1. Clovis Unified Preliminary Budget Presentation to Faculty Senate February 29, 2016

2. State Budget

3. Governor’s Overall Budget Proposal
$122.6 billion General Fund budget for ($6.6 billion higher than )
$8 billion dollar budget stabilization reserve which was penniless in
State General Fund expenditures:
K %
Health %
Higher Ed %
Corrections %
Natural Resources %
Other %

4. K-12 Proposal – Overview
$71.6 billion (K-14) for Proposition 98 up $2.4 billion from
$2.8 billion increase for Local Control Funding Formula
(funding 49.08% of remaining implementation gap) ($14.8 M for CUSD)
$1.2 billion one-time discretionary funding for prior year mandated costs ($8.5M for CUSD)
$22.9 million for categorical programs’ COLA (0.47%) ($100k for CUSD, which is for special education COLA)
$1.6 billion for an Early Education Block Grant (no additional funding for CUSD over )

5. State Revenues
Governor assumes about 6% growth in GF revenues (Governor’s budget proposal over Budget Act)
Personal Income tax 7.9% (+$6.14 billion)
Sales and Use tax 2.8% (+$0.7 billion)
Corporation Tax 5.9% (+$0.62 billion)
Capital gains revenue remains highly volatile
Prop 30 revenues will taper off
Quarter-cent sales tax increase expires end of 2016
Personal income tax increase (high-earners) expires end of 2018
Initiative to extend the proposition on November ballot
Source: School Services of California, January 2016

6. Proposition 30 Revenue Gain and Loss

7. 2016-17 Governor’s Budget General Fund Budget Summary
Prior-Year Balance
$3,699
$5,172
Revenues and Transfers
$117,537
$120,633
Total Resources
$121,236
$125,805
Total Expenditures
$116,064
$122,609
Fund Balance
$3,196
Budget Reserve:
Reserve for Encumbrance
$966
Reserve for Economic Uncertainties
$4,206
$2,230
Budget Stabilization Account
$4,455
$8,011
Total Available Reserve
$8,661
$10,241
Revenues and transfers increase 2.6%, while expenditures increase 5.6% in
The State Budget proposes more than $8 billion in the Budget Stabilization Account, which was penniless in
The reserve for economic uncertainties, which was -$1.7 billion as recently as , hits a high water mark
Source: Governor’s Budget Summary, pg. 14

8. State General Fund Revenues (In Billions)

9. State Cap on District Reserves
The County Superintendent may grant an exemption from the Cap for two consecutive years out of three under “extraordinary fiscal circumstances”, but the district must:
Provide documentation that substantiates the circumstances
Identify the funds associated with those circumstances
Document that no other funds are available for that purpose
When is the Cap triggered?
Only after current Prop 98 Maintenance Factor is paid off (est )
Only in a Prop 98 Test 1 year (1988, 2011, 2012, 2014, 2015)
Only if you do not have an exemption from your COE

10. © 2016 School Services of California, Inc.

11. Distributing the 2015-16 funds through the consortia plan to the LEAs
Adult Education
The Adult Education Block Grant provided $500 million in ongoing funding beginning in the budget year to restructure adult education programs (CUSD = $1.8M, annually beginning in budget year )
Distributing the funds to LEAs based upon the funds spent in for adult education services
Establishing
regional consortia to improve coordination and better serve the needs of adult learners within each region
Distributing the funds through the consortia plan to the LEAs

12. Career Technical Education
California Partnership Academies, Agricultural Incentive Grants and Supplemental Secondary Grants remain stand-alone categorical, but receive no COLAs
Career Pathways Trust Grants (CUSD = $2,573,811 through June 2017)
CTE Incentive Grant Program (CUSD = $2,467,786 through June 2017)
$400 million one-time for
$300 million one-time for
$200 million one-time for
Funds staff and administrator for 3 years…..administrator Ruth Desanto

13. Mandated Programs
LEAs that opt into the Mandated Block Grant can plan for the below rates per ADA in all three years of the multiyear projection (MYP)
Total Mandate Block Grant Revenue = $1.4M
The discretionary funds proposed in to pay prior-year mandate claims are earmarked as payments for the oldest mandates. The revenue projection should be based on P-2 ADA projections
$214 per ADA (estimated)
Current projection for CUSD is $8.5M for (one time only)
Grade Span
School Districts
CUSD
K-8
$28 per ADA
$787,332
9-12
$56 per ADA
$674,856

14. Mandated Block Grant Expenditure Plan 2016-17

15. What is not included in State Budget?

16. What’s Not in the State Budget?
Unfortunately, many critical issues are missing from the Governor’s State Budget proposal:
No new funding to address the increased employer contributions to the California State Teachers’ Retirement System (CalSTRS) and California Public Employees’ Retirement System (CalPERS)
No new funding for transportation
No proposal for a statewide school facilities bond or program, although Governor Brown notes his perceived downsides of the current school facilities program
No new funding for Special Education, other than the 0.47% COLA

