... - Narrative General Fund Revenue Expenditures. Enrollment. MCFARLAND UNIFIED SCHOOL DISTRICf Budget. Assumptions TABLE OF CONTENTS

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1 //... I... - Narrative General Fund Revenue Expenditures \..-- Enrollment MCFARLAND UNIFIED SCHOOL DISTRICf Budget TABLE OF CONTENTS Assumptions INTRODUCTION General Board of Trustees Superintendent & Assistant Superintendent Governor's Budget Budget Projections General Fund, Other Fund and Budget Detail in State Format.- 45 Day Revise Summal"), of Account Code Structure

2 McFARLAND UNIFIED SCHOOL DISTRICT Board of Trustees Ramon Melendez Marin Ortega. Jr. ReyDeLeon David Arguello TunKasiner Gabriel McCw1is Superinteodent PUBLIC NOTICE OF PUBLIC HEARING MCFARLAND UNIFIED SCHOOL DISTRICT 1. Proposed budget will be available for public inspection: DATE(S): Friday, June 13,2008 LOCATION/ADDRESS: McFarland Unified School District Office 601 2nd Street McFarland, CA Public Hearing: DATE(S): Tuesday, June 17,2008 TIME: 5:00 P.M. LOCATION/ADDRESS: McFarland Unified School District McFarland High School 259 Sherwood Avenue McFarland, CA Candi Clark, CBO Dated: June 5, 2008 Published: June 10, 2008 (Bakersfield Californian) Mcfarland Unified School District 601 Second Street Mcfarland., CA (661)

3 PROOF OF PUBLICATION ( C.C.P.) (GENERAL FORM) STATE OF CALIFORNIA County of Kern P!,I&1JC NQnCE I, the undersigned, am a citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the above entitled matter. I am the chief clerk/publisher of The Wasco Tribune, a newspaper of general circulation, printed and published weekly, in the City of Wasco, County of Kern, and which newspaper has been adjudged a newspaper of general circulation by the Superior Court order number , of the County of Kern; that the notice, of which the annexed is a printed copy, has been published in each regular and entire issue of said newspaper and in any supplement thereof on the following dates, to-witvmcly d).j1 aoof T certify (br a/clare) under the penalty of perjury lat the forego~d c~ (Signature) ~ J--~ -O~ Executed on 0: at Wasco, California The WASCO TRIBUNE P.O. Box Y Phone (661) Wasco, California 93280

4 Board of Trustees 'on Melendez Marin Ortega, Jr. ReyDe Leon David Arguello Jim Kasiner Gabriel McCurtis Superintendent Candi Clark Chief Business Official TO: FROM: DATE: RE: Gabriel McCurtis, Superintendent Candi Clark, Chief Business Official June 17, Budget Attached is the Budget and the required supporting data. This packet of information includes the following items: 1. Budget Narrative 2. State Budget Report 3. Criteria and Standards Report 4. Budget/Enrollment Projections and Ratio Analysis 5. Other Funds Recommendation: Staff recommends that the Board of Trustees approve the budget. 1

5 MCFARLAND SCHOOLS Browning Road Elementary School K-5 Kern Avenue Elementary School K-5 McFarland Middle School 6-8 McFarland High School 9-12 McFarland Independent Study 9-12 San Joaquin High School

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8 ~' '., 'II Narrative General Fund Revenue Expenditures,., I. ' ,..-"

9 REVENUE Revenue is categorized into two major components: "Restricted" and "Unrestricted" dollars. Restricted dollars are revenue provided by a federal or state donor. The money must be used as specified by the program in which the donor approved. Unrestricted dollars are revenue that can be spent by the district in almost any manner to provide an education to children. This means that the only true discretionary funds a district has to spend are "Unrestricted Dollars". The McFarland Unified School District "Unrestricted Dollars" for the year amount to 22,349,774 or about 67% of our total revenue of $ 33,262,306. "Restricted Dollars represent $ 10,912,532 or 33%. McFarland Unified School District Anticipated Revenue Other State Rewnue 25% Local Rewnue 2% Federal Rewnue 11% Rewnue Umit 62% Revenue Limit. Federal Revenue 0 Other State Revenue 0 Local Revenue 5

