1. Huntington Beach City School District Local Control Funding Formula Overview
Presented by:
Maureen Evans, Vice President School Services of California, Inc.

2. Funding Per Average Daily Attendance (ADA) – Actual vs
Funding Per Average Daily Attendance (ADA) – Actual vs. Prior Statutory Level

3. Local Agency Reserves Higher If: Lower If: Declining enrollment
Question: What should the target percentage be?
Answer: It depends on the following factors:
Higher If:
Lower If:
Declining enrollment
Fast growth
Deficit spending
Inconsistent between years
Potential audit or legal costs
Smaller district
Basic aid
State Budget volatility
Ending balance is consistent between years
ADA doesn’t change much
The community doesn’t change much
Carryover categoricals are under control
Employee contract obligations are covered
Funding sources are stable

4. Unrestricted Fund Balance – Statewide Averages
Unrestricted General Fund Balance Plus Fund 17 Special Reserve as a Percent of the Total General Fund
Unified School Districts
15.44%
Elementary School Districts
23.75%
High School Districts
19.79%
Huntington Beach City School District (SD)
23.80%
Source: California Department of Education (CDE) state-certified data

5. Declining Enrollment – Budget Impact4
Impact of ADA Decline
Income Loss
114 ADA decline at $5,000 each – yields marginal revenue loss
Lost Revenue: $570,000
Proportional Layoff
120 students requires 5 teachers at 24:1
Five teachers times cost per novice teacher yields savings of: $250,000 ($50,000 per teacher, including benefits, x 5 teachers)
Miscellaneous savings ($400/ADA) $48,000
Total proportional savings: $298,000
Proportional layoff leaves $272,000 deficit. In this example, 11 teachers would need to be laid off to cover the decline. Program cuts would be required.

6. The State Budget
The Legislature passed and Governor Jerry Brown signed an on-time Budget for , the third time in as many years
Passage of Proposition 30 in November of 2012 provides stability for the State Budget – but only temporarily – the taxes are temporary
The majority party Democrats control the entire Budget process, and the Budget was passed without much drama
Temporary taxes and additional revenue from a slightly stronger economy eliminated the need for gimmicks and overly aggressive assumptions
This year, the Local Control Funding Formula (LCFF) is the Governor’s big win
The last major revision of the education funding system was 40 years ago when Senate Bill (SB) 90 (Chapter 1406/1972) established revenue limits and categorical programs
LCFF is evolving, but will have a huge impact on negotiations

7. Proposition 30 – The Schools and Local Public Safety Protection Act of 2012
Proposition 30, the Schools and Local Public Safety Protection Act was sponsored by Governor Brown
Education organizations that supported the measure include: California Teachers Association, California Federation of Teachers, California School Boards Association, Association of California School Administrators, and California School Employees Association
Temporarily increases the state sales tax and personal income tax for high-income earners
Sales tax increase of 0.25% will expire in 2016
Personal income tax increase will expire in 2018

8. Proposition 30 – The Schools and Local Public Safety Protection Act of 2012
Generates $6.8 billion to $8.5 billion in and $5.4 billion to $7.6 billion each year thereafter
Revenues from tax increases will fund the Education Protection Account, which will offset state aid toward school district funding
Will also make permanent the sales tax shift to fund county government realignment

9. Proposition 98 and Local Control Funding Formula (LCFF)
It is important to remember that Proposition 98 establishes the minimum funding level for K-14 education
The Legislature and the Governor decide on an annual basis at what level to fund the various education programs
In most cases, state statutes specify districts’ entitlements to state funding based on the delivery of educational services
The LCFF is the model by which state funds are allocated to school districts, charter schools, and county offices of education (COEs)
Unlike revenue limits and Tier III categorical programs, there are no state statutes that specify an annual appropriation to support the LCFF
This makes multiyear planning very difficult
A district’s annual LCFF entitlement will be determined by “any available appropriations” (Education Code Section [b][3])

10. LCFF – What it Does
The LCFF makes fundamental changes to how we allocate state Proposition 98 revenues to schools
There are direct parallels with how we have funded schools in the past
The LCFF base grants are like revenue limits
The LCFF base grant adjustments – Class-Size Reduction (CSR), Career-Technical Education (CTE), supplemental grants, concentration grants – are like categorical programs
At full implementation, the LCFF will fund every student at the same base rate
Over time, most school district and charter school base grant funding will equalize to the same level
The LCFF provides that each school district receive at least as much state aid in and future fiscal years as the district received in

