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2013-14 Adopted Budget

2013-14 Adopted Budget. Walnut Valley Unified School District Board of Trustees June 19, 2013. Agenda. Recap of 2012-13 2013-14 State Budget 2013-14 Local Budget Multi Year Projections Next Steps In conclusion…… Questions?. 2. Recap of 2012-13. COLA of 3.24% Net funded COLA 1.08%

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2013-14 Adopted Budget

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  1. 2013-14 Adopted Budget Walnut Valley Unified School District Board of Trustees June 19, 2013

  2. Agenda • Recap of 2012-13 • 2013-14 State Budget • 2013-14 Local Budget • Multi Year Projections • Next Steps • In conclusion…… • Questions? 2

  3. Recap of 2012-13 • COLA of 3.24% • Net funded COLA 1.08% • K-12 Revenue Limit Deficit of 22.272% • Proposed cuts • Midyear “trigger” – shorten school year by 15 days • Average cut of $457.47 per ADA • Passage of Proposition 30 • Flat funding • Established the Education Protection Account • 21.2% of Revenue Limit funding deferred to June 2013 • Apportionment deferrals 3

  4. Recap of 2012-13 • Adopted Budget (7/1/2012) • Conditional approval by LACOE • First Interim Report (10/31/2012) • Negative Certification • Implementation of Fiscal Stabilization Plan • Furlough Days • Reductions in Force • Second Interim Report (01/31/2013) • Positive Certification 4

  5. 2013-14 State Budget • Increased revenues to Prop 98 in 2012-13 of $2.9 billion over the January proposal • Quicken the pace of deferral buy backs • $4 billion in 2012-13 • $270 million in 2013-14 • Fund a one-time augmentation for Common Core State Standards (CCSS) – in the amount of $1.250 billion • $170 per ADA (estimated) • Implementation of the Local Control Funding Formula (LCFF) - $2.1 billion • No district loses funding • Adds very restrictive accountability provisions (LCAP) • Reduced 2013-14 Prop 98 funding • Declining state revenues • Offset by reducing the amount of deferral buy back - $920 million to $270 million • Programmatic spending remains relatively unchanged 5

  6. Revenues 1.565% Statutory COLA – $243 per ADA 18.997% deficit factor $(18,764,542) annually Net funded revenue R/L change 5.85% Enrollment remains relatively “flat” 2012-13 14,440 2013-14 14,412 2014-15 14,412 Expenditures Staffing for enrollment, and step and column increases No increase on salary schedules; includes 4 furlough days Increases to statutory benefits 8.66% adjustment for the potential increase in the cost of H&W benefits in January 2014 Continued flexibility 2013-14 Local BudgetRevenues, Expenditures and Fund Balance 6

  7. 2013-14 Local BudgetRevenues, Expenditures and Fund Balance • Fund Balance (Estimated) 2012-13 • Decrease in General Fund balance in the amount of $34,593 from Second Interim • Unrestricted $165,405 • Restricted $(199,998) • General Fund unrestricted balance - $7,387,889 • Reserve for revolving cash $35,000 • Stores $245,029 • Prepaid Expenditures $311,709 • DEU (Mandated 3% reserve) $3,357,156 • Other Commitments $2,449,818 • Other Assignments (Flex) $989,177 • Represents in total a 6.60% reserve level 7

  8. 2013-14 Local BudgetRevenues, Expenditures and Fund Balance • Fund Balance (Budgeted) 2013-14 • Decrease in General Fund balance in the amount of $98,331 from 2012-13 Estimated Actuals • This represents the ongoing structural deficit, not including “transfers in” of $700,000 • General Fund unrestricted balance $7,289,558 • Reserve for revolving cash $35,000 • Stores $245,029 • Prepaid Expenditures $311,709 • DEU (Mandated 3% reserve) $3,296,898 • Other Commitments $183,657 • Other Commitments (R/L) $3,217,265 • Represents in total a 6.63% reserve level 8

  9. Multi Year ProjectionsBudget Year +2 (2013-14 through 2015-16) • Statutory COLAs: 1.565%, 1.800%, and 2.200% • R/L deficit factor of 18.997% • Approximately $(18,764,542) annual • ADA is maintained at 14,412 in the projection years • State Categorical COLAs: 0.00% all years • Special Education – 0.00%, 2.50%, and 2.70% • Includes cost of collective bargaining agreements through 2014-15 • Step and column • H & W – 8.66%, 10.00%, and 10.00% • Furlough days • Adjustments made to expenditures for one-time items; i.e. election expenses • Increase to utilities (electricity) • Structural deficits • 2013-14 $(98,331) • 2014-15 $620,207 • 2015-16 $(305,254) • Projected fund balances in the current and two subsequent fiscal years are positive, with the required 3% reserve (DEU) • Other Commitments – above 3% to mitigate loss of potential revenues or increases to expenditures • 2013-14 $3,400,922 3.09% • 2014-15 $3,328,546 3.60% • 2015-16 $3,418,244 3.19% 9

  10. Multi Year ProjectionsBudget Year +2 (2013-14 through 2015-16) Combined General Fund

  11. Next Steps • Close books on 2012-13 • Determine actual 2013-14 beginning balances (Sept) • Monitor legislative actions • LCFF Implementation • Advance apportionment with “true up” at P1 (February 2014) • Revise District Adopted Budget • Within 45 days of State Budget Adoption • Continually monitor cash flow and reserves • The combination of deferrals, ongoing expenditure increases, and the reduction of reserves is diminishing the cash cushion that we’ve been able to maintain 11

  12. Next Steps • Conference Committee LCFF Compromise • Grade span specific • Base Grant - 84% of formula (May Revision was 80%) • “Economic Recovery Payment” • 2007-08 funding levels adjusted for inflation • Supplemental Grant • 20% of base grant for low income and ELL (May Revision was 35%) • Concentration Grant • 55% of students are low income and ELL (May Revision was 50%) • Rate 50% of Base Grant above 55% threshold (May Revision was 35%/50%) • Full implementation to take 8 years (2020-21) • Target rate is funded based on annual budget appropriation • Hold-harmless provision in the budget year 12

  13. Next Steps • Local issues • Cash borrowing and liquidity • Increased cost of H & W benefits • Managing the structural deficit • Monitoring the fiscal stabilization plan • Implementation of the Affordable Care Act (ACA) • Implementation of Common Core State Standards (CCSS) • Implementation of the Local Control Funding Formula and Accountability Plan (LCFF and LCAP) • Collective bargaining – Negotiations • Land lease and sale 13

  14. In conclusion…… • 2013-14 Budget • No more cuts, and the deficit factor is slightly reduced • $1.25 billion for CCSS paid on a per ADA basis • LCFF • A pathway toward restoration of the 2007-08 base, but not until 2020-21 • More expeditious elimination of deferrals 14

  15. Questions? Sources: School Services of California, Los Angeles County Office of Education, WVUSD Prepared by: Jeanette Ullrich, Assistant Superintendent, Business Services 15

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