Saugus Union School District Budget Adoption for FY Executive Summary. Board of Trustees

Transcription

1 Saugus Union School District Budget Adoption for FY Executive Summary Board of Trustees Judy Egan Umeck, President Paul De La Cerda, Clerk Douglas A. Bryce, Member Rose Koscielny, Member Stephen S. Winkler, Member Administration Joan M. Lucid, Ed.D., Superintendent Cynthia Shieh, Assistant Superintendent of Business Christine Hamlin, Ed.D., Assistant Superintendent of Instruction Chad Hammitt, Assistant Superintendent of Human Resources June 18, 2013

2 Table of Contents Budget Calendar FY Executive Summary Standardized Account Code Structure (SACS) Financial Report for Fiscal Year

3 Budget Calendar FY June Board adopts FY Budget July Business Office Staff works on the Year-end Closing (FY ) August/ September Business Office Staff works on the Year-End closing: September release of prior years' Unaudited Actuals (FY ); Board adopts revised budget based on States Final Budget (45 days after State Final Budget) to reflect any significant changes October First Interim cut-off (FY ) November December Working on First Interim Release of First Interim (FY ); Release of Auditor's Report for prior year (FY ) January Governor releases State budget proposal for the next year (FY ); Second Interim cut-off February School Board conducts a budget study session (based on the Governor's Budget proposal) March District releases the Second Interim for the current year (FY ) April May June P-2 ADA cut-off Release of Governor's May Revise (FY ); School Board conducts A budget study session for FY Board adopts FY budget 1

4 EXECUTIVE SUMMARY Saugus Union School District Proposed Budget FY 2013/14 The Saugus Union School District is located in Santa Clarita Valley in Northern Los Angeles County. Currently, there are approximately 10,178 students attending fifteen schools within our boundaries of 99 square miles. Fourteen of our schools have been recognized as California Distinguished Schools, some of them more than once. Emblem Academy will be re-opening in August 2013 which will be a STEM (Science, Technology, Engineering and Mathematics) focused school site. In addition, five schools have been recognized as National Blue Ribbon Schools. Academic Performance Index (API) scores have been consistently strong and continue to grow each year. In our API was 889. All demographic areas of student performance continue to show improvement. MISSION The Saugus Union School District in partnership with the home and community is committed to excellence in elementary education. VALUE Respect. Integrity. Learning. Teamwork. Enthusiasm. VISION Our vision is academic and personal success for every child. 2

5 Board of Trustees Judy Egan Umeck, President, term expires December 2013 Paul De La Cerda, Clerk, term expires December 2013 Douglas A. Bryce, Member, term expires December 2013 Rose Koscielny, Member, term expires December 2015 Stephen S. Winkler, Member, term expires December, 2015 District Administration Joan M. Lucid, Ed.D., Superintendent Cynthia Shieh, Assistant Superintendent of Business Services Christine Hamlin, Ed.D., Assistant Superintendent of Instruction Chad Hammitt, Assistant Superintendent of Human Resources School Site Administration Bridgeport: Susan Bender, Principal- Sandy Brunet, Assistant Principal Cedarcreek: Jennifer Stevenson Ed.D, Principal Emblem: Jon Baker, Principal Foster: Debbie Bohn, Principal Helmers: Diane Miscione, Principal- Karen Hurley, Assistant Principal Highlands: Paul Martinsen, Principal Mountainview: Katie Dempsher, Principal- Susan Bett, Assistant Principal North Park: Pete Bland, Principal- Kathy Stendel, Assistant Principal Plum Canyon: Mary Jane Kelly, Principal Rio Vista: Gina Nolte, Principal -, Mary Mann Assistant Principal Rosedell: Jeff Pettipas, Principal- Karen Harvey, Assistant Principal Santa Clarita: Dianne Saunders, Principal Skyblue Mesa: Julie Bogosian Principal Tesoro del Valle: Isa De Armas, Principal West Creek Academy: Cory Pak, Principal 3

