1. 2018-19 Tentative Budget Presented by:
Mark Mathers, Chief Financial Officer
Mike Schroeder, Budget Director
April 10, 2018

2. Agenda for Tentative Budget
General Fund
Update on General Fund Structural Deficit (adjusted for certain base budget changes and other changes)
Action on Budget Recommendations
Review of General Fund Sources and Applications
Other District Funds 2

3. Action Items Needed Today for General Fund1
Take action on Recommended Reductions
Approve, approve as modified or not accept
Take action on the one item with No Recommendation
(Internal Auditor)
Take action on Budget Additions
Confirm use of fund balance to cover deficit, or direct staff to seek additional reductions 2 3 4 3

4. General Fund Deficit and Budget Recommendations4

5. General Fund (in Millions)
Structural Deficit FY19
General Fund (in Millions)
FY18 Structural Deficit Carryforward
($16.6)
Revenue Increases
$3.3
Employee Salary Increments & Health Ins
($10.0)
Salary & Benefit Basis Adj
$4.9
Other Operating Increases
($1.8)
Special Education Transfer
$1.8
Structural Deficit Before Rebase/Contras
$ (18.4) 5

6. Required Action
Base budget reductions have reduced the deficit to $9.2 million.
At that amount, without additional action by the Board, the District will:
Fail to comply with the new Board Policy to have a structurally balanced budget by FY21
Deplete almost all of our fund balance by FY21. 6

7. Action Item #1 – Budget Reductions
Budget reductions were proposed by departments and represent management’s professional judgment on how to achieve savings with the least impact.
Reductions were then scored by Financial Review Committee with Leadership Team overview based on assessment of the degree of impact in relation to following criteria:
Alignment with District’s strategic plan
Degree of impact to direct instruction
Risk assessment
Fiscal impact
Availability of alternative delivery service
Perceived results of program 7

8. Where & How Do We Reduce Costs?
8 rev.

9. Addressing the Budget Deficit
Budget Reductions Do NOT Equate to Service Level Reductions
Grant Funds
Reallocation of Staff to Proper Fund
Shifts to Other Funds
Process Improvements / Work-Around’s
Review of Other Agencies’ Approaches
Use of Different Service Delivery Model
New job application software (Applitracks) may allow reduction of HR and Position Control staff in FY 2020
Reductions Through Greater Use of Automation
Central services reductions
Increases to walk zones
Professional development & training
Tolerable Reductions to Service Levels 9

10. Major Budget Recommendations
Total of $4.2 million of reductions identified, in addition to $9.2 million in base budget reductions and contra accounts
Deletion of Positions
6.05 positions shifted from General Fund to other funds
30.12 positions beginning in FY19
2.00 positions identified for FY20
Reduce District travel budgets by 50%
Increase ES and MS walk zones by ¼ mile – reduction of 8-10 drivers
Further reductions of operating budgets 10

11. Transition Plan for Deleted Positions
The preliminary budget identifies positions that are proposed to be eliminated by Fiscal Year   Some of these flagged positions are currently occupied by an employee(s).  For incumbents in these positions, below is a summary of the process that is recommended to the Board:
Professional-Technical and Educational Support Professional Positions
For Pro-Tech and ESP employees in one of these flagged positions, if that position or a comparable positon becomes vacant prior to FY , the position would be eliminated and negotiated agreements would be followed.
Human Resources and Labor Relations will assist employees to find other positions.
If there are no vacancies in a flagged position by FY , there would be a reduction in force in FY following the negotiated agreements. 11

12. Transition Plan for Deleted Positions
Certified Positions
Certified staff in one of these flagged positions would go through the regular transfer and overage process for open positions as outlined in the negotiated agreement.
Historically, the high turnover rates of certified positions for the District has allowed teachers to fill positions that have been vacated because of retirements and separations. 12

13. Changes to Feb. 28 Recommendations
Base Budget Adjustments
Upon further review, base budget adjustments in certain areas are not available and have been reversed (ROTC, Family School Partnerships, MTSS, Parent U., etc.)
In reviewing trends for energy prices, we reduced our base budget adjustment for fuel costs (gas) down from a reduction of $400,000 to only $50,000
Recommendations for Budget Reductions
Removed proposal to reduce 4.5 FTE counselor positions (although this proposal would have maintained at least one counselor per ES)
2% additional cuts to Board/Superintendent
Budget Additions
Added Fingerprint Technician position
Modified bond personnel cost 13

14. Updates to Revenue Projections
Property Taxes (District keeps 2/3 of 75-cent operating rate)
State’s Pro Forma Projection is higher than our projection in February
Results in $697,211 in greater revenues for FY19
Government Services Tax
For FY18, currently tracking at 10+ % year-over-year growth
This increases the base for FY19, but we still assume +5% growth.
Adds $614,568 to revenue projection 14

