1. N OVATO U NIFIED S CHOOL D ISTRICT October 15, 2013 Local Control Funding Formula

2. 1971 Serrano v. Priest Decision 1972 Legislature Enacts SB 90 1978 Voters Enact Proposition 13 1979 Voters Enact Proposition 4 Gann Limit 1988 Voters Enact Proposition 98 1993 Legislature Enacts SB 813 2004 Williams Lawsuit Settled 2013 Legislature Enacts AB 97, The Governor’s LCFF Reform Great Recession School Finance Timeline

3. Major Restructuring of School Finance Formula - LCFF Equity Local Decision Alignment Students of poverty English Language Learners Students in foster care Elimination of most categorical programs Elimination of Revenue Limits Local Control Accountability Plans (LCAP) With budget & student outcomes

4. LCFF = Formula Base Grant All districts receive Grade level tiers 2020-2021 target base funding Supplemental Funding 20% of base grant Students of poverty, English Language Learners, and students in foster care Unduplicated

5. LCFF = Formula Concentration Funding 55% of district population Students of poverty, English Language Learners, and students in foster care THEN 50% of base grant based on unduplicated counts of students ABOVE 55% of district enrollment NUSD does not qualify for concentration funding

6. School Funding Before & After LCFF Before LCFFAfter LCFF Revenue Limits State categorical programs with temporary tiered flexibility K-3 class size reduction limited funding with unlimited class sizes Accountability and performance process separate from funding LCFF base funding differentiated by grade level Unduplicated pupil weights, including concentration funding K-3 class size reduction, target 24:1 Local Control Accountability Plans (LCAP) required

7. School Funding Before & After LCFF Unchanged Financial Audits Compliance with Williams Act School Accountability Report Cards Federal funding, planning, and accountability requirements Funding based on ADA

8. N OVATO U NIFIED S CHOOL D ISTRICT

12. NUSD – Then and Now Going Forward 2012-2013TOTAL Revenue Limit per ADA $7,583$50,990,725 Deficit Factor.77728 Funded Revenue Limit per ADA $5,227$39,634,070 State Categorical Funding 13 programs $7,838,585 Total Revenue Limit and State Funding $47,472,655 2013-2014TOTAL Base Grant 2020-2021 Target $56,689,622 Grade Span K-3 and 9 th 2020-2021 Target $2,261,251 Supplemental Funding 2020-2021 Target $3,516,020 Concentration Funding N/A for NUSD $0 Transportation & TIIG$1,096,385 Target to be funded over 8 years ($14,252,413) LCFF Funding in 2013-2014 $49,310,865

13. LCFF Rules on Specific Programs Home-to-School Transportation and Targeted Instructional Improvement Grants as add–ons:  Districts will continue to receive 2012-2013 levels  Transportation funds used for transportation Adult Education and Regional Occupational Centers and Programs (ROCPs):  Maintenance of effort requirements for two years Joint Powers Authorities for Transportation or ROCPs:  Districts must continue for two years

14. Special Education Partnership Academies QEIA (Quality Education Investment Act) Indian Education Centers Assessment Specialized Secondary Programs Foster Youth Ag Vocational Education After School Programs Adults in Correctional Facilities State Preschool Early Childhood Education Child Nutrition 13 Categorical Programs Remain

15. To increase or improve services for students of poverty, English language learners, and students in foster care in proportion to the increase in funds apportioned on the basis of the number of unduplicated count of the students The LEA may use these funds for school-wide, or LEA-wide, purposes in a manner that is not more restrictive than the restrictions provided for in Title I of “No Child Left Behind” * State Board of Education regulations by January 31, 2014 What is Required in Statute *

16. Under revenue limits, state law provided for an inflationary adjustment based on the change in the Implicit Price Deflator, as published by the U.S. Department of Commerce  The Legislature, however, could appropriate less than the amount needed, creating a revenue limit deficit, which was tracked by the deficit factor If funded, the revenue limit COLA was provided as a specific dollar amount per ADA, which varied by type of district (elementary, high school, unified) All revenue limit districts received the COLA  Basic aid districts, however, received no state aid and therefore their annual change in funding did not correspond to the funded COLA “COLA” vs. Growth Toward Target © 2013 School Services of California, Inc.

17. Under the LCFF, base grants are adjusted annually by the same U.S. Department of Commerce index previously used to adjust revenue limits (E.C. 42238.02[d][2])  Because all of the LCFF adjustments – K-3 CSR, CTE, supplemental/ concentration grants – are tied to the base grant, these funds are increased annually by the COLA as well However, during the eight-year implementation phase of the LCFF, the change in the statutory COLA will not necessarily correspond to the change in funding received by each district  Though not explicitly identified, LCFF funding includes both COLA and funding to restore prior-year cuts A district’s annual change in funding will depend primarily upon (1) its % of eligible students and (2) its funding level in the 2012-2013 base year The LCFF “COLA” © 2013 School Services of California, Inc.

18. The increase in funding received by a district in 2014-2015 will depend upon its student demographics, its 2012-2013 base year funding level, the 2013-2014 LCFF increase, and the state LCFF appropriation in 2014-2015  The projected COLA for base grants is 1.8% for 2014-2015 The Administration has indicated that it intends to provide about $2.5 billion for LCFF in 2014-2015  This would equate to an average increase of 5.5%, well above the projected COLA  “COLA” and growth of funding will be different for each district 2014-2015 Estimated Growth Toward Target © 2013 School Services of California, Inc.

19. 2014-2015 Estimated Funding Increase © 2013 School Services of California, Inc.