Orange Unified School District (C) Copyright March 2018 All Rights Reserved

Transcription

1 ORANGEUNIFIED UNIFIEDSCHOOL SCHOOLDISTRICT DISTRICT ORANGE Orange Unified School District (C) Copyright March 2018 All Rights Reserved 1

2 The Office of the Assistant Superintendent of Business Services This User Friendly Budget is an opportunity to communicate our financial commitment to District goals and actions. All budgets reflected in this publication are updated through the Second Interim Financial Report. The Board of Education and the Superintendent have the responsibility of setting policy and direction for the District, a task accomplished by defining goals and actions to be implemented by staff. Student achievement remains our number one goal and provides focus as we incorporate Board of Education goals with valued stakeholder input generated during the Local Control Accountability Plan strategic planning process. Our goals and actions are the basis for allocating resources to our priorities: Conditions for Learning, Pupil Outcomes, and Student and Parent Engagement. We remain fiscally responsible, while focusing limited resources to support student achievement. Thank you for your continued support for the students of the Orange Unified School District. Serving the communities of Orange, Anaheim Hills, Villa Park and portions of Santa Ana, Garden Grove, and unincorporated areas of Orange County. Orange Unified School District is located in the central portion of Orange County and encompasses nearly 108 square miles. Inside this issue: District Philosophy & Goals 3 District Budget Overview 4-5 Local Control Funding Formula 6 General Fund Revenues 7 General Fund Expenditures 8 Multi-Year Projections 9 Enrollment Trends 10 Other Budget Challenges 11 Measure S Update 12 Orange Unified School District (C) Copyright March 2018 All Rights Reserved 2

3 TOP TEN CORE VALUES THIS WE BELIEVE ABOVE ALL ELSE 1. That all students will learn. 2. That all available resources will be utilized to ensure student success. 3. That everyone needs to model servant leadership. 4. That creating a shared vision will empower others. 5. That communicating our shared vision requires honesty and consistency. 6. That all people should be treated with respect and dignity. 7. That we demonstrate trustworthiness by all we say and do. 8. That we need to listen empathically and respectfully to understand the message beyond the words. 9. That everyone is our customer and, therefore, we will always follow-up and follow-through. 10. That what s best for our students comes first and foremost. Main Goals Conditions for Learning All Students will receive a high quality education in a safe environment that prepares them to graduate from high school, college and career ready. Mission Statement "The Orange Unified School District, being committed to planning for continual improvement, will offer a learning environment of excellence, with high expectations, to provide each student with the opportunity to be able to compete in the global economy." Pupil Outcomes All Students will attain mastery or demonstrate academic growth toward mastery in core content areas. Engagement Student and Parent engagement will be promoted through an increased sense of safety and improved school climate and school connectedness. Orange Unified School District (C) Copyright March 2018 All Rights Reserved 3

4 The Purpose of the Budget The District s Budget is an expression in dollars of its educational program. The budget serves as an outline for estimated revenue and expenses for the fiscal year and is intended to serve a variety of purposes: A financial plan outlining proposed District goals and actions A reflection of educational philosophy A statement of District priorities A description of the education plan and resources to support the plan An accountability tool A public information document Fund Budgeting The State requires the use of various funds based on the type of revenues and expenditures. The General Fund is the primary operating fund and it is used to account for the ordinary operations of the District. The general fund includes all transactions except those accounted for in a specialized fund, such as the Charter Schools Fund, Cafeteria Fund or Capital Projects Fund. Orange Unified School District (C) Copyright March 2018 All Rights Reserved 4

5 The Budget Cycle Education Code requires local education agencies to submit financial reports at least four times a year. The reports must follow State guidelines and meet pre-determined financial standards to measure risk factors and the overall fiscal solvency of the district. The District uses a zero-based budgeting approach, which means that all expenses must be justified each year and therefore Business Services staff conducts budget development sessions with each school and department administrator to develop their site budgets. This is an overview of the Education Code reporting requirements. Interesting to Know OUSD Educational Programs Orange Unified School District (C) Copyright March 2018 All Rights Reserved 5

6 Local Control Funding Formula In 2013, California approved the Local Control Funding Formula (LCFF), a major reform in school finance in 40 years. The LCFF establishes a unique funding target for school districts based upon the student population they serve. OUSD receives Supplemental Grant Funds but is not entitled to Concentration Grant Funds since the percentage of disadvantage students is below the 55% threshold required by the formula. LCFF Funding Target The LCFF estimated revenues for FY are $224M, closing about 97% of the gap funding to target. Based on the Governor s Budget Proposal released in January, the LCFF estimated revenues for FY are projected to fill the remaining gap of about $8M and LCFF will be at full funding. According to School Services of California, even at full restoration, California remains near the bottom of state rankings in per-student spending. They estimate that average districts will continue to rank about 45th in perstudent spending, while districts with the lowest number of unduplicated students (low income, English learners, and foster youth) will remain last in the nation while the highest funded districts with the neediest students will remain at about 35th, well below the national average. The following LCFF calculation is updated throughout the year to incorporate changes in student enrollment, unduplicated pupil count, and funding factors established at the state level. Orange Unified School District (C) Copyright March 2018 All Rights Reserved 6

