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Board of Trustees Meeting June 17, 2014 Presented by: Audrey Kilpatrick Asst. Supt. Business & Operations.

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Presentation on theme: "Board of Trustees Meeting June 17, 2014 Presented by: Audrey Kilpatrick Asst. Supt. Business & Operations."— Presentation transcript:

1 Board of Trustees Meeting June 17, 2014 Presented by: Audrey Kilpatrick Asst. Supt. Business & Operations

2 2014-15 State Budget Update 2  June 15 State Budget Deadline Just hours ahead of a constitutional deadline, the California Legislature approved a $108 billionspending plan Sunday for the 2014-15 fiscal year The budget now heads to Gov. Jerry Brown, who called the spending plan a "solid andsustainable budget.” Democratic lawmakers successfully lobbied for more generous spending than Brown had proposedin order to restore and expand programs cut duringthe recession The 2014-15 State Budget is based on the Governor’s revenue forecast, and much of theframework is the same as the May Revision but withsome important changes Governor has until the end of the month to sign the State Budget and provide any line-item vetoes Many final details still to come through trailer bills

3 2014-15 State Budget 3 Among the highlights: Deferrals - the budget does not eliminate all deferrals. About $1 billion in deferrals eliminated for 2014-15. If next year’s May Revision is higher thananticipates revenues, an additional payment will be made to fully eliminate alldeferrals by the end of 2014-15 STRS – CalSTRS rate schedule adopted shows employers taking smaller step in year one (8.25% to 8.88%, previously proposed at 9.50%), and does not spike atyear four as the alternative proposal would have LCFF - $250 million more than Brown proposed for the Local Control Funding Formula, bringing it to $4.5 billion CTE - $250 million for the Career Pathway Trust, which funds a second year of grants for career tech and linked learning programs Mandates - $400 million to begin paying off K-14 education mandates with the intent that the money be used for the implementation of the Common Core StateStandards Early Childhood Education - $155 million for new child care slots expected to serve an additional 1,500 low-income students Local Reserves - Despite strong opposition from school management groups, the final state budget approved Sunday night includes provisions restricting the sizeof reserves that districts can accumulate under certain economic conditions.Under the system, most districts would be required to have reserves that do notexceed 6 percent of their revenues. At the public hearing for budget adoption orrevision, a district must substantiate the reasons for this “excess,” and the COEwill be required to determine whether the district complied with therequirements. The cap on reserves would be tied to voter passage in Novemberof Gov. Brown’s revised plan for a state rainy day fund, and even then only inyears when the state actually puts money into a new reserve for Prop. 98

4 WPUSD 2014-15 Budget Assumptions The 2014-15 Adopted budget is built from assumptions from the Governor’s May Revision proposals, federal and local revenue projections, district historical data, School Services of California dartboard, FCMAT LCFF Calculator and PCOE Common Message. Additionally, PCOE is recommending that each district maintain a reserve level in excess of their required reserve, no less than the new gap funding for the subsequent fiscal year. As this is only a recommendation, each district must assess their combined general fund reserve as a percentage of total General Fund expenditures for each year. The budget also reflects the most recent State’s May Budget Revision. Once the State approves a budget and final calculations are made of the actual funding the District will present the effect to the Board within 45 days. 4

5 Revenue Assumptions 5

6 Average Daily Attendance 6 We have projected an enrollment increase of 68 students for the next year and an increase of 69 students in fiscal year 2016-17, representing a 1% growth. The ADA rate is projected to move from 95.7% in the current year to 95.5% in the 2014-15, 2015-16 and 2016-17 fiscal years based on current ADA rate trends.

7 Expenditure Assumptions 7

8 2014-15 Budget Reductions & Use of Fund Balance - $4.4M 8 The District plans to use any available unassigned unrestricted Fund Balances reserves at June 30, 2014 year end towards offsetting the 2014-15 structural deficit while maintaining the required 3% Reserve for Economic Uncertainties. The amount is current estimated at $2 million of unassigned unrestricted Fund Balance reserves.

9 2013-14 2 nd Interim vs. 2013-14 Estimated Actuals 9 Major Changes in 2013-14 Budget Revenues: Revenue Limit – ADA Inc. 640,000 State Revenues 50,000 Local Revenues (75,000) Federal Revenues 30,000 Change in Revenues 645,000 Expenditures: Salaries & Benefits (Concession payback) 310,000 Services & Operating (285,000) Books & Supplies (net of c/o) (920,000) Change in Expenditures (895,000) Total Net Increase in Projected 13/14 Ending Fund Balance 1,540,000

10 WPUSD 2014-15 General Fund Budget 10

11 Categorical Revenues and Contributions (Encroachment) 11 Categorical Revenue State categorical programs are increased by a.85% COLA for 2014-15. Federal categorical programs have been adjusted to reflect projected federal funding levels. The 2014-15 budget also reflects the carry forward of unspent funds Economic Impact Aid (EIA) funds from 2013-14 into 2014-15. Some categorical programs require contributions from the district unrestricted funds as the funding received does not cover the expenditures for that specific program. A summary of the change in contributions from 2013-14 to 2014-15 is summarized below.

12 Multi-Year Projections 12 Due to increased projected LCFF GAP funding, future budget cuts may not be necessary IF future years’ LCFF GAP funding projections hold. 2014-15 - Unassigned Unrestricted Fund Balance Reserves (including 3% Required Reserve, DM Reserve and 2015-16 LCFF GAP Funds Reserve) = 9.0% Without DM Reserve = 6.4%

13 Cash Flow – 13/14, 14/15 and 15/16 13 Increase in deferrals and decrease in reserves leaves negative cash in approximately 7 of 12 months

14 The 2014-15 Adopted Budget reflects funding as calculated for the new Local Control Funding Formula (LCFF), which replaced the traditional Revenue Limit funding model. The LCFF is intended to correct historical inequities and increase flexibility, but it also brings new challenges, as districts must quickly adapt to a new funding model. In addition, many of the details and regulations of the new accountability structure are slowly evolving from the State Board of Education. Below are the projected COLA and Gap Funding rates from the Dept. of Finance (May Revise):

15 2014-15 Adopted Budget - Other Funds 15

16 The Future This is only the beginning … Governor still has not signed the budget passed by legislature – has until June 27 th to sign or veto Trailer bills still need to be finalized Plan on 45 day report of effect of State Budget approval – August 2014 and several budget revisions in 2015-16 2013-14 Unaudited Actuals will be presented in September 2014 Closely monitor DOF’s projected LCFF GAP funding percentages for future years 16

17 Recommend approval of 2014-15 Adopted Budget

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