Walnut Valley Unified School District Board of Trustees March 19, Second Interim Financial Report

Agenda Changes Since First Interim (as of 10/31/2013) Changes Related to Governor’s January Budget Proposal Multi-Year Projection In Conclusion ….. Questions 2

Changes since First Interim Report 10/31/13 Unrestricted General Fund LCFF/Revenue Limit Sources$ 0 Other State Revenues$ 0 Other Local Revenues$ (530,000) Total Revenues$ (530,000) Salaries and Benefits$ (1,070,392) Supplies and Services$ 89,892 Capital Outlay $ 0 Indirect Costs $ 0 Total Expenditures$ (980,500) Other Sources/Uses and$ 0 Contributions Unrestricted GF Balance$ 450,500 Other local revenues decreased - $(500,000) lease and rental income from RHA, and $(30,000) interest earnings in County Pool Appropriation for benefits decreased – benefit eligibility review, historical trend analysis Supplies and Services increased – Professional/Consulting Services and Operating Expenditures Fund balance increased $450,500 – Decrease to Reserve for Economic Uncertainties $(33,577) – at 3% level – Increase to Other Commitments $484,077 3

Changes since First Interim Report 10/31/13 Unrestricted General Fund First Interim Report Second Interim Report DifferenceExplanation LCFF/Revenue Limit91,066,850 0 Federal Revenue10,000 0 Other State Revenue2,574,080 0 Other Local Revenue1,553,5861,023,586(530,000)Lease and Rental Revenue and Interest Total Revenues95,204,51694,674,516(530,000) Salaries and Benefits81,000,19479,929,802(1,070,392)Employee Benefits Supplies and Services8,084,8358,174,72789,892 Capital Outlay38,090 0 Other Outgo1,650,585 0 Total Expenditures90,773,70489,793,204(980,500) Other Financing Sources/Uses (4,857,814) 0 Net Increase/Decrease(427,002)23,498450,500No deficit spending projected

Changes since First Interim Report 10/31/13 Unrestricted General Fund Improving 2013/14 Ending Balance – Potential increase in Enrollment/ADA through P statewide average for unified district – 94.08% Walnut Valley Unified School District – 97.59% – Appropriation review – Expenditure savings Second Interim to Estimated Actuals (June 2014) – Cost containment – review expenditures for necessity – Alignment of programs under the LCAP – Additional funds in Governor’s January Budget Proposal LCFF approved with initial funding in the amount of $2.1 billion $4.5 billion in on-going GAP funding, approximately 28% - $548 per ADA 5

Changes Related to Governor’s January Budget Proposal for 2014/15 Key Elements Proposition 98 – $6.3 billion over due to an increase in projected revenues $2.7 billion – for retirement of K-14 deferrals (cost $6.1 billion) – An improving economy increased minimum funding levels $1.8 billion $1.5 billion Reserve – A constitutional amendment that would mandate a portion of state revenue growth be dedicated to a Special Reserve Fund, and accrue to the Prop 98 reserve for “smoothing” in fluctuations in the minimum guarantee 6

Multi-Year Projections Budget Year +2 ( through ) Includes – Revenue calculations under LCFF with GAP funding $92,010, $99,397, $107,039,207 – ADA Projections: , , ,329 – Step and column increases – Adjustments to expenditures to reflect one-time items, utility increases and CPI – Adjustments for the estimated cost of collective bargaining agreements through furlough days in and furlough days back on schedule in – Reductions in the amount of $700,000 in (on-going pursuant to Fiscal Stabilization Plan) – $700,000 transfer in from Building Fund (Fund 21) in support of Routine Restricted Maintenance Fund (RRMF) eliminated in – DEU in budget and projection years meets the recommended minimum reserve amount (3%) – LCFF GAP funding reserved in and – Projecting positive fund balances in each of the projection years 7

Multi-Year Projections Budget Year +2 ( through ) 8 Adopted Budget Beginning Fund Balance$9,305,368$9,328,866$15,420,482 Total Revenues$112,218,461$116,672,597$123,614,653 Total Expenditures$112,194,963$110,580,981$114,938,837 Net Increase/Decrease in Fund Balance (Structural Deficit) $23,498$6,091,616$8,675,816 Ending Fund Balance$9,328,866$15,420,482$24,096,298 Required Components of Ending Fund Balance $5,572,182$13,325,851$13,296,554 Ending Fund Balance (Committed) $3,756,684$2,094,631$10,799,744 Combined General Fund Increased reserve requirement for one years GAP funding

In Conclusion ….. The Governor’s proposal marks the beginning of the budget cycle – May Revision – Legislature adopts budget by June 15 Student data collections are more important than ever; CALPADS, CBEDS – Counts feed into the supplemental and concentration factors of the LCFF Local Issues – Adequate reserves are absolutely necessary – Cash borrowing and liquidity – Managing the structural deficit – Declining Enrollment – Collective Bargaining – CalSTRS and CalPERS – significant increase to contribution rates in the future 9

Questions? Second Interim Report.ppt Author: Jeanette Ullrich Title: Assistant Superintendent, Business Services Walnut Valley Unified School District