11. Categorical Programs
A partial list of the 40 categorical programs rolled into the Base Grant
CSR (K-3)
Deferred Maintenance
Economic Impact Aid (EIA)
Gifted and Talented Education
Regional Occupational Centers/Programs

12. Categorical Programs and the LCFF
Over the years, a variety of programs and purposes were supported by categorical program funding
Some were general purpose, such as instructional materials and deferred maintenance
Some were intended to be targeted to meet the needs of specific students or circumstances, such as EIA and Home-to-School Transportation
The LCFF replaces most categorical programs with two weighting factors applied against the LCFF base grant
20% on behalf of each eligible student
An additional 50% for the eligible students exceeding 55% of total enrollment

13. Percent of Free and Reduced-Price Meals Percent of English Learners
Percentage of District Enrollment of Free and Reduced-Priced Meals and English Learners
Percentage of District Enrollment of Free and Reduced-Priced Meals (FRPM) and English Learners
District
Percent of Free and Reduced-Price Meals
Percent of English Learners
Rosemead Elementary
86.54%
35.88%
Lennox Elementary
85.35%
46.77%
Hawthorne Elementary
85.34%
35.94%
Anaheim City Elementary
83.91%
54.61%
Ontario-Montclair Elementary
83.06%
44.78%
Lawndale Elementary
82.96%
37.30%
Magnolia Elementary
81.65%
49.23%
South Whittier Elementary
73.66%
42.61%
Buena Park Elementary
71.47%
40.92%
Westminster Elementary
71.31%
49.56%
Whittier City Elementary
68.49%
19.84%
Little Lake City Elementary
67.22%
17.67%

14. Percent of Free and Reduced-Price Meals Percent of English Learners
Percentage of District Enrollment of Free and Reduced-Priced Meals and English Learners
Percentage of District Enrollment of Free and Reduced-Priced Meals (FRPM) and English Learners
District
Percent of Free and Reduced-Price Meals
Percent of English Learners
La Habra City Elementary
66.85%
38.93%
Savanna Elementary
64.37%
44.10%
Centralia Elementary
58.49%
33.36%
All Elementary Districts
56.14%
27.59%
East Whittier City Elementary
52.64%
14.04%
Ocean View Elementary
38.11%
23.21%
Lowell Joint Elementary
33.40%
11.78%
Cypress Elementary
30.39%
24.00%
Fountain Valley Elementary
22.54%
10.13%
Huntington Beach City Elementary
17.03%
5.91%

15. LCFF – Base Grant Entitlement Calculation
target entitlement calculation
Grade span per-pupil grants, based on statewide average initial target of $7,357 per ADA, are increased annually for a COLA
Factors
K-3
4-6
7-8
9-12
Base Grant per ADA
$6,845
$6,947
$7,154
$8,289 %
$107
$109
$112
$130
Base Grants –
$6,952
$7,056
$7,266
$8,419
T A R G E T

16. LCFF – K-3 CSR and CTE Adjustments
target entitlement calculation
K-3 CSR and 9-12 CTE adjustments are additions to the Base Grant
CTE is unrestricted; CSR requires progress toward maximum site average of 24 students enrolled in each class
Factors
K-3
4-6
7-8
9-12
Base Grants –
$6,952
$7,056
$7,266
$8,419
Adjustment percentage
10.4% CSR -
2.6% CTE
Adjustment amount
$723
$219
Adjusted grant per ADA
$7,675
$8,638
T A R G E T

17. LCFF – Supplemental and Concentration Grants Per ADA
target entitlement calculation
Supplemental and concentration grant increases are calculated based on the percentage of total enrollment accounted for by English learners, FRPM program eligible students, and foster youth
Factors
K-3
4-6
7-8
9-12
Adjusted grant per ADA
$7,675
$7,056
$7,266
$8,638
20% supplemental grant
$1,535
$1,411
$1,453
$1,728
50% concentration grant (for eligible students exceeding 55% of enrollment)
$3,838
$3,528
$3,633
$4,319
T A R G E T

