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San Marino Unified School District Business Services Presents

San Marino Unified School District Business Services Presents. San Marino Unified School District Budget Study Session April 17, 2007 Julie Boucher Assistant Superintendent, Business Services

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San Marino Unified School District Business Services Presents

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  1. San Marino Unified School District Business Services Presents

  2. San Marino Unified School District Budget Study Session April 17, 2007 Julie Boucher Assistant Superintendent, Business Services Special thanks to Vangie Lingat and John Ziegenhohn for their assistance with this presentation.

  3. The Economy is Doing Well – but Stay Tuned • The economy is doing well – but we’re beginning to see signs of weakness • Jobs, consumer spending, and business spending remain strong – however, we are beginning to see a slowing trend • The stock market is still near record levels • Energy prices are increasing • Housing market has slowed • Legislative Analyst forecasts 2007-08 Budget deficit of $2.0 billion • State-wide decline in student enrollment • Lottery sales down

  4. Governor’s May Revise Preview • California Schools are funded 30-40% below other States – it would take $15 billion to bring us up to the average. • State Revenues are down YTD (tax collections, personal income taxes, and corporate taxes). April tax collections will determine basis for 2007-08 revenue projections. • Governor is proposing to add transportation dollars to Proposition 98 - which lowers the base funding in the budget year. • 2007-08 is looking like a straight forward year – COLA for all State revenues, no additional equalization aid or deficit reduction funding. • 2008-09 is a concern – the deficit factor could return.

  5. K-12 Revenue Limits • 2007-08 Statutory COLA 4.04% • Equal to $225 per Student (3,192 ADA) or $718,000 • No additional funding for districts with declining enrollment • In any given year of decline, the State allows school districts to use the prior year P2 ADA for revenue limit calculations. However, in the subsequent year, the District’s revenue limit is reduced permanently.

  6. Proposition 98 Primer • Under Proposition 98, Education is entitled to a determined percentage of State revenues with certain caveats, categorized as “Tests”: • Test 1: Education received at least 34.6% of State revenues (this test has never been used because of the percentage of the State’s General Fund is well over the minimum) • Test 2: Education receives the same amount as the previous year, plus enrollment growth and inflation adjustment based on growth in per capita personal income. We are currently in Test 2. • Test 3: Same as Test 2 except the inflation adjustment used is the annual change (increase or decrease) in per capita State General Fund revenues plus ½ percent. Applied in difficult years; applies a deficit factor to Education funding. • Source: Ed Source Resources 2006

  7. COLA History and Projections

  8. Federal Funding in 2006-07 • From 2005-06 to 2006-07 Federal Revenues have been reduced. Although, Federal revenues are projected to remain constant in 2007-08, the basis for funding (i.e. number of limited English proficient students) has declined and thus, the District’s Federal revenues may decrease further in 2007-08. • Note: The District receives very little Federal revenue in comparison to other school districts. Total Federal revenues in 2006-07 = $120,153 (excluding IDEA Special Ed. funds).

  9. San Marino Unified School DistrictEnrollment and ADA Trends & Projections *Projected

  10. Enrollment Trends by Site

  11. Inter-district Transfers Trend In 2006-07, it is estimated that the District received $1.5m based on the number of inter-district transfers, many of which are children of District staff members.

  12. Staffing Trends – Number of Teachers by Site

  13. San Marino Unified School District Revenue Sources The District is dependent on the State for approximately 80% of its revenues.

  14. State Lottery Expected Ongoing $’s in 1988 $148 per ADA (proj.) $148 per ADA (est.)

  15. 2006-07 School Site Block Grants - Update • DISTRICT – one-time grant • $19 per student or $65,082 received in one-time funding. Amount transferred to the Deferred Maintenance Fund to fund gym improvements at Huntington Middle School and the High School. • SCHOOL SITES – one-time grants • Arts & Music Block Grant (6760) - $16 per student, ongoing – The Asst. Supt of Instruction is working with School Principals on a plan for expending the funds in the areas of arts and music. • Discretionary Block Grant (7396 and 7397) - $59 per student, one-time - allocation determined by the School Site Councils (SSC’s). Schools will use the funds for textbook needs. • Instr. Material, Library Materials and Ed. Tech Grant (7398) - $16 per student, one-time – allocation determined by the Principals with input from the School Site Councils. Schools will use the funds for textbook needs. • Arts & Music, Physical Education Supplies, Equipment & Professional Development Grant (6761) – Est. $82 per student, one-time. Awaiting funds and program information from CDE and LACOE . The Asst. Supt of Instruction is working with School Principals on a plan for expending the funds in the areas of arts, music and physical education. • Note: These funds must supplement (not supplant) current programs in place at the schools.