6 Introduction: Education Code requires districts to hold a public hearing on the budget to be adopted, and the board shall adopt a budget and, not later than 5 days after the adoption or by July 1, whichever occurs first, file the budget with the County Superintendent of Schools. School district budgets and programs are impacted each year by the combination of legislation, litigation, and state ballot propositions. Implementing and correcting legislation is frequently delayed for several months after the passage of a proposition. With the passage of Proposition 25 in November 2010, the legislative vote requirement necessary to pass the State Budget and spending bills related to the Budget was lowered from two-thirds to a simple majority. In addition, proposition 25 provided that if the Legislature fails to pass a Budget by June 15, 2013, all members of the Legislature will permanently forfeit salary and expense reimbursement for every day until the Legislature passes a Budget. However, it is still difficult to do our budget planning before our state adopts its budget and determines the level of funding for schools. This year it has been unusually difficult as the Governor has proposed a major change in the state school funding proposal know as Local Control Funding Formula (LCFF). Due to the unusual funding situation the District decided to build the budget and multi-year projections based on the current law (Revenue Limit), which was also the recommendation the District received from the Los Angeles County Office of Education, who has the ultimate responsibility for approving the budget. The District will make a budget revision within 45 days after the State has adopted its budget. With this as background we present our budget for The budget reflects the educational plan of the District and the Board goals for the coming year. Because of the tenuous nature of the school funding process, it is difficult for school districts to project precisely. Throughout the school year, the budget is monitored closely and continues to be adjusted. The District budget is designed to fully inform interested persons, including the public, of how the District derives its financial resources and the manner in which the district plans to allocate those resources during the fiscal year based on the latest legislation. It serves as a guideline for the utilization of resources to meet the needs of students in the Saugus Union School District. The Executive Summary is an overview of the budget for FY The budget reflects the educational plan of the district and meets all legal requirements, including having a 3% as reserve. The Executive Summary is to assist the general public in understanding the information being reported in the State required software (Standardized Account Code Structure (SACS) reporting software) and required SACS forms. 4

7 District's Funds and Budget: Accounting is the fiscal information system for business. The District's accounting, referred to as Governmental Accounting, is organized and operated on a fund basis. A fund is defined as a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations. In FY , there are sixteen funds in the District accounting system. The District's funds include: General Fund (Fund 01) Special Education Pass-Through Fund (Fund 10) Child Development Fund (Fund 12) Deferred Maintenance Fund (Fund 14) Special Reserve Fund Other Than Capital Outlay Projects (Fund 17) Special Reserve Fund for Postemployment Benefits (Fund 20) Building Fund (Fund 21) Capital Facilities Fund (Fund 25) County School Facilities Fund (Fund 35) Special Reserve Fund for Capital Outlay Projects (Fund 40) Capital Project Fund Blended Component Units (Fund 49) Bond Interest and Redemption Fund (Fund 51) Debt Services Fund for Blended Component Units (Fund 52) Debt Service Fund (Fund 56) * (fund will be closed in FY ) Other Enterprise Fund (Fund 63) Multi-Year Assumptions: The multi-year projection for the budget adoption utilizes the recommended assumptions published by Los Angeles County Office of Education for the development of revenue projections due to the uncertainty around school funding due to the Governor s proposed change from the current system (revenue limits) to the Local Control Funding Formula (LCFF). Expenditure projections include the restoration of 5 furlough days taken in FY , estimated step and column increases for salaries, with the balance of expenditures at approximately the same level as FY Increases are for 11 general education teachers which are being added in due to the District reducing class sizes in grades TK-3 and then only step and column increases for and Fiscal Years due to the projected continued declining enrollment. 5