18. LCFF – Minimum and Maximum Target Grants Per ADA
target entitlement calculation
Grant amounts vary from a minimum based on no students eligible for supplemental and concentration grants to 100% of student enrollment qualifying
Factors
K-3
4-6
7-8
9-12
Minimum grant per ADA
$7,675
$7,056
$7,266
$8,638
Maximum grant per ADA
$10,937
$10,055
$10,354
$12,310
Difference ($)
$3,262
$2,999
$3,088
$3,672
Difference (%)
42.5%
T A R G E T

19. LCFF – Grade Span Grants Per ADA

20. 2013-14 District LCFF Entitlement
A district’s LCFF entitlement for will be based on its base year funding level, its LCFF target, and the statewide funding provided to move toward the target
The state factor of 12% of growth toward target is based on the appropriation of $2.1 billion and the estimated statewide funding gap of $17.5 billion
Low
Medium
High
Base
$6,500
LCFF Target
$8,000
$9,100
$11,300
Difference
$1,500
$2,600
$4,800
State Factor
12%
Increase
$180
$312
$576

21. Growth Toward Target
$576
$312
$180

22. An Example of Gap Funding Per ADA
Total Gap
$7,858
- $5,929
$1,929
x 28.05%
$548
Target
Total gap
$2.1 Billion
Inc.
$7,858
$7,564
$294
Dollars per ADA
$6,477
$3,787
$5,882
$47 EIA
$548
$69 Supplementation and Concentration Grants
$479 Base
$5,929
$5,882
LCFF
$47 EIA
$294
-$47
$247
x 28.05%
$69
Supp/Conc
EIA
Net gap
Closure
Supp/Conc share
Proj Funding
Target
Economic Impact Aid
LCFF Increase
Supplemental and Concentration Grants
Target Base
© 2014 School Services of California, Inc.

23. LCFF Implementation Phase
There are two distinct phases of the LCFF: (1) the eight-year implementation phase, and (2) the fully funded phase
The eight-year implementation phase is not set in statute and can be longer or shorter than eight years, depending upon the annual LCFF appropriation
Numerous fiscal inequities could arise during the implementation phase
Even if the state appropriates sufficient funds to support the statutory COLA applied to the Base Grant, individual districts are not guaranteed a funding increase equivalent to this adjustment
Significant revenue volatility will be imposed on districts with high proportions of students eligible for supplemental/concentration grants
Once the LCFF is fully implemented, these funding anomalies will be eliminated

24. Proposition 98 Forecast

25. Percent of LCFF Components for Huntington Beach City SD (Administration Projections)
Base
Supplemental and Concentration

26. What Does the Future Look Like for Huntington Beach SD?
Multiyear Projections Analysis
Estimated LCFF Funding
$5,929
$6,477
$6,775
$6,905
SSC Recommends
$6,607
$6,751
Net Change Per ADA
$249
$548
$130
$144
Net Percent Change
4.34%
9.24%
2.01%
2.19%

27. Differential Risks – An Example

28. State Board of Education (SBE) Actions and Timeline
Adopt Budget Standards and Criteria
1/1/14
Adopt Spending Regulations
Adopt Technical Assistance
and Intervention
Evaluation Rubric
10/1/15
1/31/14
Adopt Local Control
Accountability Plan (LCAP)
Templates

29. Adopting and Updating the LCAP4 3 2 1
Adoption of the plan:
Adopted concurrent with the local educational agency’s (LEA) budget
Submitted to COE for approval
Posted on district website
COE posts LCAP for each district/school or a link to the LCAP
Opportunity for public input:
Notice of the opportunity to submit written comment
Public hearing
The superintendent must respond in writing to comments received
Present for review and comment to:
Parent advisory committee
English learner parent advisory committee
The superintendent must respond in writing to comments received
Consultation with:
Teachers
Principals
School personnel
Pupils
Local bargaining units

30. State Priorities State Priorities Credentials/Materials
Pupil Engagement
Pupil Outcomes
School Climate
State Priorities
Parental Involvement
Adopt Standards
Pupil Achievement
Course of Study
Expulsion Coordination
(COE only)
Foster Student Services
(COE only)