  16. Mandated Cost Revenues • The District has received reimbursement for mandated costs, which were not paid by the State (2001-02 – 2005-06) • Funds are one-time non-recurring • State Controller’s Office has received additional funding for audit staff to audit individual school district’s revenues received • Some school districts have had to return funds • LACOE and SSC have urged Districts to reserve these funds for three years from receipt of funds. • LACOE and SSC are also recommending that the District’s set a portion of these funds aside for Other Post Employment Benefits (SMUSD must comply as of July 1, 2008). • Funding Year Amount Received Reserved Until • 2005-06 $ 16,297 2008-09 • 2006-07 $566,404 2009-10 • 2006-07 $13,738 2010-11

  17. San Marino Unified School District Expenditures Over 80% of the District’s Budget Is committed to salaries and benefits.

  18. Undesignated Ending Balance History Note: In 2002-03, $277,759 represents planned savings due to unfilled positions, a freeze on classified substitutes, limits on supplies, services, conferences, etc. These funds were committed to funding the ongoing costs of the “Save Our Schools” Program.

  19. Reserve for Economic Uncertainties

  20. Reserve Needs 2006-07 • Legal Fees & Maintenance and Operations Supplies, Services and Repairs $300,000 • Lottery Revenues – Due to a decline in tickets sales, K-14 lottery revenues were cut by the State in April 2007 by $52,316 • Adopted State Budget (per ADA $’s) • Unrestricted $125.25 • Restricted $27.90 • Revised State Budget (April 2007) • Unrestricted $118.00 • Restricted $19.00 • The Reserve for Economic Uncertainties must be restored to 3% ASAP.

  21. Legal Fees 2006-07 • Special Education $ 20,000 • Personnel Matters $104,000 • Claims $ 64,000 • Negotiations $ 6,400 • Real Estate/Construction $ 20,000 • Board Policies/Counsel $ 24,000 • Total Expd to-date $238,400 • 2006-07 Projected Total $250,000

  22. M& O Expenditures 2006-07 - Supplies, Services & Equipment • Custodial Supplies $60,000 • Grounds Supplies $40,000 • Maintenance Supplies $135,000 • Operating Services $190,000 • Major Repairs $260,000 • Girl’s Field House sewer pump/tank • Boiler system repair & replacement • HVAC needs & repairs • Fencing needs – HS, Val, • Irrigation and field improvements • Electrical upgrades • Carpeting/flooring needs • Gym bleacher repairs • Equipment (computers, carts, containers) $30,000 • 2006-07 Total Expd. to-date $715,000 • 2006-07 Projected Total $765,000 • Special Note: in 2001-02 and 2002-03, M&O supplies, services and repairs budgets was cut by 30%. These costs have not been restored since the reductions.

  23. 2007-08 Budget Planning Considerations • 2007-08 projections reflect a estimated decline of 135 students • If enrollment declines by 135 students, revenues in 2008-09 will decrease by $760,000. • If excess funds are received from the San Marino Schools Foundation, it is recommended that these funds be reserved to offset the loss of revenue. • Actual enrollment figures – October 2007 • If actual enrollment matches projections, budget reductions will be necessary in planning for 2008-09. • Classroom teacher staffing needs TBD Maintaining lower class sizes Programmatic Needs TBD

  24. 2007-08 Budget Planning Considerations • Aligning the Board’s Goals with the District Budget: • How will salary and benefit compensation increases (step and column and salary increases) be funded? • 1% increase in salary compensation = $214,000 • 1% increase in COLA = $177,000 • 1% increase in COLA does NOT equal a 1% increase in salary compensation • How will District’s share of premium increases be funded? • How will step and column costs (est @ $260,000) be funded? • Will there be savings due to attrition and retirements? • What are the staffing needs to maintain lower class sizes or to comply with programmatic policies for 2007-08? • How will we offset the loss of revenues due to declining enrollment? • What are the core needs of the District? • How will those needs be funded?

