Budget Focus Committee 5/30/2017 12/14/2016 2016-2017 Budget Summary Budget Focus Committee 5/30/2017

BUSD would get $10,598 more per student if we were in New York BUSD would get $10,598 more per student if we were in New York. = $88,784,000 more in funding. BUSD would get $1,961 more per student at Average = $15,688,000 more in funding. 36th

Current State Update Economic factors healthy Personal income tax growing about 5% per year Unemployment low Stock Market high State still relies on volatile Capital Gains Taxes Top 1% of tax payers account for 45% of taxes Longest Stretch of time without Recession

Capital Gains Risk 15% increase from 2016 to 2017

Current State Update Revenue for 2016/17 was reduced Reduces LCFF Gap funding Governor projects 15% increase in 17/18 Revenue Increase to LCFF Gap funding LCFF GAP funding will be at almost 97% One time funding increase in Budget With a catch

One-Time Discretionary Funds As a result of modest revenue increases since the release of the January Budget, the May Revision proposes an increase in discretionary one-time funding of just under $750 million But, the Governor proposes to hold all of the funds until May 2019! Funds can be used for any one-time expenditure as determined by a local governing board One-time apportionments will offset LEAs’ outstanding mandate reimbursement claims on a dollar-for-dollar basis We continue to believe that these funds should not count toward mandate reimbursement January Budget May Revision Per-ADA $48 $170 Total $287 million $1.01 billion

SSC Dartboard The complete SSC Dartboard is included in our materials at the end of this section Factor K-3 4-6 7-8 9-12 2017-18 Base Grants $7,193 $7,301 $7,518 $8,712 Grade Span Adjustments $748 - $227 2017-18 Adjusted Base Grants $7,941 $8,939 Factor 2016-17 2017-18 2018-19 2019-20 Statutory COLA 0.00% 1.56% 2.15% 2.35% SSC Gap Funding Percentage 55.03% 43.97% 39.03% 41.51% DOF Gap Funding Percentage 71.53% 73.51%

Current State Update - Expenses Public Retirement systems Districts must increase contributions on behalf of employees PERS STRS Cost of providing services for special education students are increasing without increase in SPED funding.

CalPERS Employer Contribution Rate Increases CalPERS Board adopted an employer contribution rate of 15.531% for 2017-18, almost 2% higher than the current-year rate of 13.888% While the new projected rates are slightly lower than those previously released by CalPERS, they are still significant annual increases that will add to the squeeze on base revenues CalPERS Board also adopted the contribution rate for employees subject to the Public Employees’ Pension Reform Act (PEPRA) Currently, PEPRA members are contributing 6%, which will increase to 6.5% for 2017-18 “Classic” members continue to pay 7.0% Year Previously Released Employer Contribution Rates Employer Contribution Rate* 2014-15 11.77% 2017-18 15.8% 15.531% 2018-19 18.7% 18.1% 2019-20 21.6% 20.8% 2020-21 24.9% 23.8% 2021-22 26.4% 25.2% 2022-23 27.4% 26.1% 2023-24 28.2% 26.8% 2024-25 N/A 27.3% STRS 13/14 and 14/15 8.25% 8.88% PERS 11.44% 11.77%

Funding CalSTRS Employer rates are increasing to 14.43% in 2017-18, up from 12.58% in 2016-17 No specific funds are provided for this cost increase Under Education Code Section (E.C.) 22950.5, once the statutory rates are achieved, CalSTRS will have the authority to marginally increase or decrease the employer and state contribution rate CalSTRS cannot increase rates by more than 1% in a year and cannot exceed 12% overall, until the remaining unfunded actuarial obligation is eliminated Year Employer Pre-PEPRA* Employees Post- PEPRA** 2014-15 8.88% 2016-17 12.58% 10.25% 9.205% 2017-18 14.43% 2018-19 16.28% 2019-20 18.13% 2020-21 19.10% STRS 13/14 and 14/15 8.25% 8.88% PERS 11.44% 11.77%

District’s Retirement Contributions 12/14/2016 District’s Retirement Contributions +~ Another 5.5 Million Ongoing

Special Education Statewide Target rate increases to $540.99 The Governor’s 2017-18 May Revision includes funding to pay for the small uptick in the statutory COLA increase for special education The COLA is now estimated to be 1.56%, up from the 1.48% projected in the Governor’s January proposal The estimated rate is $8.31 per ADA Statewide Target rate increases to $540.99 Negligible funding increases to mental health and out-of-care funding The Governor states that his office will, “spend additional time in the coming months examining these issues to chart a path forward that will maximize resources to serve students while increasing transparency and accountability.”

