 months of operational expenses

(at least 17%)

Westminster Reserves will be just above 6% at the end of 2016-17

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Enrollment◦ Lower Birth Rates in Orange County◦ District intention is to maintain low class sizes and

increase ratios based upon normal attrition

Increased Expenditures◦ Pension Costs – STRS and PERS◦ Compensation – Step and Column yearly increases

State Revenue Projections◦ LCFF gap funding would be close to 97% funded◦ Proposition 55 impact not until 2019 – 2020 Revenue decline minimizes positive impact of

Proposition 55 in the out-years13

Declining Enrollment has impacted the District for several years◦ For example in 4 years since

2013 the size of K classes has decreased from 1,042 to 869

Dual Immersion is having a positive impact on enrollment◦ Over 100 Inter-district

enrollments for 2017-2018◦ This is expected to increase

in future years.

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Grade 2013 2014 2015 2016 2017TransK 167 246 245 226 203

K 1042 961 945 890 8691 1012 1015 964 930 8672 1016 989 991 978 9213 1022 987 986 976 9594 992 1014 969 987 9625 981 971 1005 981 9776 1033 957 968 1022 9627 988 1009 973 1005 10258 1054 989 1015 998 1016

Subtotals: 9307 9138 9061 8993 8761Pct Chg: -1.8% -0.8% -0.8% -2.6%

SDC: 338 353 345 338 336Totals: 9645 9491 9406 9331 9097

Enrollment 2013 – Draft 2017

Sheet1

Totals

Grade20132014201520162017

TransK167246245226203

K1042961945890869

110121015964930867

21016989991978921

31022987986976959

49921014969987962

59819711005981977

610339579681022962

7988100997310051025

8105498910159981016

Subtotals:93079138906189938761

Pct Chg:-1.8%-0.8%-0.8%-2.6%

SDC:338353345338336

Totals:96459491940693319097

Sheet2

9,4069,331

9,097

9,491

10,024

9,645

8,6008,8009,0009,2009,4009,6009,800

10,00010,200

05/0606/07

07/0808/09

09/1010/11

11/1212/13

13/1414/15

15/1616/17

17/18

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Employer Rate Keeps increasing yearly

The STRS and PERS increases are greater than the LCFF revenue increases supplied by the State = $8,433,641 more per year by 2020!

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Year STRSRate

PERSRate

CalSTRS$

Increase

CalPERS$

Increase

Total$

Increase

Cumulative $

Increase2015-2016 10.73% 11.847% $1,252,211 $207,853 $1,460,064

2016-2017 12.58% 13.888% $1,251,475 $544,268 $1,795,743 $3,255,807

2017-2018 14.43% 15.531% $954,723 $292,649 $1,247,372 $4,503,179

2018-2019 16.28% 18.1% $921,867 $384,525 $1,306,392 $5,809,571

2019-2020 18.13% 20.8% $974,998 $410,585 $1,385,583 $7,195,154

2020-2021 19.10% 23.8% $732,337 $506,150 $1,238,487 $8,433,641

2016 -2017 2017 -2018 2018-2019

LCFF Gap Rate Projection 55.28% 23.67% 34.42%

Projected COLA (DOF) 0.00% 1.56% 2.40%

Step & Column cost $1,055,770 $1,296,602 $1,240,048

STRS (increased rate) $1,251,475 $954,723 $921,867

PERS (increased rate) $544,268 $292,649 $384,525

Restricted Maintenance (3% contribution)

$40,737 $54,564 $6,229

Reserve for Economic Uncertainties (increase)

$1,516,446 $838,601 $87,912

Declining Enrollment (loss of revenue) $1,063,695 $716,150 $2,089,038*

Reduction of COLA (loss of revenue) $458,695 ??? ???

Special Education Contribution (SELPA) $177,579 $507,410 $320,000

Insurance (increased rate) $55,687 $50,000 ???

TOTAL New Expenditures $6,164,352 $4,710,699 $5,049,619

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*Estimate

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2016-17 2017-18 2018-19Revenue $105,654,908 $103,102,438 $103,081,193Expenses $106,170,330 $104,155,340 $106,152,924Difference ($515,422) ($1,052,902) ($3,071,731)Beginning Balance $25,819,321 $25,303,899 $24,250,997Ending Balance $25,303,899 $24,250,997 $21,179,266

Components of Ending Fund BalanceReserve for Economic Uncertainties $6,370,220 $7,290,874 $7,430,705Stores $20,000 $20,000 $20,000Textbook Adoptions $2,484,742 $1,461,295 $0ACA/AB1522 $350,000 $250,000 $0Revolving Cash $100,000 $100,000 $100,000Restricted Designation $9,153,299 $9,003,805 $8,892,777Facilities $247,990 $0 $0Technology $152,000 $152,000 $0Future STRS/PERS $6,425,648 $5,973,023 $4,735,784

Data as of 2016-2017 Second Interim Report

Sheet1

2016-172017-182018-19

Revenue$105,654,908$103,102,438$103,081,193

Expenses$106,170,330$104,155,340$106,152,924

Difference($515,422)($1,052,902)($3,071,731)

Beginning Balance$25,819,321$25,303,899$24,250,997

Ending Balance$25,303,899$24,250,997$21,179,266

Components of Ending Fund Balance

Reserve for Economic Uncertainties$6,370,220$7,290,874$7,430,705

Stores$20,000$20,000$20,000

Textbook Adoptions$2,484,742$1,461,295$0

ACA/AB1522$350,000$250,000$0

Revolving Cash$100,000$100,000$100,000

Restricted Designation$9,153,299$9,003,805$8,892,777

Facilities$247,990$0$0

Technology$152,000$152,000$0

Future STRS/PERS$6,425,648$5,973,023$4,735,784

Sheet2

Sheet3

There is a clear economic slowdown in CA◦ The need for higher reserves is clear

Federal Funding to California is volatile based on the current political climate

The Governor’s January Proposal reduced the funding that will be received by WSD in 2017-2018 and the May revision did not completely reinstate those funds

The Governor’s May Revise does maintain a priority on Education◦ There are significant warning signs from the Governor

and the Department of Finance that cuts could be coming soon and the State is making reductions of $2 billion in the current budget.

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Governor’s May Revise �Budget Update�2016-2017 Budget CalendarSTATE FUNDING: LCFF REVIEWGOVERNOR’S JANUARY BUDGET PROPOSALJanuary Proposal�Reduction in Proposition 98 FundingState Revenue Trends DecliningGovernor’s May ReviseGOVERNOR’S MAY BUDGET REVISIONState Revenue Deficit ConcernsMay Revise Proposition 98 FundingState Reserves Continue to IncreaseCurrent Average ReservesBudget Development TrendsEnrollment TrendsHistorical and Current Enrollment�Based on CBEDSImpact of CalSTRS and CalPERSMajor Expenditure Assumptions – Out Years�(Based on Governor’s January 2017 Proposal)Multiyear Projections - CombinedNext Steps