8 For the proposed budget for FY , assumptions include: Restoration of 5 furlough days taken in Sweeping most of the Tier III Flex State Grants such as Oral Health, PE Teacher Incentive, CBET, Art & Music, GATE, SB472, PAR, and Staff Development & Supplemental Grants. Sweep $50,000 of BTSA funding. SIP Sweep, District will fund all Library Specialists to see each class at every school site for 30 minutes per class per week, increase Per Student Enrollment (PSE) from $50 per PSE to $75 PSE. New staffing: principal, office manager and custodian (for Emblem Academy re-opening) Increase Certificated Teachers to 337 FTEs from 326 in FY in general education Reduced class size for TK, K and 1 to 27 and Grades 2-3 to 29 in year The budget for the two subsequent years, FY and FY , assumptions include: Same Tier III flexibility sweeps as FY Sweep $50,000 of BTSA funding. Reduced class size for TK, K and 1 to 26 and Grades 2-3 to 28 in year and class size TK, K and 1 to 25 and Grades 2-3 to 27 in year No additions or reductions in Certificated Teachers are budgeted in or even with a continued reduction of class size due to an anticipated continued decline in enrollment for the District. Transfer in of all reserves from Fund 17.0 and Fund 20.0 in to maintain the District reserves at 3% in 2014/15. Reduction in major object 3000 by $419,060 for reduction in PARS payment in 14/15 and an additional reduction of $256,431 in 15/16. Reduction in restricted funds for Title I carryover included in 13/14 by $204,500 in 14/15. Reduction in restricted expenditures for EIA carryover included in 13/14 by $430,000 in 14/15. The following table shows major assumptions used in the Budget. MYP Budget Assumptions Factor 2013/ / /16 Statutory COLA 1.565% 1.800% 2.200% Revenue Limit Deficit % % % Projected Enrollment 10,121 9,865 9,674 P-2 ADA 9,817 9,569 9,384 Funded ADA 9,873 9,817 9,569 General Ed FTEs $ Per Pupil $ 75 $ 75 $ 75 Instructional Days

9 A balanced budget and fiscal solvency means we can meet all our expenditure commitments and reserve requirements. In order to maintain fiscal solvency, the District must make transfers in from Fund 17.0 and Fund 20.0 in which will zero out the reserves in those funds. The District in the subsequent years will continue the situation of deficit spending noted as follows: Multiyear Projections: The Multi-Year Projection is a required component of budget adoption to demonstrate that the District can meet its financial obligations in the current and subsequent two years. The multi-year projection is also an indication of the District s ability to maintain the required reserve for economic uncertainties for the current and subsequent two years. The District in the two subsequent years is projected to meet the required reserves. The following are projections and assumptions: Unrestricted FY FY FY Total Revenue $57,198,763 $53,356,343 $50,536,502 Total Expenditures $56,198,701 $54,999,514 $55,502,440 Contributions ($6,606,445) ($6,698,967) ($6,917,542) Net ($5,606,383) ($8,342,138) ($11,883,480) Beginning Balance $8,233,551 $2,627,168 $983,998 Ending Balance $2,627,168 ($5,714,970) ($10,899,482) Restricted FY FY FY Total Revenue $13,458,131 $13,386,187 $13,391,354 Total Expenditures $20,494,576 $20,085,154 $20,308,896 Contributions $6,606,445 $6,698,967 $6,917,542 Net ($430,000) $0 ($0) Beginning Balance $430,000 $0 $0 Ending Balance $0 $0 ($0) Combined (Unrestricted & Restricted) FY FY FY Total Revenue $70,656,894 $73,441,497 $71,075,398 Total Expenditures $76,693,277 $75,084,668 $75,811,336 Contributions $0 $0 $0 Net ($6,036,383) ($1,643,171) ($4,735,938) Beginning Balance $8,663,551 $2,627,168 $983,996 Ending Balance $2,627,168 $983,996 ($3,751,942) Required Reserve $2,300,799 $2,252,540 $2,274,340 Reserve % 3.43% 1.31% -4.95% Required Reserve % 3% 3% 3% Available Reserve/Meet Reserves Standard Yes No No 7

10 Description 2013/ / /16 Ending Fund Balance $2,627,168 $983,997 ($3,751,940) Components of Ending Fund Balance Nonspendable Revolving Cash 2,500 2,500 2,500 Stores 90,000 90,000 90,000 Restricted Committed Assigned Unassigned/Unapproriated Reserve for economic uncertainties 2,300,799 2,252,540 2,274,340 Unassigned/Unapproriated 233,869 (1,361,043) (6,118,780) GENERAL FUND (Fund 01): This is the chief operating fund for the District. It is used to account for the ordinary operations of the District. All transactions except those required or permitted by law to be in another fund are accounted for in this fund. In the General Fund, there are General Fund Unrestricted and General Fund Restricted. General Fund Unrestricted: Unrestricted funds are monies received that are not restricted in their use. The district can spend unrestricted monies on whatever programs it chooses. To help us cope with reduced funding, the state has eliminated the restrictions on some previously restricted funding sources- allowing districts the flexibility to determine locally the best use of the funds. General Fund Restricted: This is to account for those projects and activities that are funded by external revenue sources that are legally restricted or restricted by the donor to specific purposes. For example, special education funds are restricted. They can only be spent on students with identified special needs and in the manner outlined in state and federal law. 8