31. Proportionality and Targeted Funds
The LCFF statutes direct the SBE to develop regulations by January 31, 2014, to require LEAs to:
Increase or improve services for eligible pupils in proportion to the increase in funds apportioned on the basis of the number and concentration of eligible pupils
LEAs are also required to include in their LCAP a description of expenditures that serve pupils eligible to generate supplemental and concentration grants
Goals, activities, and services that increase or improve support for eligible students is a local decision
The proportion of the increase in funds attributable to the number of eligible pupils enrolled is a calculation
It is important to keep this distinction in mind, and it is why we are calling supplemental and concentration grant funding targeted, rather than restricted

32. SBE Regulations
SBE regulations provide a method of calculating the proportional share of LCFF dollars that are attributable to supplemental and concentration grants each year
Proportionality calculation and the LCAP was approved by the SBE on January 16, 2014
Calculation of proportional increase for supplemental and concentration grants is specific
LCAP is flexible, providing significant local control over services, activities, and plan content

33. Use of Supplemental/Concentration Grants
The LCFF regulations provide districts varying degrees of latitude in the expenditure of supplemental/concentration grant funds, depending upon the percentage of eligible students
If the district has unduplicated counts of the following:
Greater than 55%, then these funds may be spent on a districtwide basis, provided the district
Identifies the districtwide services
Describes how these services meet the district’s goals for the targeted students in the state priority areas

34. Use of Supplemental/Concentration Grants
Less than 55%, districtwide expenditure of these funds is authorized, provided the district
Identifies the districtwide services
Describes how these services meet the district’s goals for the targeted students in the state priority areas
Describes how these services are the most effective use of the funds

35. Use of Supplemental/Concentration Grants
The regulations also address school site enrollment and the authorized use of these funds
A district that has a school with an enrollment of eligible pupils in excess of 40% of the school’s total enrollment, the district may expend the targeted funds on a schoolwide basis, provided the district:
Identifies the schoolwide services
Describes how these services meet the district’s goals for the targeted students in the state priority areas

36. Use of Supplemental/Concentration Grants
A district that has a school with an enrollment of eligible pupils less than 40% of the school’s total enrollment, the district may expend the targeted funds on a schoolwide basis, provided the district:
Identifies the schoolwide services
Describes how these services meet the district’s goals for the targeted students in the state priority areas
Describes how these services are the most effective use of the funds

37. Governance in the Past
School district governance is coming full circle
In the recent past, school district governance has evolved from:
Pre-Serrano (1971) – local property taxes funded local schools and local boards governed
Local boards made the rules
Post-Serrano (1972) – SB 90 established revenue limits as a base for all students and categorical programs to deal with special needs
Local boards had to conform to the state’s rules
Post-Proposition 13 (1979) – property taxes are out, the state becomes the primary funder for education
Local boards lose authority and basically administer state-driven and funded programs
LCFF (2013) – funding levels and state priorities are reflected in the LCFF
Most governance and policy issues are returned to local boards and embodied in the LCAP
We have come full circle

38. Questions and Answers Change
Old rules:
How much money is in categorical programs?
What are we allowed to use it for?
How do we comply with state law?
What are the audit requirements and penalties?
New rules:
What priorities have we set with our community?
Have we defined student expectations and outcomes. as well as key elements of operation of the program?
What do our professional teachers, administrators, and classified employees advise?
How will we measure success?
What alternative programs get a “no” in order to give this one a “yes”?
The motive and tone of the discussion changes – we think for the better

39. To Act Differently. We Must Think Differently
Old System
State of California
New System
Board Revises
Policy
Results Reported to Public
Local Board
Empowers Schools
State Provides Funding
Local Board Sets Policy
Community Involvement
Focus on
Students
Policy
Funding
Program Rules
Local Board Implementation
School Site Performance
Audits and Compliance Reviews
Student Achievement
Compliance Model
Empowerment Model

40. Linkage Between Policy and Performance
State Policy and Goals for Public Education
Local Board Develops Goals, Plans, and Methodology
LCAP – Specific Plan of Attack
District and State Testing and Assessment
Local Evaluation of Results
Focus on Student Needs
Grand Strategy
and Goals
School Agency Strategy
Tactics
Revision of the Plan
Performance
Evaluation

41. Conceptual Planning Matrix
Planning Components
Community Involvement
Technology
Professional Development
Assessment
Facilities
Materials
Policy
Delivery
Strategic
LCAP
Common Core EL
Title I    
Planning Requirement      
Component Required 
Most Restrictive

42. Thank you!