Special Education

Federal Budget Concerns Proposed cut to entire Title II funding $85,000 potential loss to Brentwood After School Programs Marsh Creek receives State After School Funding Medicaid Potential $20 Billion loss to California Voucher funds Takes funds away from or reduces other programs

Brentwood Union Information

Enrollment End to Start… 12/14/2016   June No Show Day Fall Census Day Last Day 2012 8393 8347 8426 8453 2013 8406 8474 8481 2014 8494 8562 8706 2015 8650 8738 8870 2016 8884 8917 9032 2/21/17 + 162 from June Trends are changing Gained through the year (March 31) 2015 - 164 total growth last year 2014 - 225 the year before Follow trend from previous 2 years (-50) then gain Projecting Flat enrollment for now.

LCFF Funding Comparisons 12/14/2016 LCFF Funding Comparisons Ranking 2016-17 LCFF Funding per ADA District Name Unduplicated Pupil Percentage District Type County 127 $9,771 Pittsburg Unified 81% Unified Contra Costa   $9,750 Average High School District 56% High Statewide 177 $9,544 West Contra Costa Unified 74% $9,380 Average Unified School District 64% 220 $9,326 John Swett Unified 70% $9,320 Average School District 63% 231 $9,282 Antioch Unified 71% 270 $8,998 Liberty Union High 31% $8,875 Average Elementary School District 66% Elementary 296 $8,837 Acalanes Union High 5% 354 $8,434 Mt. Diablo Unified 49% 391 $8,195 Martinez Unified 434 $7,962 Oakley Union Elementary 461 $7,782 San Ramon Valley Unified 8% 471 $7,701 Byron Union Elementary 29% 472 $7,678 Brentwood Union Elementary 30% 483 $7,503 Walnut Creek Elementary 17% 488 $7,367 Lafayette Elementary 4% 491 $7,324 Moraga Elementary 492 $7,292 Orinda Union Elementary 2% Staffing enrollment projection = 9156 96% of 9156 = 8,789.76 1) Source: California Department of Education (CDE) LCFF funding per 2016-17 P-1 certification. 2) Data does not include Charter Schools, Basic Aid districts, and some Small School districts (ADA under 2,500) that qualify for additional LCFF funding due to their size. 3) Unduplicated Pupil Percentage Average represents percentage of students in a district that are considered “high needs"—that is, low-income, English Learner, and/or foster care youth.

Expenditures/Revenue for Contra Costa County Districts District Name Enrollment Current Expenditures per ADA (Ed Code 41372) Total Gen Fund Revenues Per Student Acalanes Union High 5,546 $12,770 $13,494 Orinda Union Elementary 2,537 $11,809 $12,792 West Contra Costa Unified 30,973 $10,591 $12,537 Canyon Elementary 70 $11,914 $12,509 Moraga Elementary 1,886 $11,096 $11,913 Pittsburg Unified 11,076 $10,076 $11,911 Antioch Unified 17,874 $10,378 $11,695 John Swett Unified 1,754 $10,719 $11,418 Mt. Diablo Unified 32,005 $10,095 $11,342 Lafayette Elementary 3,576 $11,109 $11,283 Liberty Union High 8,185 $9,526 $10,958 Knightsen Elementary 534 $10,169 $10,754 Martinez Unified 4,199 $9,828 $10,493 San Ramon Valley Unified 32,255 $9,605 $10,477 Oakley Union Elementary 5,008 $9,248 $10,214 Byron Union Elementary 2,198 $9,769 $10,061 Walnut Creek Elementary 3,613 $9,676 $10,051 Brentwood Union Elementary 8,738 $9,186 $9,633