11 The following table illustrates the Total General Fund Budget for FY (Estimated Actuals) vs. FY (Adopted Budget) 2012/ /14 Difference Est. Actuals Budget % Revenue Limit Sources $ 50,640,580 $ 50,010,420-1% Federal Revenue 3,609,509 3,100,283-14% State Revenue 18,775,664 15,916,471-15% Local Revenue/Other 1,647,948 1,629,720-1% Total Revenues $ 74,673,701 $ 70,656,894-5% Certificated Salaries $ 36,984,998 $ 38,610,149 4% Classified Salaries 13,621,602 13,812,782 1% Employee Benefits 12,974,179 13,159,588 1% Books & Supplies 4,052,380 3,709,981-8% Services & other 4,969,916 5,457,425 10% Capital Outlay 184, ,000-39% Other outgo 2,907,340 1,831,352-37% Total Expenditures $ 75,694,539 $ 76,693,277 1% Revenues Over (Under) Expenditures $ (1,020,838) $ (6,036,383) 491% Beginning Fund Balance $ 9,684,389 $ 8,663,551-11% Ending Fund Balance $ 8,663,551 $ 2,627,168-70% Required Reserve $ 2,270,836 $ 2,300,799 1% Nonspendable $ 92,500 $ 92,500 0% Restricted $ 430,001 $ % Committed $ 1,677,050 $ % Assigned $ - $ - 0% Unassigned $ 4,193,164 $ 233,869-94% 9

12 General Fund Revenues: $70,656,894 (Unrestricted $57,198,763; Restricted: $13,458,131) The following chart illustrates the funding source of the total General Fund revenues. State Revenue, $15,916,471, 23% Federal Revenue, $3,100,283, 4% Revenue Limit Sources, $50,010,420, 71% Local Revenue, $1,629,720, 2% Revenue Limit Source (Object ): $50,010,420 (Unrestricted $48,795,550 Restricted $1,214,870) This represented 71% of the total general fund revenues. It is the prime revenue component of the District's total revenue source. As a result of substantial state funding cuts and the loss of one-time federal monies, in developing our budget we continue to face a sizeable deficit. The following chart shows the trend of the funding since FY to FY from Revenue Limits. Base Revenue Limit $7,000 $6,500 $6,000 $5,500 $5,000 $5,519 $5,834 $5,376 $6,400 $6,197 $6,084 $6,060 $4,971 $4,920 $4,974 $4,714 $6,513 $5,062 $4,500 $4,

13 We have taken several steps to address this funding deficit. We are closing the year and entering the year during a very prolonged slump in the State and Federal economies. In addition to this we have a Governor proposed complete overhaul to the funding formula for schools that is still not completely settled and active as we are developing our budget. We expect it will take several years before the economy completely turns around and thus we continue to foresee adverse impacts on our budget forecasts. Overall Revenue Limit Sources are down by about 1.2% from FY 12-13, reflecting continued declining enrollment. The unrestricted portions represented the Revenue Limit funding including the Principal Apportionment (P2 ADA) and the Property Taxes. EC Section (a)(1) allows districts with declining attendance to continue to receive funding based on the greater of prior year or current year actual attendance. This provides, in effect, a one-year cushion for the loss of revenue due to declining enrollment/attendance. As a result, the district uses the prior year P2 ADA, 9,873 to calculate the Revenue Limit. The following chart shows annual enrollment (based on the informational date which is the first Wednesday of October each year) and P-2 Average Daily Attendance (ADA). Each school agency reports its attendance three times during a school year. The First Principal apportionment ADA, called the P-l ADA or the P-l count, is counted from July 1 through the last school month ending on or before December 31 of a school year. The Second Principal apportionment ADA, called the P-2 ADA, is counted from July 1 through the last school month ending on or before April 15 of a school year. The final recalculation of the apportionment is based on a school agency's P-2 ADA. The following chart illustrates the seven year trend analysis between enrollment and P-2 ADA. 10,600 10,400 10,200 10,000 9,800 10,531 10,191 10,494 10,142 Enrollment Trend 10,337 10,376 10,075 9,945 10,296 10,022 10,178 9,865 10,121 9,817 9,600 9, CBED P-2 11

