1. First Interim Budget
2017/2018 Proposed District Budget reflecting changes from the June Adopted Budget

2. Budget Cycle

3. What’s changed from June?
A decrease in Beginning Balance
An increase in projected revenue from Property Taxes
A reduction in Federal Funding
An increase in Certificated and Classified Salaries & Benefits due to contract negotiations.
An increase in Employee Health Benefit Cap
An increase in expected Legal Fees
A reduction in the expected cost of a Program Director with the savings redirected to Professional Development.
A slight decrease in expenses associated with Special Education
A reduction in the anticipated amount of the MOU with the County Office of Education
A slight increase in the anticipated amount for Middle School MOU’s
Changes in assumptions for our Multi-Year Projections

4. Beginning Balance
After the District closed our books for the 2016/2017 fiscal year in August 2017, our ending balance was lower than projected.
This balance was brought forward to 2017/2018 decreasing our beginning balance at first interim over our projection in the June adopted budget.
Our Projected Beginning Balance in June was $395,383.
At first interim our Beginning Balance is $383,724, a decrease of $11,659.

5. Changes in Income
PROPERTY TAXES: Property taxes are projected based on current data from Santa Clara and Santa Cruz Counties. The Budget for property tax revenue increased from the Adopted Budget by 0.62%, adding an additional $7,910 in revenue to the First Interim Budget. The increase in projected property taxes for 2017/2018 over 2016/2107 is $59,708 or 4.89%. The average increase year over year for property tax revenue is 4%.
The Budget includes revenue from a parcel tax which passed in March 2017 and takes into consideration additional exemptions filed this year. Currently the district is at 18% of our taxable parcels exempted.
LCFF FUNDING: Included for 2016/2017 and projected for 2017/2018 is an additional amount of $9,009 which used to go directly to our Transportation JPA for Special Education Transportation. A change in state procedures now sends these funds directly to the District with the option to then send the funds to our JPA. We elected to keep these funds to help offset the cost of our Special Education transportation costs. The total now received by the District for LCFF funding is $133,641.
FEDERAL FUNDING: The First Interim Budget takes into consideration reductions in expected federal funding. Title I funds were reduced by $2,612 from Budget adoption and Title II funds were reduced by $4,123

6. Changes in Expenses
CONTRACT NEGOTIATIONS SETTLED: The First Interim Budget reflects the adjustment to the projected expenses associated with the negotiated increase in salary and benefits due to the settlement of contract negotiations with the Lakeside Teachers Association. The signed agreement was for a 2% increase on the salary schedule for 2016/ 2017, an additional 3% increase on the schedule for 2017/2018 and $1,000 increase on the benefit cap. The regular classified staff receives a “me too” clause and the Administrative staff received the increase to the benefit cap. The costs for 2017/2018 are: Certificated, $41,325, Classified, $6,694 and Administrative, $2,000. The District health benefit cap is now $9,900 per employee.
LEGAL: The cost of securing Legal Fees increased from the Adopted budget by $25,000. This is due to the costs associated with Negotiations and Fact Finding as well as Special Education.

7. Changes in Expenses
PERSONNEL: The First Interim changes to Personnel are a reduction in the projected cost for a Program Director, and the addition of a Science Instructor.
The savings from the Program Director will be applied to professional development for teachers.
Foundation is funding our Science program; the cost of instructor will be offset by the donation the district receives from Foundation.
There is a slight increase in the Classified Budget as the District hired additional administrative support to cover the office when the administrative assistant is absent.
MIDDLE SCHOOL CONTRACTS: The First Interim Budget reflects the adjusted rate per ADA for Loma Prieta based on their property tax per ADA for the 2016/2017 school year. Additionally, there is a placeholder for an additional student. The change from the Adopted Budget is $7, 533.

8. Changes in Expenses
SPECIAL EDUCATION: A slight decrease in expenses associated with Special Education is projected due to the fact that we are currently able to serve one student on site who was budgeted for a county placement.
COE MOU: A reduction in the anticipated amount of the MOU with the County Office of Education of $50,000 from Budget adoption. The $50,000 from the County was for one year only and the District received that funding in 2016/2017.
CONTRACTED SERVICES: The First Interim changes include the reinstatement of the Weed Abatement program funded by Foundation and expenses associated with hiring consultants for the Fact-Finding process. Each of these two expenses are projected at $6,000.
Capital Improvements: The District will be continuing to work on developing our New Well System as well as developing a Lead Abatement plan. Funds for these two programs are expected to come from the State Water Board and the State Hardship Fund. At this point the State is working with State Water Board to consolidate both projects into one. A decision of funding is expected by the end of January.

