Piedmont Unified School District. Second Interim Report March 14, 2012

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1 Piedmont Unified School District Second Interim Report March 14, 2012

2 Piedmont Unified School District Second Interim Report March 14, 2012

3 Support Information The budget document is a reflection of the District s goals and philosophy and is consistent with its priorities of providing a breadth and depth of educational program for all students while maintaining highly qualified staff by providing a competitive compensation package.

4 Support Information Governing Boards are required to certify the financial condition of school districts twice during the school year. A Positive Certification means the District believes it will be able to meet financial obligations for the remainder of the current fiscal year and subsequent two fiscal years.

5 Support Information Certification is based on the General Fund Summary of Revenues and Expenditures as presented in the Interim Reports. The District submitted a Positive Certification for the First Interim Report in 12/2011, with notice that it would begin to address a $1.2M shortfall in the school year by presenting various scenarios for Board consideration.

6 Support Information Since the presentation of the First Interim Report in December, the Governor s proposed Budget unveiled in January continues to has changed the financial landscape for how district s will develop and adopt their budgets for next year: The Governor s education budget includes trigger reductions if November tax initiatives fail. Districts must consider and calculate their total exposure under a worst-case scenario, while understanding a host of variables will alter these calculations several times in the coming months.

7 Budget Assumptions The Second Interim report is based on assumptions in place on January 31, 2012, including actual revenue and expenditures The Second Interim report does not anticipate results of State-wide tax initiatives, but does consider the financial impact of a loss of $370/ADA and further reductions to the Revenue Limit should there be no Cost of Living Adjustments and increases to the Deficit Factor

8 Revenue Limit Shortfall Average Unified District - (Piedmont Unified ) $7,500 Projected Statutory COLA Dollars Per ADA $6,500 $5,500 $5,837 $5,837 $6,150 $5,668 Flat Funding Actual Funding $6,411 $6,387 $5,358 $6,535 $5,375 $6,742 $6,904 Loss of COLA Loss of baseline dollars $5,070 $4,936 $4,935 $4,

9 PUSD Revenue Limit $1260 $1806 $1969 $6150 $6411 $6387 $6535 $6742 $6904 Revised 03/14/2012 $5668 $5070 $5358 $5375 $4936 $4935 $7,000 $6,000 $5323 $5837 $5277 $5585 $5,000 $5086 $4,000 $3,000 $2,000 $1, /5 2005/6 2006/7 2007/8 2008/9 2009/ / / / /14 Actual Per Pupil Statutory

10 Budget Assumptions The Second Interim report does not anticipate results of potential State-wide ballot measures, but does consider the financial impact of a loss of $350/ADA and added cost ($305k) for mental health services (AB3632) shifted to school districts should the Governor s Proposed Budget fail

11 The General Fund Second Interim Revenue: -$86,454 A $137,195 mid-year cut is noted as an adjustment to the reserve fund balance. State Revenue increased $193,415, but is lower than anticipated as part of the State Mental Health (AB 3632) reimbursement ($135k) the District hopes to receive later this year. Lottery revenues increased $43k; the District received $16k for transportation, counseling, math, and reading programs. A decrease in local revenue of -$33,170 is due to unreimbursed AB 3632 funding (-$371k) offset by donations to the Wellness Center ($26k); revised income contributions of ($95k) from parent clubs, PEF, music donations, special education; receivables from associated student body funds, grants, principal resource accounts, and athletic fees ($216k).

12 The General Fund Second Interim fte 112.2fte Expenditures: $178,639 Increases in benefits attributed to qualifying event changes ($83,416) in medical plans; Classified salaries reflect additional personnel for specialized programs; Certificated salaries include substitutes and adjustments to salary calculations Cost of Books/Supplies and Services/Operations are booked against revenues received, though trail unreceived AB3632 revenue

13 Ending Fund Balance: $3,261,189 The General Fund Second Interim The projected ending balance on June 30, 2012 is $3,261,189 which represents 10.6% of total expenditures. AB 1200 requires districts to maintain a reserve of 3%. $2,314,062 is the balance for use in in excess of the 3% required reserve.

14 Multi-Year Projections Second Interim Multi-year Projections /13 Revenue Assumptions Revenue Limit & Categorical funds receive no COLA (0% vs. 3.17% from SSC) % Deficit Factor (up from %) Loss of $912k ($370/ADA) if November tax initiatives fail A recommended 5% increase in the parcel tax revenues from Measure B as approved by the voters in June 2009; Measure E funding expires Piedmont Education Foundation of $168,769 ongoing Parent Club contributions of $1.55M ongoing w/ additional $100/pupil Transfer of $245k from Parcel Tax Reserve

15 Multi-Year Projections Second Interim Multi-year Projections /13 Expenditure Assumptions No salary schedule increases; Step&Column and Longevity salary increases for qualifying employees of 1.5% ($293k) Continue furlough days for all Certificated/Classified ($450k savings) No PKS reductions (layoffs) for Certificated or Classified Staff $20k transfer to Capital Facilities Fund for future Witter Field improvements 0% increase in District-paid health and welfare benefits for employees; additional cost increases assumed by employees

16 Multi-year Projections 2012/13 Expenditure Assumptions Multi-Year Projections Second Interim One-time categorical funds expended with unexpended funds reserved for the program from which the funding originated 2012/13 Ending Fund Balance is $590,184, $338,516 below the required 3% reserve

17 Multi-Year Projections Second Interim Multi-year Projections /2014 Revenue Assumptions Revenue Limit & Categorical funds receive no COLA (0% vs. 2.40% from SSC) Continued % Deficit Factor Loss of $917k ($370/ADA) if November tax initiatives fail No increase in the parcel tax revenues from Measure B; same rate as Piedmont Education Foundation of $168,769 ongoing Parent Club contributions of $1.55M ongoing w/ additional $100/pupil No transfers from Parcel Tax Reserve