14 Federal Revenue (Object ): $3,100,283 (Restricted) This represents 4% of the total general fund revenues. The District received federal reimbursement through the California Department of Health Services (CDHS) for costs incurred to provide information to parents and families on augment its General Fund with federal dollars earned through the various activities which support students' access to Medi-Cal services. The restricted amount includes funding for Special Ed., and No Child Left Behind (NCLB) including Title 1, Title 2, and Title 3. Other State Revenue (Object ): $15,916,471 (Unrestricted $8,023,213; Restricted $7,893,258) This is the second largest revenue source for the District; it represents 23% of the total general fund revenues. The unrestricted funds include Supplemental Instruction Program, Class Size Reduction (K- 3), unrestricted Lottery, Oral Health Exam, and Pupil Testing Reimbursement. The restricted funds are referred to Categorical Programs, they included Special Ed., Home-to-School Transportation, Economic Impact Aid (EIA), restricted Lottery, and other State Revenue such as Prop. 49, After School Education and Safety, PE Teacher Incentive Grant, Community Base Tutoring Grant, English Language Acquisition Program, Peer Assistant and Review Grant. Other Local Revenue (Object ): $1,629,720 (Unrestricted $380,000; Restricted $1,249,720) This represents 2% of the total general fund revenues. It is a small portion of the entire District's revenue source. The unrestricted portions include Interest Income, Donations, Sale of Equipment, and RDA money. The restricted portions include site specific or program donations, and contribution from Food Services JPA. General Fund Expenditures: $76,693,277 (Unrestricted $56,198,701; Restricted: $20,494,576) Services & other, $5,457,425, 7% Books & Supplies, $3,709,981, 5% Other outgo, $1,831,352, 3% Capital Outlay, $112,000, 0% Employee Benefits, $13,159,588, 17% Certificated Salaries, $38,610,149, 50% Classified Salaries, $13,812,782, 18% 12

15 Certificated Salaries (Object ): $38,610,149 (Unrestricted: $31,661,998; Restricted $6,948,151) Certificated salaries are salaries for positions that require a credential or permit issued by the Commission on Teacher Credentialing. District staffing is determined annually according to the needs of the district. Our staffing ratio for is K-1 at 27, 2-3 at 29 and 4-6 at 31. Total district General Ed staffing for is projected to be 337 full-time equivalents (FTE). In addition, we have FTE, for special education teachers. It represents 51% of the total general fund expenditures (including transfer out). 18% of the total certificated positions were funded by restricted funding, and the remaining 82% were being funded by unrestricted dollars. Classified Salaries (Object ): $13,812,782 (Unrestricted: $8,637,626; Restricted $5,175,156) This classification represents the salaries paid for the positions that do not require a credential or permit issued by the Commission on Teacher Credentialing. The positions in this classification are Office Manager, Administrative Clerk, Clerical Assistant, Receptionist/Secretary, Health Clerk, DO staff, Instructional Aide and Maintenance and Operation staff, and so on. It was about 18% of the total general fund expenditures. 37% of the total classified positions are funded by restricted funding, and 63% are funded by unrestricted dollars. Employee Benefits (Object ): $13,159,588 (Unrestricted: $10,247,679; Restricted $2,911,909) This classification is to account for employers' contributions to retirement plans (State Teachers' Retirement System, and Public Employees' Retirement System), Alternative Retirement Plan, Early Retirement Incentive Programs, Health and Welfare benefits, and the payroll related statutory costs such as Workers' Compensation, State Unemployment Insurance, FICA, and Medicare. It was about 17% of the total general fund expenditures. Education is a people business. It takes people to teach people. Therefore, the biggest expenditure for the District/Education would be the Total Compensation. In FY , the Total Compensation represented about 86 % of our total expenditures. Books and Supplies (Object ): $3,709,981 (Unrestricted $2,385,019; Restricted $1,324,962) This is to account for expenditures for books and supplies, other reference materials, and noncapitalized equipment. It represents about 5% of the total expenditures. Services and Other Operation Expenditures (Object ): $5,457,425 (Unrestricted $3,474,607; Restricted $1,982,818) This is to account for expenditures for services, rentals, leases, maintenance contracts, dues, travel, insurance, utilities, legal and other operating expenditures. It is about 7 % of the total expenditures. Other Outgo (Object ): $208,228 (Restricted): $ 207,911 of this represents Transportation and $317 for Title 3. 13

