Transcript Presentation - West Contra Costa Unified School District

West Contra Costa
Unified School District
December 17, 2014
2014-15
First Interim Financial Report
1
First Interim 2014-15
•
•
•
•
Period Ending October 31, 2014
Updated Information on District Enrollment
Latest Information from the State
Utilizing the expenditure budget assumptions
described in the Executive Summary and the
LCFF Calculator provided by the State
• Information for all funds
2
Changes since Budget Adoption
• Enrollment decline
– Charter Schools
– Demographic Estimate Change
• State rate of funding change toward
the 8 year target
• Emerging information on the Local
Control Funding Formula and Special
Education
• Shift in STRS rate of increase
3
Enrollment
Demographic Report
Charter School Estimate
• New demographic study is
incorporated in First Interim
• Previous report had growth of
1,348 students over the three
year budget period of 2014-15
to 2016-17
• New report has growth of 208
students over that same
period
• This growth is offset by
Charter enrollment estimates
• Three new charters entered
the system after budget
adoption and existing
charter enrollment
estimates were updated
• 2015-16 Enrollment decline
estimate due to charters is
1,377 students
• 2016-17 Enrollment decline
estimate due to charters
1,967 students
As enrollment declines are estimated the number of students qualified toward
Supplemental/Concentration funding also declines.
Enrollment Drives Revenue
Comparison of Adopted Budget Assumption vs First Interim Report
E n ro llm e n t
E n ro llm e n t E st. Ju n e 2 01 4
D e m o g ra p h ic E stim ate s
C h a rte r S ch o o ls
N e w E n ro llm e n t E stim ate
U n d u p lic a te d C o u n t
E st. Ju n e 2 0 1 4
F irst In terim
D iffe re n ce
2 0 1 5 -1 6
2 0 1 6 -1 7
2 9 ,9 2 0
(4 7 4 )
(1 ,3 7 7)
2 8 ,0 6 9
3 0 ,3 0 0
(7 6 4 )
(1 ,9 6 7)
2 7 ,5 6 9
2 0 1 5 -1 6
2 0 1 6 -1 7
2 2 ,0 6 9
2 0 ,9 6 6
(1 ,1 0 3)
2 2 ,0 6 9
2 0 ,5 9 3
(1 ,4 7 6)
Revenue Changes
• State Formulas impact revenue changes
– The amount of funding as a % toward the 8 year
full funding target has changed
– Budget Adoption 2015-16 assumed District would
receive 33.95% toward the target
– First Interim 2015-16 assumes 20.68%
• Base year funding assumptions for LCFF related to
former EIA grant shifts funding between Base and
Supplemental Concentration
Revenue Changes
F u n d in g A d ju s tm e n t B a s e
E st. Ju n e 2 0 1 4
F irst In terim
D iffe re n ce
F u n d in g A d ju s tm e n t
S u p p le m e n ta l/C o n c e n tra tio n
E s t. J u n e 2 0 1 4
F irs t In te rim
D iffe re n c e
2 0 1 5 -1 6
2 0 1 6 -1 7
$ 2 0 3 ,9 0 2 ,4 4 8
$ 1 9 5 ,7 5 1 ,6 8 1
($ 8 ,1 5 0,7 6 7 )
$ 2 1 2 ,9 6 0 ,0 6 0
$ 1 9 9 ,1 8 5 .5 1 2
($ 1 3 ,7 7 4,5 4 8 )
2 0 1 5 -1 6
2 0 1 6 -1 7
$ 3 4 ,4 0 7 ,3 8 5
$ 2 6 ,5 1 1 ,3 2 6
($ 7 ,8 9 6 ,0 5 9 )
$ 3 9 ,2 4 8 ,7 6 1
$ 3 3 ,2 6 0 ,4 7 7
($ 5 ,9 8 8 ,2 8 4 )
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Target Calculations: 2014-15
West Contra Costa Unified
Factors
Base Grant
Grade Span Adds
K-3
4-6
7-8
9-12
$7,012
$7,116
$7,328
$8,491
$729
$221
Supplemental
$1,156
$1,063
$1,095
$1,302
Concentration
$762
$701
$722
$858
Targeted Goal
$9,659
$8,880
$9,145
$10,872
These targets are dependent upon State action each year and are subject to change.
Full implementation of target funding is anticipated in 2020-21 school year.
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Funding Estimate: 2014-15
West Contra Costa Unified
• Target total for Base and Supplemental
Concentration is $270,387,838
• ACTUAL Funding Estimate for Base and
Supplemental Concentration is $211,530,354
• This year the District is estimated to receive
78% of the Targeted funding amount.
• The amount attributed between Base and
Supplemental Concentration is a formula and
not broken out by grade span.
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Local Control Funding Formula
First Interim
• 2014-15 target vs Phase in entitlement calculation
Summary of Funding
Target
Total Phase-In Entitlement
2014-15
$ 270,387,828 $
$ 211,530,354 $
2015-16
2016-17
266,310,925 $ 267,195,480
217,557,689 $ 227,742,944
Base
Supplemental/Concentration
Total Funding
$ 191,898,654 $
$ 19,631,700 $
191,048,636 $ 194,482,467
26,511,326 $ 33,260,477
$ 211,530,354 $
78%
217,559,962 $ 227,742,944
82%
85%
Estimated Percent toward Target
This funding level assumes the State will fund the target “gap”
2014-15 29.56% - 2015-16 20.68% - 2016-17 25.48%
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How far away is our target?