10 REVENUE LIMIT -20,842,959 The Revenue Limit is income received from the State for the Average Daily Attendance of students. Besides the benefit to the child, it is obvious to see the importance for the District to ensure that students are properly recorded as being in class. This revenue is the largest source of income representing over 62% of our total money received. The projected Revenue Limit Sources for the year is $20,842,959 based upon an average daily attendance (ADA) of 3,200 or enrollment of 3430 students. We have projected some growth due to the historical birth rates in the area. We are expecting a 5.66% Cost of Living Adjustment or COLA; however, the State is projected to deficit the COLA by 5.36%. FEDERAL REVENUE -3,548,991 Federal Revenues are $173,382 less than last year. This is due to not having the carryover balances calculated at this time or any new entitlements for the year. These balances and entitlements are traditionally prepared in the fall around November. This money is restricted and can only be spent in programs and on items the donor wishes; therefore it does not impact our budget decisions. In other words, for the most part these programs are an in-and-out part of our budget. Federal revenues for represent 11 % of the budget income or $3,548,991. OTHER STATE REVENUE -8,335,907 Other State Revenue is primarily comprised of Lottery, Class Size Reduction, School Improvement or SIP (which is restricted), Economic Impact Aid (EIA, which is also a restricted income), and various reading and math programs (all restricted revenue). This component of our revenue represents 25% or $8,335,907. From last year this budget line is $56,437 less due to the governors proposed across the board cut to categorical funds. Also Lottery projections for education have been reduced from $143 ($121 unrestricted, $22 restricted) per unit of ADA to $131 ($115 unrestricted $16 restricted) per unit of ADA for a total loss of $12 per ADA. LOCAL REVENUE-534,449 The primary revenue source in Local Revenue is Special Education funds, although we have other local grants that fall into this category such as interest income, First 5 Preschool, and Paramount Farm Grants. Interest income is a function of how much money we receive, how quickly we can obtain it, and how long we can hold this money. We have a spending pattern that shows we spend our money throughout the 12 months rather than during the traditional ten-month school year. For the school year, we are expecting a decrease of $144,020 or 0.43%. The loss is due to over budgeted MediCal Reimbursements in This part of the revenue represents 2% of our total revenue or a total of $534,449. 6

11 Revenue Summary Overall, the District is projected to receive about $33,262,306. This is about 1.98% or $658,934 more than last year. The increase is primarily due to increases in average daily attendance (ADA). 7

12 EXPENDITURES Expenditures have matching categories as the Revenue: "Restricted" and "Unrestricted". As noted before, the designation reflects how the money can be spent. McFarland Unified School District Anticipated Expenses Capital Outlay 0.305% Other Outgoing 3.690% Indirect Cost 0.093% Ser.,;ces/Other Operating 9.668% Other Financing 0.100% Certificated Salaries % % Classified Salaries % II Certificated Salaries o Books/Supplies Other Outgoing Classified Salaries 0 EE Benefits Ser.,;ces/Other Operating Capital Outlay o Indirect Cost Other Financing 8

13 CERTIFICATED SALARIES -13,964,694 Certificated Salaries have increased by $224,203 OR 1.6%. This increase is due to small growth in FTE to cover staffing in order to implement the Quality Education Investment Act (QEIA) grant. The grant requires additional class size reduction in grades 4-8. CLASSIFIED SALARIES - 4,281,651 Classified salaries have decreased by $161,275. This decrease is due to a redistribution of expenditures in the restricted programs and also an adjustment to unrestricted as a result of the recent salary settlements, reconciliation of position control and of categorical programs. EMPLOYEE BENEFITS - 6,714,522 Employee benefits are a direct reflection of salaries and the number of budgeted employees. This year the employee benefits have decreased $64,584. Benefit decreases are a result of a reduction in worker's compensation, reconciliation of position control and of categorical programs. BOOKS AND SUPPLIES - 3,633,122 Books and Supplies have decreased at this time by $1,286,675. This change in budget reflects changes within the restricted programs and grants. The primary reason for this decrease is the reduction of carryover funds in categorical programs. At the end of 06-07, MUSD had roughly 2.9 million in unspent carryover in categorical programs. Much of the carryover was sent in and is not budgeted in Once the books will be closed in August, we will adjust all categorical programs to encompass any carryover for SERVICES AND OTHER OPERATING EXPENSES - 3,209,225 This area of the budget is used for payment of services of contractors outside the District such as repair of computers, copiers, heating and air conditioning, other maintenance agreements, outside consulting services, legal services, auditors, phones and the payment of utilities and insurance. For the school year, this area shows a decrease of $384,350. This reflects a loss of carryover funds from the previous year. CAPITAL OUTLAY - 101,324 Capital Outlay is the purchase of new equipment or improvement to buildings. This 9