16 General Fund Ending Balance: There are several key Fiscal Indicators to evaluate the District's fiscal health. One of the key fiscal indicators is the Unrestricted Fund Balance. The following illustrates the ending balance for the General Fund: FY 2013/14 Unrestricted Restricted Combined Beginning Balance $ 8,233,551 $ 430,000 $ 8,663,551 Total Revenues 57,198,763 13,458,131 70,656,894 Total Expenditures 56,198,701 20,494,576 76,693,277 Contributions (6,606,445) 6,606,445 - Net Results 1,000,062 (7,036,445) (6,036,383) Ending 6/30/2014 $ 2,627,168 $ - $ 2,627,168 Reserve for Economic Uncertainties $ 2,300,799 - $ 2,300,799 Revolving Cash 2,500-2,500 Stores 90,000-90,000 Unassigned 233, ,869 14

17 Cash Flow Projections The Governor s May revise budget provided positive news for schools regarding cash flows. The State is trying to buy down deferrals owed to districts. Also with the passage of proposition 30 creating the Education Protection Account (EPA), these funds are paid out quarterly and for 13/14 will be received in July, which will aide in cash flow. Education Code provides that money in other funds may be temporarily transferred to another fund for payment obligations. The district is projecting to only borrow an estimated $5,950,000 from other funds during the 2013/14 year due to the increase cash flow from the State. $14,000,000 $13,296,172 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- $4,280,889 $4,485,127 $2,880,750 $676,607 $2,786,354 $5,130,831 $2,896,362 $2,348,405 $534,843 $123,060 $67,149 15

18 For 2014/15, cash flow continues to improve for the district due to the State economy slowly growing. Assuming no new funding and borrowing $2,600,000 from other funds the cash flows for 2014/15 are projected as follows. $14,000,000 $12,000,000 $11,433,389 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- $3,205,894 $2,476,433 $1,600,292 $294,881 $4,681,205 $4,824,700 $4,024,454 $4,868,903 $3,160,227 $978,787 $859,920 16

19 OTHER FUNDS SPECIAL EDUCATION PASS-THROUGH FUND (Fund 10): This fund is used by the Administrative Unit (AU) of a multi-lea Special Education Local Plan Area (SELPA) to account for Special Education revenue passed through to other member LEAs. Special Education revenue that is not passed through to other member LEAs, but rather is retained for use by the SELP A AU in accordance with the local plan is not accounted for in this fund, it is then included in the General Fund. Revenues budget in this fund includes state special education apportionments, federal local assistance under the Individuals with Disabilities Education Act, federal preschool funding, state mental health funding and these in tum are passed to Castaic, Newhall, Sulphur Springs and William S. Hart School District. $6,588,810 will be from the federal, $21,816,279 will be from state funding sources. The fund as approximately $557,474 in carryover of mental health funds into 13/14. Then total amount of $28,405,089 are passed to the member districts. CHILD DEVELOPMENT FUND (Fund 12): This fund is used to account separately for federal, state, and local resources to operate Child Development Programs. The programs include two State Preschools located at Cedarcreek and Rio Vista and two LA Universal Preschools located at Mountainview and Santa Clarita. The anticipated total revenues for the Child Development Programs are $444,261, which includes $407,861 from the State and $36,400 from other local revenues. The total expenditures are $444,261. The ending balance will be $8,229 at June 30, DEFERRED MAINTENANCE FUND (Fund 14): This fund is used to account for state apportionments and the District's contribution for deferred maintenance purposes. However the law, as amended in recent year: Establishes a funding baseline for the DMP using the funding amounts Provides a flexibility clause allowing districts to use the funding for "any educational purpose Eliminates the reporting requirement for the five years when the LEA's do not meet their match (report Legislature not required) The total revenues are $390,689 including state revenue of $377,499, interest income (local revenue) of $13,190. Expenditures are for repairs and maintenance at the school site based on a priority listing maintained by the District M & O department in the amount of $424,000. The ending balance will be $2,207,178 at June 30, SPECIAL RESERVE FOR OTHER THAN CAPITAL OUTLAY PROJECTS (Fund 17): This fund is used primarily to provide for the accumulation of general fund moneys for general operating purposes other than for capital outlay. The ending balance will be $1,430,493 at June 30, All of this fund will be zeroed out in 2014/15 with a transfer of these funds to the General Fund 01 to help the District meet its reserve requirement. SPECIAL RESERVE FUND FOR POSTEMPLOYMENT BENEFITS (FUND 20): It was known as GASB 45, OPEB money. This fund may be used pursuant to Education Code Section to account for amounts the District has earmarked for the future cost of postemployment benefits but has not contributed irrevocably to a separate trust for the postemployment benefit plan. The ending balance will be $775,160 at June 30, All of this fund will be zeroed out in 2014/15 with a transfer of these funds to the General Fund 01.0 to help the District meet its reserve requirement. 17

