1. November 13, 2014

2. November 4, 2014 Election – Passage of Proposition 2 – Prop 98 Rainy Day Reserve – Public School System Stabilization Account (PSSSA) – Effective 2015-16 Budget Adoption

3. Full Repayment of Prop 98 Maintenance factor Prop 98 must be calculated using Test 1 Prop 98 must not be suspended Capital gains taxes must be greater than 8% of State General Fund revenues – All of the above conditions must be met.

4. If met, the Cap on Reserves would be no greater than twice the minimum MVSD 3% or 6% maximum reserve levels Exemption from County Superintendents – Statement substantiating extraordinary circumstances requiring higher reserve – Provide amounts associated with extraordinary circumstances – Provide documentation that no other resources are available – *Exemption limited to two of three consecutive years

5.  Financial flexibility to absorb unanticipated expenditures without significant disruption to educational programs.  Protection against exposure to significant one-time outlays such as disasters, lawsuits, or material audit findings.  Protection against the volatility of state revenues.  Protection against the volatility of property tax revenues for basic aid districts.

6. Why have reserves greater than the minimum? Cont…  Cash management / avoiding the cost of borrowing cash.  Protection against declining enrollment.  Protection against the expiration of parcel taxes.  Protection to cover increases in fixed and statutory costs.  Financial flexibility to shift resources as priorities set through the LCAP process change.  Planning for major projects such as information technology upgrades or deferred maintenance.

7. CalSTRS Rate Projections per Education Code – Employer Contribution 2014-15 at 8.88% 2015-16 at 10.73% 2016-17 at 12.58% 2017-18 at 14.43% 2018-19 at 16.28% 2019-20 at 18.13% 2020-2021 at 19.1% Revised LCAP template to be approved November 14

8. Negotiations Federal Sequestration Reductions SMAA (Formerly Medi-Cal Administrative Activities – More information January 2015