• The LCFF has an 8 year implementation plan
• The 2014-15 Funding Target as of First Interim
is $270 million
• The 2014-15 Estimated Funding $211 million
– The Funding “Gap” is $59 million
• Each year the LCFF base grants are adjusted,
but not necessarily funded. That will be a
decision of the State Legislature based upon
funds available.
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Multi Year Projection
First Interim Report
Unrestricted General Fund
Revenues
Expenses
Deficit Spending
Use of Special Reserve
Transfer
Beginning Fund Balance
Use of Fund Balance
Ending Fund Balance
Required Reserve
Stores & Revolving Cash
Balance
Chart in Thousands
2014-15
2015-16
2016-17
$224,141
231,974
($7,833)
$228,512
237,342
($8,830)
$238,825
243,875
($5,050)
-
4,292
14,159
(4,538)
9,621
9,321
21,992
(7,833)
14,159
9,729
300
$4,130
300
$0
5,238
9,621
188
9,809
9,509
300
$0
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Multi Year Projection
• 2014-15
– Will meet 6% reserve with a combination of
General and Special Reserve Funds
• 2015-16
– Will meet 3% reserve in General Fund and 2.4% in
Special Reserve Fund
• 2016-17
– Will meet 3% reserve in General Fund and .70% in
Special Reserve Fund
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Multi-Year Projection
• Assumptions Used for Multi-Year Projections
• Maintains….
– Programs currently in place
– Exception of Grad Tutors – to be reconsidered in 2015-16 LCAP
• Increases
–
–
–
–
Driven costs on formulary such as step and column
LCAP costs by $3.2 million in 2015-16
LCAP costs by $6.7 million in 2016-17
Maintenance funding $4.8 million in accordance with State requirement
beginning in 2015-16
• Decreases
– 34 Teaching staff based on estimated decline in enrollment in 2015-16
– 16 Teaching staff based on estimated decline in enrollment in 2016-17
Future Funding Estimates
• There is a higher level of volatility and risk in
this funding model
– Student Demographic Changes
– Legislative Support must continue over time
– Economic Stability and Growth
Expense Planning
• The District is deficit spending by an estimated
$7.8 million as of First Interim
• Salary and Benefit Increases will be requested
through bargaining
• Because of low funding over several years,
demand is higher than the increased funding
• District must plan to reduce deficit spending
STRS Multi Year Rates
STRS Rates
$25,000,000
$21,483,197
$22,632,602
$19,291,034
$20,000,000
$17,098,871
$14,906,708
$15,000,000
$10,858,534
11,687,731
$12,714,545
$10,000,000
$5,000,000
$8.25%
8.88%
10.73%
12.58%
14.43%
16.28%
18.13%
19.10%
2014-15
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
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Retirement System Costs
• The increased cost to fund retirement system
contributions will be escalating between $2.5 and
$3 million per year
• This is roughly equivalent to a 2% raise for all
employees
• The District pays for over 2300 retiree health care
plans for those employees who were in a vesting
status and/or retired prior to 2010 the annual
cost is $18 million, which rises based upon health
care premium rates
Structural Deficit
• Defined as having ongoing programs and
financial commitments for a given year that
exceed that particular year’s revenue
• Ending Fund Balance or Special Reserve Funds
can be used to address the deficit
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Structural Deficit
• The Board needs to be aware of the use of one-time
funds and prepare plans for reducing commitments
as one-time funds are depleted
• 2014-15 the District has planned use of ending fund
balance in the amount of $7.8 million
• 2015-16 the District has planned use of ending fund
balance of $4.5 million plus Special Reserve of $4.3
million = $8.8 million
• 2016-17 the District has planned use of Special
Reserve of $5.2 million
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Reserves
• 3% Reserve for Economic Uncertainty is the standard for a
District our size
• Due to the risk of volatility in funding the Board adopted a 6%
reserve target with 3% in the General Fund and 3% in the
Special Reserve fund
• With current revenue and expense assumptions that target
will not be met in 2015-16 and 2016-17
• By way of comparison a monthly payroll cost this school year
can be as much as $12.2 million
• A 3% reserve is $9.7 million
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Special Reserve Summary
First
Interim
Special Reserve Fund – 17
Balance June 30, 2014
$
11,705,168
2015-16 use of Special Reserve
$
(4,292,207)
2016-17 use of Special Reserve
$
(5,238,619)
$
2,174,342
Special Reserve Fund Balance Projection June 2017
Fund Review
• Review of Budget Fund Schedules
– Schedule 2
• Adult Ed, Child Development, Deferred Maintenance,
Special Reserve
– Schedule 3
• Building, Capital Facility, County School Facility, Special
Reserve for Capital Outlay
– All funds are estimated to have positive ending
fund and cash balances for 14-15, moving in to
the 2015-16 budget year
Next Steps
• December 2014
First Interim Budget Report
2015
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January
January
February
February
March
March
April
May
May
June
Governor’s January Budget
Budget Study Session
Governor’s Budget Review
Budget Study Session
Second Interim Budget Report
District Local Control Accountability Plan (DLCAP) committee Meeting
DLCAP Committee Meeting
Governor’s May Revised Budget
Public Hearing for LCAP
Adopt 2015-16 Budget and LCAP
Financial reports available on the web
http://www.wccusd.net/
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