20 BUILDING FUND (Fund 21): It in known as G.O. Bond Fund. This fund exists primarily to account for proceeds from the sale of bonds and may not be used for any purposes other than those for which the bonds were issues. This represents 1993, 2002, 2005 (refunding) & 2006 (refunding) outstanding General Obligation Bonds. We anticipate $12,240 as interest income. Expenditures total $282,091 with $58,000 that will be spent on the Master Facilities Plan consultant and the remaining for salaries of the facilities department. The ending balance will be $2,004,705 at June 30, CAPITAL FACILITY FUND (Fund 25): It is known as Developer Fees money. This fund is used to account for monies received from fees levied on developers or other agencies as a condition of approving a development. The Interest earned in this fund is restricted to this fund. The expenditures in this fund are restricted to the purposes specified in agreements with the developer or specified in Government Code. The revenue in the amount of $107,500 of which $30,000 represents the interest income and $77,500 from developer fees collected. The total expenditures of $50,500 are for projects at various school sites. The ending balance will be $7,356,674 at June 30, COUNTY SCHOOL FACILITIES FUND (Fund 35): This fund is used primarily to account separately for state apportionments for the State School Facilities Fund. The interest income is $1,000. The expenditures are budgeted for $50,000 for potential noncapital equipment projects at various school sites. The ending balance will be $119,776 at June 30, SPECIAL RESERVE FUND FOR CAPITAL OUTLAY PROJECTS (Fund 40): This fund exists to provide for the accumulation of general fund monies for capital outlay purposes. This fund may also be used to account for any other revenues specifically for capital projects. The interest income is anticipated to be $110,000. We have budgeted $2,177,669 which is the payment for the lease revenue bond of which $1,342,669 is interest expense and $835,000 toward the principal balance of the lease revenue bond. The ending balance will be $21,468,721 at June 30, CAPITAL PROJECT FUND FOR BLENDED COMPONENT UNITS (Fund 49): This fund is used to account for capital projects financed by Mello-Roos Community Facilities Districts. The Mello- Roos Community Facilities Act of 1982 allows the District to establish a CFD upon approval of 2/3 of the voters in the District. A CFD is for the purpose of selling tax-exempt bonds to finance public improvements and services. This fund generates $21,900 as interest income and we set aside $100,000 for material and supplies, services, and $3,801,930 capital outlay related to close out Emblem construction and Foster fire alarms. The ending balance will be $3,657,186 at June 30, The CFDs are as follows: CFD Saugus/ Hart Facilities Financing Authority CFD Tesoro CFD Plum Canyon/Skyblue Area CFD Tesoro CFD West Creek, Area 1, Area 2, and Area CFD River Village, Area CFD C Saugus/Castaic 18