14 area of the budget reflects a $88,886 reduction from The decrease is due to purchases made in this past year that will not be purchased in OTHER OUTGOING -1,224,742 These expenses represent tuition payments, transfers in/out, and debt services. Transfers are to other funds to support programs within the District. For MUSD, these are payments to the County for Special Education excess costs. This year we will experience an increase of approximately $151,849. The increase is due to increases in excess costs to the County for Special Education programs. DIRECT SUPPORTIINDIRECT SUPPORT - (30,761) Direct and Indirect Support costs reflect the associated support costs of categorical programs. This year, the indirect cost rate is 6.85%. OTHER SOURCES/USES - 33,057 Interfund Transfers and Other Sources and Uses represent contributions Self Insurance and Deferred Maintenance. The budget reflects a deferred maintenance contribution from two sources, Fund 01 and Fund 21. The budget did not reflect a contribution to the deferred maintenance program; however, as part of the budget cleanup, the contribution was set up. Expenditure Summary Expenditures are budgeted to be $33,131,576 which is a $1,575,226 decrease from the school year. It can further be shown that of this estimated 33 million dollars, % or 24,960,867 represents employee salaries and benefits. The balance of our budget outside of all salaries and benefits is about % representing 8,301,439 and is spent on supplies, equipment, rents, utilities, insurance, etc. Of this, 5,586,420 are restricted dollars and can only be spent as the donor so designates. This leaves the District a whopping 8.16% of the total budget or $2,716,019 of the budget as discretionary money. With this discretionary money, we must pay the utilities, insurance, and leases amounting to about $2,584,269. The remaining is left to spend on books, supplies and other equipment. We are also required to maintain a reserve of 3% or $993,947 of our budget for a district of our size. We have balanced the budget by making reductions throughout various budget lines. In addition, we are projecting some growth, per our CBEDS and the enrollment study. Ending balances are being conservatively projected for the year. 10

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17 ENROLLMENT Budget projections require a certain amount of assumptions to provide a projection. After kindergarten projections and the growth assumptions used to derive them have been prepared, projecting enrollment becomes an analytical task. By distributing the cohort growth factors by grade and on historical trends, we are able to project McFarland Unified School District's enrollment. Factoring in fluctuations in the District's ADA and students served by county programs, an adjustment factor is calculated against enrollment to derive the ADA. In our budget projections, we project enrollment and ADA (average daily attendance) to be: Year Enrollment 3,430 3,506 3,640 3,640 ADA 3,200 3,300 3,432 3,467 On the Revenue Limit section of the state report (form RLI), we have noted that ADA (average daily attendance) projected to be 3,200 which includes County operated programs ~ ~ ~ CBEDS :;;>'". ~ 4'r'" ~ -~ " /02-07/

18 Historical Enrollment 3300 / V 3000 V 2900 V 2800.V 2700 V 2600 V lv 2400 i<"- c= e:::. - f I- - - r-- f c:::. - r-- I- - - I- I- - f--- I- - - i- f f l- f I-,- I p - - -,~ i- f--- I- 17 I_ Enrollment 1 13

19 " /l r'.- \ e"." ';..' :...-- / (1 -t 2- t ~ I. ~ -. L, ~ / c;~ ~.!, '-' \, \ \ Assumptions