9. MYP General Assumptions
Multi-Year Projections are based on the latest information available from CDE, DOF, Lottery Commission, SSC and the proposed State Budget for 2017/2018 as of October 31, 2017.
Funding:
Continued Fair Share Hit (8.9% reduction)
4% growth in property taxes for the next two years
Expiration of one-time discretionary funds
Beginning as early as this year, we may need to apply for borrowing in order to meet payroll.
Staffing Assumptions:
Step and Column increases are in place for both Classified and Certificated.
Stable Certificated and Classified staffing
Stable Administrative staffing
Both Certificated and Classified Staff have settled salary negotiations for 16/17 & 17/18.

10. General Expenses Assumptions:
Foundation Funding bottled water, classroom computers, Music, PE, Science, Dance and Teacher Grants.
Special Education costs based on current IEPs.
Assumes one additional offsite SPED placement beginning in year two.
Assumes no additional unforeseen increases in Special Education
Assumes no continued COE and SELPA financial support for Speech, School Psychologist. (total approx. 60,000 per year)
Assumes no renewal of MOU with the COE to provide support and access to our financial reporting system (approx. 10,000 per year)
Costs associated with Middle School MOU’s reflect the higher per ADA charge for Loma Prieta.
Prop 39 projects complete in 2018
Increased STRS and PERS rates based on current information
Increase to general expenses based on School Services Dart Board. (CPI)
16/17
17/18
18/19
19/20
20/21
21/22
22/23
23/24
STRS
12.58%
14.43%
16.28%
18.13%
19.10%
PERS
13.88%
15.531%
18.1%
20.8%
23.8%
25.2%
26.1%
26.8%
CPI
2.37%
2.72%
2.92%
2.6%
2.73%

11. Other Concerns that may have financial implications:
Although current year does project a surplus of revenue over expenses, the following two years are both projecting significant deficit spending. If the assumptions remain unchanged, the district will need to make significant cuts in spending to order to be able to meet our financial obligations.
Neither 2017/2018 Adopted Budget nor the First Interim Budget reflect an increase in expense for a part-time maintenance position and a part-time IT position. The District has been operating with very limited maintenance support since June and has determined that we have a need for a part-time employee with regularly scheduled hours, although there are no available funds for this position. Our IT Support has been provided by a parent volunteer. While the district is extremely grateful for this service, it is not sustainable. Again, there are no funds currently available for this position. Both positions align with the District LCAP goals and the 5-year strategic plan objectives.
Our facilities are aging and need repair. Significant financial investment will be required to restore and maintain our facilities.

12. Ending Balance
The District is projecting that the District revenue will exceed the current year expenses. Lakeside projects a positive ending fund balance in the General Fund as of June 30, 2018 as well as for June 30, 2019 and June In addition, Lakeside is projected to meet the required 5% minimum standard reserve for the budget year and for both the second and third year. However. if the deficit spending remains unchecked, long term projections are showing the District will be in financial distress.
All other funds are projected to have a positive ending balance as of June 30, 2018.

13. Certification
SACS Forms\Certification.pdf

14. Budget 17-18 budget-first interim-General Fund.pdf
budget-first interim- Income.pdf
budget-first interim-Expenses.pdf
budget-first interim-Expenses by Function.pdf
budget-first interim-Expense Detail.pdf
COMPARISON.pdf
budget-first interim-MYP.pdf
LCFF Calculator.pdf

15. SACS SACS Forms\General Fund- Unrestricted.pdf
SACS Forms\General Fund- Restricted.pdf
SACS Forms\General Fund-Both.pdf
SACS Forms\Deferred Maintenance.pdf
SACS Forms\Special Reserve.pdf
SACS Forms\Building Fund.pdf
SACS Forms\Capital Outlay.pdf
SACS Forms\ADA.pdf
SACS Forms\cash flow.pdf
SACS Forms\MYP.pdf
SACS Forms\criteria and standards.pdf
SACS Forms\Technical review.pdf
SACS Forms\Certification.pdf