18 Multi-Year Projections Second Interim Multi-year Projections /13 Expenditure Assumptions No salary schedule increases; Step&Column and Longevity salary increases for qualifying employees of 1.5% ($297k) Continue furlough days for all Certificated/Classified ($450k savings) $20k transfer to Capital Facilities Fund for future Witter Field improvements 0% increase in District-paid health and welfare benefits for employees; additional cost increases assumed by employees

19 Multi-Year Projections Second Interim Multi-year Ending Fund Balance Assumptions 2012/13 Ending Fund Balance as of March 2012 = $590,184 if the loss of $370/ADA occurs 2013/14 Ending Fund Balance as of March 2012 = $2,593,346 if the loss of $370/ADA occurs

20 Summary & Recommendation Multi-year projections follow the Governor s Proposed Budget assumptions, and will be amended for the Adopted Budget in June, 2012 as more information is learned The Alameda County Office of Education works with each district to address its unique circumstances and supports PUSD s budget development process for 2012/13

21 Summary & Recommendation The staff, Board of Education, and community at large understand the consequences of the State s budget uncertainties and plan accordingly. The Board s directive to build strong reserves and its ability to increase revenue and reduce expenses as needed will provide time to respond to economic uncertainty.

22 Summary & Recommendation The District business services staff will work closely with the Business Services department at Alameda County Office and in consultation with School Services of California. The Alameda County Office of Education is dedicated to supporting Piedmont to assure requirements of AB 1200 and the Daucher Bill are met.

23 Summary & Recommendation The Budget Advisory Committee (BAC) is a standing committee with representatives from all stakeholders in the District, and is a vehicle for dissemination of information to as many parents, students, staff and community members as possible. Its purpose is to review the District s budget, share the information with constituent groups, and generate recommendations for Board consideration in the budget development process.

24 Recommendation: Action Upon review of the Second Interim Report, approve a Positive certification of the District s capacity to meet financial obligations for the current year and subsequent two fiscal years, and authorize the appropriate budget transfers to reflect the amounts presented.

25 Adult Education Fund Adult Education is balanced for and contributions to the General Fund in the amount of $120,000 remain ongoing Adult Educations continues to offer diploma program classes and activities for senior citizens at no cost to the public The Adult Education Fund has built reserves for use in case of economic uncertainty in future years

26 Adult Education Fund The Adult Education program is self-sufficient, operating independently of the District s General Fund. The Adult Education Fund remains fiscally solvent for 2011/12 and beyond

27 Cafeteria Fund The Cafeteria Fund is a separate fund for which the District tracks all food services operations. Food services at the elementary sites are exclusively operated by parent volunteers. Food service at PHS and PMS require 2-3 employees whose salaries are accounted for through this fund. All costs associated with the operation of the food services provided to the students are wholly supported by the Parent Club organizations.

28 Cafeteria Fund Revenue is anticipated to increase by the cost of salary and benefits for employees in the multi-year projections. Expenses include a 1.5% increases in salaries (longevity) for eligible employees This fund does not receive contributions from the District General Fund.

29 Deferred Maintenance Fund Expenditures for this fund support the District s Five-Year Deferred Maintenance Plan. Costs reflected in services and operating expenses remain the same, and the use of Deferred Maintenance funds in support of Seismic Safety Bond projects is ongoing. The Board-approved deferred maintenance contract for transpired after January 31, 2012, and is not included in multi-year projections.

30 Deferred Maintenance DM funds are used in support of the Seismic Safety Bond Program where appropriate DM fund projections show modest growth over the multi-year projections

31 Building Fund The Building Fund is the fund for which all voterapproved Bond measure proceeds are accounted Expenses for Seismic Safety Bond Program projects continue in this fund, but must now be accounted for in the State School Facilities Fund (as modernization funds) applied to building projects. The Citizens Oversight Committee makes its annual report to the Board this evening

32 Building Fund Reports on the Building Fund do not show State funds received. They are tracked in a separate fund (Fund 35). Multi-year projections anticipate completion of SSBP projects in

33 Capital Facilities Fund The Capital Facilities Fund is a fund for capital projects as identified by the Board of Education. Interest earnings, capital improvement projects (funded through donations), and limited facilities rental fees reflect any current changes to this fund.

34 Capital Facilities Projected transfers from the General Fund of $20,000 from rental receipts will go toward the replacement costs for Witter Field and Witter Track.

35 State School Facilities Fund The State School Facilities Fund is where restricted money received from the State of California for the modernization and construction of school facilities is held. It is different from the Building Fund, which contains proceeds from the voter-approved Bond measure. Funds from the School Facilities Fund will be transferred to the Building Fund as needed to complete seismic safety bond projects.

36 State School Facilities All funds are shown as expended for , though adjustments will be made at the June Adopted Budget once the final GMP for Beach School is determined

37 Parcel Tax Reserve Fund The Parcel Tax Reserve Fund was established for funds from the first year of the current Parcel Tax approved by voters to support programs as necessary in later years of the term of the tax

38 Parcel Tax Reserve The Second Interim Report identifies using all funds currently set aside for the final year of the tax ( ) during the school year if the November tax initiative(s) fail.

39 NODA Fund The NODA Fund was established by the Board of Education to use the proceeds from the sale of a mural by the artist Noda to establish a fund from which the interest earned is used for grants to support visual arts at the secondary level.

40 NODA Fund There are no significant changes in the multi-year projections since award amounts have not been announced.