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WSD Board MeetingMarch 9, 2017
Tony Wold, Ed.D.Assistant Superintendent, Business Services
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Budgeting for a school district is a continuous, year-round process. Projections continually change based on new and changing information.
June 30, 2016 Adopted 2016 17 Budget September 2016 Unaudited Actuals December 15, 2016 1st Interim Budget (Data as of October) March 15, 2017 2nd Interim Budget (Data as of January) June 30, 2017 Adopted 2017 18 Budget
Other than the presentation of the actual financial information all other budget presentations are a combination of actuals and projections for the current and upcoming year
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Budget Cycle Governors January Budget Proposal Reserves 2017 2018 Budget Development Pension Cost Increases (STRS and PERS) Multi-Year Projection
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Decreased Gap Funding Projection for 2017-2018 (from 72.99% to 23.67%) Districts are still not back to the spending authority equal
to the high funding mark in 2007-08 Reduced Proposition 98 funding attributed to 2015-
2016 and 2016-2017 by almost $1 Billion Prior year repayment for past mandate claims (one-
time approximate $48/ADA) Introduces June 2017 deferral to reduce Proposition
98 funding in the current year by almost another $1 Billion
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The National Government Finance Officers Association (GFOA) published a Best Practice report in September 2015 Recommends at least 2 months of operational expenses
(at least 17%)
Westminster Reserves will be just above 6% at the end of 2016-17
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MOODYS rating improved to Aa2Standard & Poors rating of A+ with positive outlook
Ratings Narrative Positive general fund performance with strong available general fund balance; and
Sizable fund 40 balance (special reserve fund for capital outlay projects) of about $11 million, alleviating future Capital outlay pressure.
Consistent with observations in our last review in 2016, increased resources, effective expenditure control, and implementation of programs desired by the community are contributing to improvement in the district's financial position, which is the primary factor for the upgrade to Aa2.
The district's reserve level contributes to our view of its fiscal capacity to absorb unanticipated fiscal strain and, thus, to our rating.
Factors that Could Lead to a Downgrade If the law ultimately compels the district to spend down a significant portion of its
combined assigned and unassigned general fund balances, our view of the district's credit quality could change.
Material decline in reserve levels
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Enrollment Lower Birth Rates in Orange County District intention is to maintain low class sizes and
increase ratios based upon normal attrition
Increased Expenditures Pension Costs STRS and PERS Compensation Step and Column yearly increases
State Revenue Projections LCFF gap funding is close to 95% funded Proposition 55 impact not until 2019 2020 Revenue decline minimizes positive impact of
Proposition 55 in the out-years10
Declining Enrollment has impacted the District for several years For example in 4 years since
2013 the size of K classes has decreased from 1,042 to 869
Dual Immersion is having a positive impact on enrollment Over 40 Inter-district
enrollments in 2016-2017 This is expected to increase
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Grade 2013 2014 2015 2016 2017TransK 167 246 245 226 203
K 1042 961 945 890 8691 1012 1015 964 930 8672 1016 989 991 978 9213 1022 987 986 976 9594 992 1014 969 987 9625 981 971 1005 981 9776 1033 957 968 1022 9627 988 1009 973 1005 10258 1054 989 1015 998 1016
Subtotals: 9307 9138 9061 8993 8761Pct Chg: -1.8% -0.8% -0.8% -2.6%
SDC: 338 353 345 338 336Totals: 9645 9491 9406 9331 9097
Enrollment 2013 Draft 2017
Sheet1
Totals
Grade20132014201520162017
TransK167246245226203
K1042961945890869
110121015964930867
21016989991978921
31022987986976959
49921014969987962
59819711005981977
610339579681022962
7988100997310051025
8105498910159981016
Subtotals:93079138906189938761
Pct Chg:-1.8%-0.8%-0.8%-2.6%
SDC:338353345338336
Totals:96459491940693319097
Sheet2
Fremont: School district faces $23 million budget shortfall Montebello Unified plans for layoffs must cut $15 million amid
questions about its financial management approves cuts for 252 positions
Santa Rosa considers staff cuts to address $12 million deficit San Diego Unifieds Looming Budget Cuts Now Top $124 Million Oakland: School superintendent calls for $25.1 million in cuts,
orders hiring freeze Temecula schools face $14 million deficit LAUSD will be broke by 2020 unless drastic cuts are made California schools may face cuts amid skyrocketing pension costs Santa Ana, Anaheim school districts handing out layoff notices Azusa School District Blames Governors Budget For Teacher Layoffs
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Employer Rate Keeps increasing yearly
The STRS and PERS increases are greater than the LCFF revenue increases supplied by the State = $9,692,670 more per year by 2020!