21 BOND INTEREST AND REDEMPTION FUND (Fund 51): This is used for the repayment of bonds issued for the District. The total revenues of $5,751,340 includes State subventions for homeowner's exemptions, secured and unsecured taxes, prior years' taxes and interest income. The total expenditures of $5,368,325 are limited to bond interest, redemption, and related costs. According to Education Code Section 15234, any money remaining in this fund after the payment of all bonds and coupons payable from the fund, or any money in excess of an amount sufficient to pay all unpaid bonds and coupons payable from the fund, shall be transferred to the general fund upon order of the county auditor. The ending balance will be $5,165,279 at June 30, DEBT SERVICE FUND FOR BLENDED COMPONENT UNITS (Fund 52): This fund is used to account for the accumulation of resources for the payment of principal and interest on bonds issued by Mello-Roos Community Facility District. The total revenues of $6,667,484 represents taxes and interest income. The total expenditures of $5,143,966 represents debt services payments. The ending balance will be $17,577,509 at June 30, DEBT SERVICE FUND (Fund 56): This fund is used to account for the accumulation of resources and payment of principal and interest on long term debt. The District does not have any current activity budgeted in this account. The District is planning to close this fund in FY The projected ending balance is $0 at June 30, OTHER ENTERPRISE FUND (Fund 63): This fund is used to account for any activity for which a fee is charged to external users for goods or services. The Child Development Programs have been treated as an Enterprise Fund, since the programs are not subsidized by state or federal funds and are operated with the intent of recovering the costs of the program through parent fees. This fund will be able to pay-off its portion of the existing lease revenue bond in FY Total revenues are $5,047,825, which includes interest income in the amount of $30,000, and fees collected in the amount of $5,017,825. The total expenditures are $6,160,833. It takes people to teach people; therefore, the biggest expenditures are total compensation including certificated salaries, classified salaries, and employee benefits in the amount of $4,491,369. The other expenditures in the amount of $1,669,464 include material and supplies, services and other operating expenditures, and capital outlay site improvement project located at the Emblem location which will be self-financed using available cash in the fund and is anticipated to be completed in mid-summer The ending net assets will be $3,773,908 at June 30,

22 Final note: Due to the continued slow Economic recovery, continued district-wide annual declining enrollment and the remaining State deferrals, the District will continue facing fiscal challenges. It is imperative that the Board and the staff continue to seek and fully implement the cost containment programs and reductions and investigate all possible revenue enhancements. There are some differences between the Los Angeles County Office of Education (LACOE) budget assumptions and those release by School Services of California (SSCAL). The primary difference is in the deficit factor. LACOE recommended using the current rate in the law of % as opposed to the SSCAL rate of % which is based on a best guess of where the rate will be in the final budget. If the State decides to reduce the deficit the district could see additional revenue limit funding. The tables below are to illustrate the difference between the District proposed budget for adoption using current law and the anticipated effects of the Local Control Funding Formula (LCFF) Trailer Bill AB 97 model to the District s budget: FY FY FY Total Revenue $70,656,894 $73,441,497 $71,075,398 Total Expenditures $76,693,277 $75,084,667 $75,811,335 Net ($6,036,383) ($1,643,170) ($4,735,937) Beginning Balance $8,663,551 $2,627,168 $983,997 Ending Balance $2,627,168 $983,997 ($3,751,940) Required Reserve $2,300,798 $2,252,540 $2,274,340 Non spendable $92,500 $92,500 $92,500 Current Surplus/(Shortfall) $233,869 ($1,361,043) ($6,118,780) Beginning Balance $8,663,551 $5,041,168 $6,208,344 Additional Revenue from LCFF Compromise 2,414,000 5,016,000 6,793,000 Adj Beg Balance $11,077,551 $10,057,168 $13,001,344 Net ($6,036,383) ($1,643,170) ($4,735,937) Payback Fund 20& 17 $0 ($2,205,653) $0 Adjusted Ending Balance $5,041,168 $6,208,344 $8,265,407 Required Reserve $2,300,798 $2,252,540 $2,274,340 Nonspendable $92,500 $92,500 $92,500 LCFF Surplus/(Shortfall) $2,647,869 $3,863,304 $5,898,567 20