7 Second Interim Budget March 8, 2018 The total revenues from the Local Control Funding Formula are projected at $224M or 78% of the District total revenues. Driving factors for the LCFF apportionment calculation are: Average Daily Attendance (ADA); the percentage of unduplicated English Learners, Low Income students, and Foster Youth; the transitional gap funding; and the cost of living adjustment. The last two factors are determined at the state level. The LCFF revenues include a portion of the Board committed transfer of approximately $4M to the Deferred Maintenance Fund for large maintenance projects and system upgrades. The remainder of the Deferred Maintenance transfer is budgeted in the Special Reserve Fund from prior year one-time Mandated Cost Reimbursements. Federal Revenues are projected at $15M, State Revenues at $41M, and Other Local Revenues at $7M, representing 5%, 14%, and 3% respectively of total revenues. Please note that State Revenues include Onetime Mandate Cost Reimbursement funds of approximately $3.7M. Restricted Unrestricted Total LCFF Sources $0 $224,009,914 $224,009,914 Federal Revenues $14,856,811 $69,440 $14,926,251 Other State Revenues $32,203,093 $8,762,686 $40,965,779 Other Local Revenue $3,339,239 $3,921,465 $7,260,704 TOTAL REVENUES $50,399,143 $236,763,505 $287,162,648 Orange Unified School District (C) Copyright March 2018 All Rights Reserved 7

8 Second Interim Budget March 8, Certificated Salaries $128,341,194 Classified Salaries $47,384,169 Employee Benefits $72,666,612 Books and Supplies $13,440,410 Services and Other Operating $25,416,861 Capital Outlay $117,566 Other/Transfers Out $10,591,214 TOTAL EXPENSES $297,958,026 The General Fund Expenditures for are projected at $298M, with approximately 83% of those expenses earmarked to cover the salaries and benefits of teachers and support service providers. Salaries and benefits are projected based on established staffing ratios and Board approved positions. In addition, budget allocations are provided to each school site on a per-student basis to cover operational costs like instructional materials, postage, printing, office, and library supplies. Expenses associated with State and Federal categorical programs are projected not-to-exceed program revenues, except Special Education Master Plan since the apportioned state funds are inadequate to meet the needs of students served. The General Fund contribution to categorical programs including Special Education, Routine Restricted Maintenance, net with Career Technical Education support from the Orange County Department of Education totals $39M. Stakeholders often inquire about the use of Lottery funds, which represents 2% of our annual General Fund budget or approximately $5M ($194 per ADA). The District uses the funds to purchase textbooks aligned to the new State Standards and other instructional materials and to support high school athletic programs. A PEOPLE BUSINESS Education is a service-oriented business where students are served by teachers and support service providers. Approximately 83% of General Fund expenditures are for employees, including those who directly serve the children of this District. Services are provided by teachers, nurses, counselors, librarians, psychologists, speech therapists, custodians, secretaries, clerks, maintenance workers, bus drivers, mechanics, technical support personnel, instructional aides, coaches, substitutes, principals, supervisors, and other administrative and support staff. Since our business relies so heavily on people, our budget is impacted by increasing costs of employee benefits and by the cost to attract and retain quality employees who are qualified to serve our children. Orange Unified School District (C) Copyright March 2018 All Rights Reserved 8

9 General Fund Budgeted Expenditures by Function or Activity The graph below shows a breakdown of the General Fund expenses associated with each activity of the District; 83% are related to K-12 instruction and services provided to students, including school administration, library and media, counseling, psychological, speech, pupil transportation and health services. Ancillary & Community Services is the cost of the District s athletic program. General Administration represents the cost of running the District, including fiscal services, human resources, purchasing, warehouse, and audit services. Plant Services include maintenance, operations, custodial, grounds, and security expenses. Other Outgo is the debt service payments, capital leases and transfers to Orange County Department of Education for students educated at County Programs At each reporting period, multi-year projections are included with the financial statements and therefore District s staff is regularly estimating the current plus two subsequent years based on the latest financial indicators and advisories provided by State agencies and Orange County Department of Education. The Board of Education and District Administration continues taking action towards cost containment strategies to balance the multi-year budget. These Multi-Year Projections are a snapshot as of March and will be updated at the next reporting period in June: TOTAL REVENUES 287,162, ,775, ,557,231 TOTAL EXPENDITURES 297,958, ,078, ,212,321 INCREASE (DECREASE) IN FUND BALANCE (10,795,378) (10,303,626) (16,655,090) BEGINNING BALANCE 62,965,570 52,170,192 41,866,566 PROJECTED ENDING BALANCE 52,170,192 41,866,566 25,211,476 Adjustment to Ending Fund Balance Stores, Revolving Cash and Assignments (334,295) (334,295) (334,295) Reserve for STRS and PERS Increases (9,305,476) (5,959,895) (2,509,328) 3% State Required Contingency (8,938,741) (8,852,359) (9,036,370) Unappropriated Fund Balance Above 3% 33,591,680 26,720,017 13,331,483 Orange Unified School District (C) Copyright March 2018 All Rights Reserved 9