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Year STRSRate
PERSRate
CalSTRS$
Increase
CalPERS$
Increase
Total$
Increase
Cumulative $
Increase2015-2016 10.73% 11.847% $1,252,211 $207,853 $1,460,064
2016-2017 12.58% 13.888% $1,251,475 $544,268 $1,795,743 $3,255,807
2017-2018 14.43% 15.8% $1,091,600 $395,053 $1,486,653 $4,742,460
2018-2019 16.28% 18.7% $1,132,695 $593,445 $1,726,140 $6,468,600
2019-2020 18.13% 21.6% $1,174,998 $610,585 $1,785,583 $8,254,183
2020-2021 19.10% 24.9% $732,337 $706,150 $1,438,487 $9,962,670
2016 -2017 2017 -2018 2018-2019
LCFF Gap Rate Projection 55.28% 23.67% 18.00%
Projected COLA (DOF) 0.00% 1.48% 2.40%
Step & Column cost $1,055,770 $1,296,602 $1,321,155
STRS (increased rate) $1,251,475 $1,091,600 $1,132,695
PERS (increased rate) $544,268 $395,053 $593,445
Restricted Maintenance (3% contribution)
$40,737 $0 $33,925
Reserve for Economic Uncertainties (increase)
$1,516,446 $1,018,753 $79,158
Declining Enrollment (loss of revenue) $1,063,695 $607,964 $2,089,038*
Reduction of COLA (loss of revenue) $458,695 ??? ???
Special Education Contribution (SELPA) $177,579 $320,00 $320,000
Insurance (increased rate) $55,687 ??? ???
TOTAL New Expenditures $6,164,352 $4,729,972 $5,569,416
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*Estimate
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2016-17 2017-18 2018-19Revenue $105,654,908 $103,102,438 $103,081,193Expenses $106,170,330 $104,155,340 $106,152,924Difference ($515,422) ($1,052,902) ($3,071,731)Beginning Balance $25,819,321 $25,303,899 $24,250,997Ending Balance $25,303,899 $24,250,997 $21,179,266
Components of Ending Fund BalanceReserve for Economic Uncertainties $6,370,220 $7,290,874 $7,430,705Stores $20,000 $20,000 $20,000Textbook Adoptions $2,484,742 $1,461,295 $0ACA/AB1522 $350,000 $250,000 $0Revolving Cash $100,000 $100,000 $100,000Restricted Designation $9,153,299 $9,003,805 $8,892,777Facilities $247,990 $0 $0Technology $152,000 $152,000 $0Future STRS/PERS $6,425,648 $5,973,023 $4,735,784
Data as of 2016-2017 Second Interim Report
Sheet1
2016-172017-182018-19
Revenue$105,654,908$103,102,438$103,081,193
Expenses$106,170,330$104,155,340$106,152,924
Difference($515,422)($1,052,902)($3,071,731)
Beginning Balance$25,819,321$25,303,899$24,250,997
Ending Balance$25,303,899$24,250,997$21,179,266
Components of Ending Fund Balance
Reserve for Economic Uncertainties$6,370,220$7,290,874$7,430,705
Stores$20,000$20,000$20,000
Textbook Adoptions$2,484,742$1,461,295$0
ACA/AB1522$350,000$250,000$0
Revolving Cash$100,000$100,000$100,000
Restricted Designation$9,153,299$9,003,805$8,892,777
Facilities$247,990$0$0
Technology$152,000$152,000$0
Future STRS/PERS$6,425,648$5,973,023$4,735,784
Sheet2
Sheet3
There is a clear economic slowdown in CA The need for higher reserves is clear
Federal Funding to California is volatile based on the current political climate
The current Governors January Proposal reduces the funding that will be received by WSD in 2017-2018
The Governors May Revise will be the catalyst for revenue projections that will drive the State adopted budget leaving most school districts in a waiting game
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Positive = A school district that, based on current projections, will be able to meet its financial obligations for the current fiscal year and subsequent two fiscal years. Superintendents is recommending that the Board
approve the 2016 2017 Second Interim Budget Report with a Positive Certification
Qualified = A school district that, based on current projections, may not meet its financial obligations for the current fiscal year or subsequent two fiscal years.
Negative = A school district that, based on current projections, will be unable to meet its financial obligations for the current fiscal year or for subsequent two fiscal years.
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Second Interim Budget2016-2017 2016-2017 Budget CalendarSecond Interim Budget TopicsGOVERNORS JANUARY BUDGET PROPOSALReduction in Proposition 98 FundingState Revenue Trends DecliningState Reserves Continue to IncreaseCurrent Average ReservesWSD ReservesRating Agency ReportsBudget Development TrendsEnrollment TrendsBudget Headlines From Jan-Feb 2017Impact of CalSTRS and CalPERSMajor Expenditure Assumptions Out Years(At Governors January 2017 Proposal)Multiyear Projections - CombinedNext StepsCertification Definition
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