Per-ADA Revenues vs. Expenses

May Revision Estimated Affects to BUSD Budget 2016-17 Gap Reduction and loss in ADA -$74,992

May Revision Estimated Affects to BUSD Budget 2017-18 June Budget One Time Funding $0 LCAP GAP Funding $2,543,429 January Budget Change from June $417,000 $866,587 -$1,676,842 Net Increase/Decrease -$1,259,842 May Budget Change from January -$417,000 $1,649,983 $783,396 $366,396

2016-17 Second Interim Budget 12/14/2016 2016-17 Second Interim Budget UNRESTRICTED/RESTRICTED/COMBINED Unrestricted Restricted Total Budget REVENUE TOTALS $70,940,937 $13,651,386 $84,592,322 TOTAL EXPENDITURES $59,392,673 $27,550,989 $86,943,662 REVENUES VS EXPENDITURES $11,548,264 -$13,899,603 $-2,351,339 CONTRIBUTIONS -$13,278,484 $13,278,484 NET INCREASE (DECREASE) FUND BALANCE -$1,730,220 -$621,119

Multi-Year Projection Assumptions 2016-17 Budget 12/14/2016 Revenue Assumptions Multi-Year Projection Assumptions 2016-17 Budget Base Year 2016-17 2017-18 2018-19 TOTAL LCFF P2 ADA (increase of 163 ADA) 8573xx8,704 8,754 8,804 P2 ADA 8,694.87 Statutory COLA on Base Grant 0.00 1.11% 1.56% 2.42% 2.15% LCFF Gap Funding estimates: January $3,304,611 $866,587 $2,413,291 May Revise – Gap Funding $3,289,666 $1,667,842 $2,607,422 Supplemental LCFF January estimates $605,011 $116,070 $230,882 May Revise – Supplemental Funding 614,475 $231,804 $269,569 California Lottery Unrestricted (per ADA) $128 California Lottery Restricted (per ADA) $34 Mandated Block Grant $233,918 Proposed one time funding ($47 per student) $2,000,000 $417,000 $0 $0 Staffing enrollment projection = 9156 96% of 9156 = 8,789.76 5/19/17 = 9060

Expenditure Assumptions 12/14/2016 Expenditure Assumptions Multi-Year Projection Assumptions 2016-17 Budget Base Year 2016-17 2017-18 2018-19 STR's Employer Contribution Rates (2013-14 Rate 8.25%) 12.58% 14.43% 16.28% Increase STR's Employer Contribution $954,304 $867,332 $892,155 PER's Employer Contribution Rates (2013-14 Rate 11.417%) 13.38% 15.80% 18.70% Increase PER's Employer Contribution $178,837 $290,963 $351,895 Estimated Certificated and Classified Step and Column $655,671 $851,516 858,004 Increase in Liability insurance $32,674 $36,830 $0 Funding for ERATE wireless infrastructure (ERATE possible) $517,000 New Staffing as of Second Interim: 5.74 New Teaching Positions, 6.63 LCAP positions, 3 growth classified positions, 16.3 Sped positions !!   Additional staffing positions as of Second Interim: 21 SPED aides = 78 daily hours Increase in Special Education costs $1,400,000 $372,775 ???  Staffing in response to growth for 17/18 $801,732 ?? Necessary Reductions -2,200,000 -2,000,000