  25. Key Budget Factors • San Marino USD is the second smallest unified school district in Los Angeles County • Our student to teacher ratios, particularly at the High School level are lower than other school districts • Over 60% of the certificated teachers have 15 years of experience or more and 30% have more than 20 years of experience. • Average teacher’s salary is $65,700; however in comparison to other school district’s our mid-range and most experienced teachers are paid less than comparative school districts. • We have made a commitment to lower class sizes and as a result, the District’s overall teacher to student ratio is much lower than comparison school districts. • Yes we receive parcel tax revenues and annual contributions from our Schools Foundation however, we are still below total revenues of other unified school districts by approximately $1,000 per student.

  26. 2007-08 Unallocated Funding Sources

  27. 2007-08 Required Needs • From the $500,000 in Unallocated Funds the following budgets will require increases as expenditures in each of these categories in 2006-07 exceed the amount budgeted: • Legal Fees 2006-07 Budget $142,250; 2007-08 Projection $250,000. Net difference = $107,750. • Maintenance and Operations Supplies 2006-07 Budget $607,000; 2007-08 Projection $765,000. Net difference = $158,000. • Net amount available for Potential Budget Needs $234,250

  28. Instructional Material/Textbook Needs • Ongoing Instructional Materials Funding: • Instructional Materials Realignment Funds - $55.92 per student • Proposition 20 Lottery - $19.00 per student in 2006-07 • These funds must cover both new and replacement textbooks as well as supplemental supplies, workbooks and supporting materials. • Textbook Needs – Total – all schools • 2006-07 Science $ 410,000* • 2007-08 Math $ 388,550 • 2008-09 English Language Arts $ 400,207 • TOTAL $1,198,757 • * Schools will fund with PY savings, parent donations, lottery funds, and one-time allocations from the State for 2006-07.

  29. 2007-08 Potential Budget Needs • As ranked by Budget Committee and Leadership Team • Priority #1 Items – Textbooks, offset loss of ADA due to declining enrollment and employee salary and benefit compensation • Priority #2 Items – Offset loss of Federal revenues, property and liability insurance, teacher sub pay, M&O staffing and supplies, repairs and services. • Priority #3 Items – Additional teaching staff, District operating budgets, legal fees, staff development, technology needs, special ed. support, deferred maintenance, M&O alarm response needs, addt’l psychologist time, increase reserve. • Priority #4 Items – Additional HS security, capital projects, additional teachers for world languages, public information needs, career center support, elementary assistant principal.

  30. 2007-08 Budget Calendar • April 17th Budget Study Session • May 8th School Services of California, Inc. will provide the District with their Fiscal Analysis Report for the San Marino Unified School District. • May 18th Governor Schwarzenegger presents his “May Revise” Report • May 22nd Preliminary Budget for 2007-08 presented to the Board of Education • June 12th Proposed Adopted Budget presented for review, and discussion • June 13th – 26th Public comment period • June 26th Following a public hearing the Board of Education will consider adoption of the 2007-08 Proposed Budget • Oct 1st Present actual enrollment and staffing requirements reports

  31. Next Steps • Board direction on budget planning • Prioritize budget needs • Align core values with budget planning and priorities • Evaluate staffing levels and programmatic decisions • Monitor student enrollment • Prepare Line Item Budget for 2007-08 • Report actual enrollment and revenues in October 2007 • Board to consider augmentations for budget needs November 2007

  32. Summary • 2006-07 Budget Needs • Restore reserve for economic uncertainties to required 3% level • Funding needs for model technology classroom project 2007-08 Budget Planning • Closely monitor student enrollment • Governor’s May Revise Report • 2007-08 State Budget • Unallocated General Funds • Budget Needs • 2008-09 Budget Planning • Budget reductions may be necessary

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