1. First Interim Financial Report
An update on our District’s financial status as of October 31, 2017

2. State Budget
Overall, the state’s and budget outlook is positive.
The Legislative Analyst’s Office (“LAO”) estimates:
The LCFF target can be fully funded in
An increase to Prop 98 minimum funding guarantee of $2.6B in
The state’s General Fund will end with $13.67B in total reserves. This is projected to increase to $19.29B in

3. State Budget (cont.)
The LAO Report in November 2017 assumes two long-term outlook scenarios: moderate economic growth over the next five years or a recession starting in
Under the growth scenario:
The Prop 98 minimum guarantee is estimated to increase $12.1B by
When considering the Prop 98 one-time commitments, the Legislature will have an estimated $5.3B available for Prop 98 priorities in

4. State Budget (cont.) Under the recession scenario:
Starting in , the Prop 98 minimum guarantee will drop $5B. An additional $2.4B will be lost in
Staff estimates this drop to cost VVUSD approximately $24M over the 2-year period.

5. State Budget (cont.)

6. State Budget (cont.)

7. Assumptions for District’s 2017-18 First Interim Report

8. First Interim Financial Report
There are several changes from the Unaudited Actuals Budget to this Interim Report:
Over $5.1M in additional revenue over three years due to LCFF increases based on an increase of almost 178 ADA.
In the current year, deficit spending is projected on the Restricted portion of the budget. This is due to spending of one-time monies as well as categorical carryover.

9. First Interim Financial Report (cont.)
currently reflects deficit spending of $2.46M ($1.15M Unrestricted). This is partly a result of spending down categorical carryover and the increases to the employer contribution rates for STRS and PERS, as well as the addition of OVHS.
In addition to our typical 10 growth teachers per year, & reflect an additional 10 teachers to accommodate the growth.

10. First Interim Financial Report (cont.)
Due to the volatility of the LCFF model, the District has maintained our modest increases in our Reserve for Economic Uncertainty.
= 5.0%
= 5.0%
= 5.0%
*Total rate is slightly below, as SELPA has elected to maintain their contribution rate at 3.0%, which creates a lower blended rate. The required minimum is 3.0%.

11. First Interim Financial Report (cont.)
Routine and Restricted Maintenance (“RRM”)
Current Budget has approximately 2.0% for RRM.
With the passage of Prop 51, the District must increase RRM to 3% for and beyond. This is reflected in the MYP.

12. First Interim Financial Report (cont.)
Deferred Maintenance
Under LCFF there are no matching Deferred Maintenance Funds. Districts must now budget funds from the LCFF funds.
Prior to LCFF, Districts would budget 0.5% and the State would match (1% total).
This Interim Report reflects a $3.5M budget for through for additional M&O and Facilities expenses, as identified in the LCAP.

13. First Interim Financial Report (cont.)
The District’s COP Debt Service Burden:
$5.58M in
$5.58M in
$5.58M in
The first $1.35M is coming from Redevelopment revenue and the remaining is coming from the Unrestricted General Fund. This may be offset by Developer Fee collections.

14. STRS Rate Increases

15. PERS Rate Increases

16. Budget Summary

17. Per-ADA Revenues vs. Expenses

18. Per-ADA Revenues vs. Expenses

19. First Interim Financial Report (cont.)
Fund 12 – Child Development
The Preschool program requires a contribution from the General Fund for approximately $271.5K. This is an increase of $52K from , but a decrease from projected due to an increase in per pupil funding.
Fund 13 – Cafeteria Special Revenue
This fund is projected to have a healthy EFB of over $3.4M.

20. First Interim Financial Report (cont.)
Fund 17 – Special Reserve for Other Than Capital Outlay Projects:
The First Interim projects a balance of $3.94M remaining in this Fund. Future transfers will be budgeted as construction on Orange Vista High School continues.

21. First Interim Financial Report (cont.)
Fund 21 – Building Fund
The Interim Report projects $31.86M being spent in , with an ending balance of $0.74M.
$21.6M was brought into the fund when the state paid their portion of OVHS Phase I costs. Those dollars backfilled for the Measure L advance to cover the construction costs at OVHS.
Staff is currently working with the Office of Public School Construction to get reimbursed for Phases II & III.

22. First Interim Financial Report (cont.)
Fund 25 – Developer Fees:
To date, the District has received $2.96M in Developer Fees.
The District typically does not budget receiving or expending these funds annually, as this income is cyclical and tied to the economy.
Fund 35 – County School Facilities
No additional revenue anticipated for , with the exception on interest earned.
Ending Fund balance projected to be $1.22M.

23. First Interim Financial Report (cont.)
Fund 40 – Special Reserve for Capital Outlay
This Fund is used to account for monies pulled from surplus CFD Funds and is used for capital projects.
The balance of this Fund is $345K.
Fund 51 – Bond Interest and Redemption
This is handled by the County Treasurer. Revenue is generated by the property taxes assessed for the bond measures.

24. First Interim Financial Report (cont.)
Fund 67 – Self-Insurance Fund
This fund was established to account for the Self-Funding of our vision plan.
The Report projects $435K in revenues offset by $422K in benefit related expenses.
Fund 71 – Retiree Benefits (Irrevocable Trust)
Contributions are continuing at a rate of 0.90% of payroll.
Balance is projected to be $7.9M at year end.

25. Questions?