12/14/2016

Multi Year Projections 12/14/2016 Multi Year Projections 2016-17 2017-18 2018-19 REVENUE LIMIT $68,682,223 $69,947,133   $72,719,065 FEDERAL $2,515,455 $2,765,455 STATE $9,397,383 $7,694,491 $7,277,491 LOCAL $3,997,262 REVENUE TOTALS 84,592,323 $84,404,341 $86,759,273 EXPENDITURES Certificated Salaries 42,018,127 42,809,125 $43,605,308 Classified Salaries 11,303,646 $11,364,164 $11,425,985 Benefits 20,152,261 $21,270,374 $22,510,343 Sub Total, Salaries $73,474,034 $75,443,663 $77,541,636 Books & Supplies $2,856,536 $2,056,536 $1,281,536 Contracts & Services $9,126,521 $7,999,521 $6,774,521 Capital Outlay $625,013 80,013 $60,013 Other Outgo $956,748 Indirect Support Costs -$95,190 Total Expenditures $86,943,662 $86,656,291 $86,734,264 Revenues vs Expenditures -$2,351,339 -$2,251,950 $25,009

Multi Year Projection % by Expenditures Unrestricted 12/14/2016 Multi Year Projection % by Expenditures Unrestricted

May Revision Estimated Affects to BUSD Budget 2017-18 June Budget One Time Funding $0 LCAP GAP Funding $2,543,429 January Budget Change from June $417,000 $866,587 -$1,676,842 Net Increase/Decrease -$1,259,842 May Budget Change from January -$417,000 $1,649,983 $783,396 $366,396

Ending Balance - Reserves 16/17 17/18 18/19 Total Revenues 84,592,323 84,404,341 86,759,273 Total Expenditures 86,943,662 86,656,291 86,734,264 Net Gain/Loss (2,351,339) (2,251,950) 25,009 Beginning Balance (17) 14,040,971 11,689,632 9,437,682 Ending Balance 9,462,691 3% Reserve 2,608,310 2,599,689 2,602,028 1.2% Board Reserve 1,304,155 1,299,844 1,301,014 Restricted Reserve 3,167,052 3,420,639 4,314,608 Remaining Balance 4,610,115 2,117,510 1,245,042

Unrestricted Fund Balance – Statewide Averages 2015-16 Average Unrestricted General Fund, Plus Fund 17; Net Ending Balances as a Percentage of Total General Fund Expenditures, Transfers, and Other Uses Change From Prior Year* Elementary School Districts 21.54% 2.58% BUSD Data for 16/17 at Second Interim 11% High School Districts 17.19% 2.33% Unified School Districts 16.45% 3.36% Source: Statewide certified data *Increase relative to the reserve levels of 2014-15 $8,522,586.44 Unrestricted plus fund 17 $77,671,157 Unrestricted Expenditures, transfers, and other uses

Variables that affect Budget State Revenue Capital Gains LCFF Gap reduction Enrollment 9,063 as of 5/15 231 more 8th grade students. Projected staffing enrollment = 9,156 ADA 2017=8694 to 2017-18 projection 8754 One Time Funds and expenditures New staff costs Increasing SPED costs

Budget Guidelines BUSD will plan to maintain State Required Reserves of 3% and Board Reserves of 1.25% for a total reserve level of 4.25% BUSD will plan to maintain a “Positive” Budget Certification Defined as ability to maintain required state reserves for the current year and two subsequent fiscal years Avoids external intervention and loss of local (Board) control Current projections indicate between $4M and $5M in budget solutions are still needed by 2018-19 Based on Gov’s Jan Proposal and BUSD 2nd Interim Report

Timing and Reserve Impact Taking Action Sooner Smaller incremental adjustments may be less traumatic when implemented Larger reserves maintained in near term, more protection against future uncertainties Reduced Salary costs compound at approx. 3% per year Taking Action Later Minimizes impact on students and staff in the short term Allows for better visibility of economic challenge Depletes any reserves quicker

Timing of Cuts and Impact on Reserve Start Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 No Cuts Revenue 5,000,000 Expenditure 6,000,000 Cuts? Reserve 4,000,000 3,000,000 2,000,000 1,000,000 - Cuts Over Time Rev Exp 5,650,000 5,300,000 change (350,000) (300,000) 3,350,000 3,050,000 Immediate Cuts (1,000,000)

Next Steps Monitor State Fiscal Changes Legislature and Governor in budget process Complete Budget Development for 17/18 May Revise New Staffing! Enrollment Other increases in costs Identify Budget reductions Hard decisions ahead