15. Summary of Budget Recommendations by Office15

16. Reductions by Functional Area
Figures shown do not include “contra” adjustments for salary savings.
16 rev.

17. Recommendations by Functional Area
Overall, Central Services/Administration is proposed to be cut 7.4%, the largest cut for any area.
16.2

18. Proposed Reductions in Instruction
EL Program
Total of EL teachers in FY18 budget
Benchmarking results to CCSD
$1,237 per student vs. $223 per student
New Service Delivery Model
Site Facilitators + training of general ed teachers
Ultimately shift from strict staffing ratio model to needs based
Staffing may increase based on actual EL enrollments in
16.3

19. Proposed Reductions in Instruction
GT Program
Total of 52 GT teachers
Reduction of 2 FTE equates to a 4% reduction
1 FTE is a GT coordinator
1 FTE based on reduced enrollment in SWAS
Depending on GT enrollment and based on adjusted State staffing guidelines, total GT staffing may increase or be flat in
16.4

20. Structural Budget Deficit FY19 (in millions)
General Fund
Revenue
$ M
Expenditures (before rebase/contras)
($481.8)M
Structural Budget Deficit (before rebase/contras)
($ 18.4 M)
Budget Rebase and Use of Contras
$ 9.2 M
Structural Budget Deficit before Reductions
($ 9.2)M
Recommended Reductions
$ 4.2 M
Deficit (before Additions)
($ 5.0)M 17

21. General Fund Budget with Recommendations18

22. Future Years
Additional reductions will be necessary in FY20 and FY21 to reach a structurally balanced budget by FY21.
Without these additional reductions, we will draw down our fund balance to below $9 million. 19

23. Addressing the Budget Deficit
In order to meet the Board’s target of a structurally balanced budget by FY21, future reductions will be necessary. 20

24. Future Structural Deficits21

25. Take action on the one item with No Recommendation (Internal Auditor)
Action Item #2 –
Take action on the one item with No Recommendation (Internal Auditor) 22

26. Action Item #2 Internal Audit Position
The Internal Audit Function reports directly to the Board.
An internal auditor position is currently vacant and a decision to keep or eliminate the position is necessary as part of the budget process.
The position is utilized to perform risk based audits to ensure cost efficiency and effective management for District operations and student activities by offering solution based recommendations. Through 2015 the department has made recommendations to save the District $3 million.
Internal auditor positions were reduced from 4 to 3 positions in FY18. 23

27. Action Item #3 – Take action on Budget Additions
Approve, approve as modified or not accept 24

28. Additional Budget Requests Action Item #325

29. Action Item #4 –
Confirm use of fund balance to cover deficit, or direct staff to pursue additional reductions 26

30. General Fund Summary Information
(Does not include budget reductions other than Base Budget changes) 27

31. FY 18-19 General Fund Revenues ($463.4 Million)28

32. FY 18-19 DSA Per Pupil Funding ($5,737)29

33. Enrollment History 30

34. FY 18-19 General Fund Expenditures
($472.6 Million) 31

35. General Fund Expenditures
The preceding slide reflects that 71.29% of our expenditures are going to schools in the following categories:
Regular, Special, Vocational, Other and Co-Curricular Instruction
Student Support and Instructional Staff Support
$42.3M of the $46.5M Transfers goes to Special Education.
Student Transportation 3.52% is for buses, fuel and bus drivers/staff for students.
Operations and Maintenance 10.14% is for Utilities, Custodians, School Police for primarily our schools.
School Administration 7.50% is for Principals, Assistant Principals and staff in the schools. Each school requires leadership and support staff for teachers & parents.
Central Support 5.13% is for Fiscal, HR, IT, Purchasing, Printing, Risk Management, Accountability, Internal Audit, Mail Services to again support the schools
General Administration represents 1.35% of the budget for the Board, Superintendent, Deputy Supt, Area Supts, Chief of Staff, Legal, Ombudsman and Community Relations. 32

36. FY 18-19 General Fund Expenditures by Type
($472.6 Million) 33

37. General Fund FTE Data 34

38. General Fund FY18-19 FTEs 35

39. General and Other Funds FTE Data36

40. Other Funds 37

41. Building & Sites Fund 38

42. Capital Projects (Bond) Funds39

43. Special Education Fund40

44. Class Size Reduction Fund41

45. Special Revenue Funds (Grants)42

46. Debt Service Fund 43

47. Internal Service Funds44

48. Enterprise (Nutrition Services) Fund45

49. All District Funds Summary46

50. FY18-19 Budget Timeline March thru June, 2018 February-March
Board Budget Work Sessions
April
April 10 - Last Opportunity for Board Approval of Tentative Budget (due April 15)
May
Public Hearing on Tentative Budget (May 22)
Last Opportunity for Board Approval of Final Budget (May 22)
June
Final Budget Due by June 8
March thru June, 2018
Continued Budget Review, Alignment with Priorities and Initiatives, Ongoing Review and Prioritization of Budget Offsets
Department of Taxation Pro Forma Ad Valorem Projections
Public Hearing on Tentative Budget
File Tentative and Final Budgets 47