17. School Facilities
There will be a $9B Facilities Bond on the November 2016 ballot, unless the Governor is successful in negotiating a deal. The breakdown of the funds is as follows:
$3B New construction, K-12
$3B Modernization, K-12
$2B Capital Outlay Financing, California Community Colleges
$500M Provide school facilities to Charter Schools
$500M Provide facilities for Career Technical Education programs
CUSD qualifies for an estimated $80M under the current State Facilities Program if this initiative passes

18. 2016-17 Preliminary Budget Projections CUSD General Fund

19. General Fund – Assumptions for 2016-17
Projected increase of 480 ADA
LCFF Gap Closure percentage of 49.08%
Unduplicated Pupil percentage of 42.33% (CUSD 3-year average)
Determines LCFF Supplemental Grant funding
0.47% COLA

20. What’s Ahead?

21. Enrollment – ADA Projections

22. CUSD keeping the system going Revenues
LCFF additional revenues
State COLA of .47%
$ 1,500,000
ADA Growth of 480
3,400,000
Unduplicated Pupil % Change
(110,000)
Gap Closure of 49.08%
14,800,000
Special Education COLA of .47%
101,000
Other Ongoing Changes
104,000
Total Ongoing Revenues
$19,795,000

23. CUSD keeping the system going Expenditures
480 ADA Growth APUs – APUs
$ 3,213,600
Step and Column, offset by Attrition
1,040,400
Minimum Wage impact for only
26,200
Boris Elementary Operating Expenditures
686,000
Special Education Growth
3,900,000
Organizational Capacity
400,200
Affordable Care Act (potential) impact
300,000
State mandated STRS and PERS increases
3,366,000

24. CUSD keeping the system going Expenditures
Transportation, related to Boundary Change
$ ,000
LCAP Supplemental Programs
4,178,500
Facility Standards
500,000
Routine Restricted Maintenance
74,100
Utility Costs (net of rate increase & PPA savings)
(250,000)
Textbooks
800,000
Other Adjustments
(571,400)
Total Ongoing Expenditures
$18,246,000

25. CUSD keeping the system going Summary
The following takes into consideration all additional ongoing revenues and expenditures for the fiscal year: Total additional ongoing revenues $19.8M Total additional ongoing expenditures $18.2M Surplus $ 1.6M / Estimated Prior Year Structural Deficit ($ 3.1M) Net Structural Deficit ($ 1.5M) Net one-time adjustments $ 9.3M Net Surplus $ 7.8M

26. General Fund Multi Year Projection

27. Employee Compensation
Salary schedule adjustments are not included in the preliminary budget projections and multi-year projection.
Cost of 1% is estimated at $2.4M

28. Budget Calendar Feb 4 LCAP Parent Night
Feb 24 Preliminary Budget Presentation to Governing Board
April 7 LCAP Parent Night
May 7 Final LCAP recommendations are made to Governing Board
May 11 Governing Board Public Hearing
May 12 Governor’s May Revise Proposal
May 18 School Services of California May budget revise workshop
May 18 Finalize budget document
June 10 Budget copy available for public review
June 15 LCAP approved / Budget adopted by Board

29. Meritorious Budget Award For the 18th Consecutive Year

30. Solar Example Only – Actual array pending bids

31. Pensions - STRS 60 62
The final plan has a smaller employer contribution rate increase in and consistent increases up to final implementation
Once the statutory rates are achieved, CalSTRS will have the authority to increase or decrease the employer and state contribution rates
PEPRA Effective Date: January 1, 2013
Year
Employer
Pre-PEPRA
Employees
Post-PEPRA
8.88%
8.15%
10.73%
9.20%
8.56%
12.58%
10.25%
9.205%
14.43%
16.28%
18.13%
19.10%

32. STRS Pension Reform
The basic age factor for members under CalSTRS 2% at 60 is 2 percent at age 60 (the age factor gradually decreases to 1.1 percent at age 50 if you retire before age 60, and increases to a maximum 2.4 percent at age 63 if you retire after age 60). 
The age factor for members under CalSTRS 2% at 62 is 2 percent at age 62 (the age factor gradually decreases to 1.16 percent at age 55 if you retire before age 62 and increases to a maximum 2.4 percent at age 65 if you retire after age 62).
Other benefit differences for CalSTRS 2% at 62 please refer to STRS

33. Consult your STRS representative

34. Consult your STRS representative
Consult your STRS representative

35. CalPERS Rate Increases – Actual and Projected
Pensions - PERS
CalPERS Rate Increases – Actual and Projected
The employer contribution to CalPERS is increasing from % in to % in
“Classic” members continue to pay 7.00%
New members pay 6.00%, which may fluctuate from year to year based on the PEPRA requirement to pay half the normal cost rate
Estimates of the resulting future contribution rate increases for school employers are as follows: 55 62
Actual
Projected
11.771%
12.6%
15.0%
16.6%
18.2%
19.9%
20.4%

36. Thank you