10 Declining Enrollment and Average Daily Attendance (ADA) Approximately 78% of the District s revenue is generated from the Local Control Funding Formula. The funding is based on the average number of students in daily attendance (ADA). Enrollment is very important; it is even more important that students enrolled also attend school on a daily basis. OUSD has an outstanding daily attendance rate of 96.2%, approximately 1 point higher than the state-wide average. The ADA projection for included in the Budget is 24,742, not including charter schools. Compared to this reflects a decline of 564. Declining enrollment is anticipated to reduce ADA by 663 in each of the next two years. District charter schools have a projected ADA of 2,115 that generates separate revenue for those schools. ADA projections are revised after the October census day and each attendance reporting period. Impact of Declining Enrollment The revenue generated by one student pays for a portion of the classroom teacher and supplies as well as a small portion of each support service provided by the district. For example, if a district experienced a decline of 30 students and they all came from the same classroom, the district could operate with one less teacher, but a support service like Transportation would not realize any reduced cost. Furthermore, if a decline of 30 students occurred, but each student was from a different classroom, the district would most likely still need the same number of teachers and therefore, expenditures would remain the same (except for savings on instructional supplies), but the revenues would be reduced by approximately $250K. It is very difficult to reduce expenditures to compensate for revenue losses without making significant program reductions. A conservative staffing approach and reserves have helped the district weather declining enrollment. Orange Unified School District (C) Copyright March 2018 All Rights Reserved 10

11 Facilities The District spends about $7 million annually on regular maintenance and repairs. In addition, 1.5% of the total General Fund Expenditures or $4 million are allocated to cover deferred maintenance projects (roofs, parking lots, painting, flooring, heating/cooling, restroom renovation, field improvements). School Districts no longer receive matching funds from the state for the Deferred Maintenance Program, therefore General Fund monies are the only source to address the most critical health and safety issues. Summer Planned Projects: Interior Painting Project Sites: Flooring Project Sites: In Exterior Painting Project Sites: Field Improvement Project Sites: Asphalt Project Sites: NEW Asphalt Roofing Project Sites: Seal Coating Budget: $3,800,000 Orange Unified School District (C) Copyright March 2018 All Rights Reserved 11

12 At the November 8 th, 2016 Election, Voters approved Measure S OUSD Bond Measure. Measure S will provide $288 million in locally controlled funds to repair and upgrade OUSD s four comprehensive high schools. Measure S will cost approximately $29 per $100,000 of assessed property value (not market value) annually, or about $108 per year for the average residence. Measure S continues to make progress in Orange Unified School District Schematic Building Designs for the four high school science centers were approved by the Board of Education in on April 13, May 11, May 25, and June 8. The presentations and updated program information can be found at: Architects are currently working on the project designs; plans are approximately 75% complete. Regular design review meetings are being held with the architects, construction managers, program manager, and District staff. Design Teams, over the past several months, have worked diligently with District staff to review project designs and identify areas of potential cost savings, streaming, and design efficiency. Standardized Specifications wer e developed in September 2017 to ensure compatibility and conformity between materials, products, and systems across all four campuses. Initial Construction began over winter break with the removal of outdated relocatable classrooms at Orange High School. Replacement and installation of utility infrastructure will also commence at Orange High School beginning June Citizens Oversight Committee (COC) has held four meetings since May 2017 and delivered its first annual report to the Board of Education on March 8, The 7-member committee acts independently from the Board of Education to promote transparency and provide assurance to the District taxpayers. Board of Education Alexia Deligianni-Brydges, Ed. D. President Kathryn Moffat Vice President Timothy Surridge Clerk Brenda Lebsack Member Rick Ledesma Member John Ortega Member Andrea Yamasaki Member Gunn Marie Hansen, Ph. D. Superintendent Colleen Patterson Chief Business Official, Consultant For more information, please contact: Business Services Department (714) Orange Unified School District (C) Copyright March 2018 All Rights Reserved 12