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SacramentoCityUnifiedSchoolDistrict2018-19BudgetProposal

June21,2018

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Overviewv BudgetrevenueprojectionsarebasedontheGovernor’sMay

RevisenumberspertherecommendationoftheSacramentoCountyOfficeofEducationwhichprovidesfiscaloversightofthedistrict.

v Expenseprojectionsarebasedonwhatweknowtoday.Expenseamountscouldchangeafterthebudgetisadopted.

v Thedistricthas45calendardaysafteradoptingabudgettoreviseitbasedontheGovernor’sfinalsignedbudget.

v CallforIndependentFinancialAudit

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$531.02M

$559.56M

2018-19REVENUESVS.EXPENSES

ComparisonofRevenuesandExpenses

Revenues Expenses

DataSource:CaliforniaDepartmentofFinance

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$22,458,733.00

$9,692,455.00 $9,705,288.00$11,975,578.00

$-

$5,000,000.00

$10,000,000.00

$15,000,000.00

$20,000,000.00

$25,000,000.00

2018-19 2019-20 2020-21 2021-22

LCFFRevenueProjectionsbyYear

$587.58perADA

$254.18perADA$255.12perADA

$315.54perADA

Challenge1:LessLCFFFutureFundingIncreases

DataSource:CaliforniaDepartmentofFinanceandSchoolServicesofCalifornia

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AreCurrentLCFFRevenuesSufficientToCoverExpenses?

EstimatedRevenues Amount

New2018-19LCFFRevenue(Ongoing) $22,458,733

New2018-19DiscretionaryRevenue(One-Time) $13,270,760

TotalRevenueIncreases $35,729,493

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7

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IncreasingPensionExpensesExpectedToOutpaceOngoingLCFFRevenue

2016-17 2017-18 2018-19 2019-20 2020-21 2021-22

CalPERSIncrease 1,768,142 3,817,294 6,498,516 8,866,720 11,269,603 12,350,752

CalSTRSIncrease 5,751,967 10,704,843 17,405,028 22,323,712 25,257,228 25,809,647

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

DataSource:CalPERSandCalSTRS

$3,597,313.89$5,770,447.74

$(286,028.58)

$4,016,939.73$4,569,031.14

7.4% 11.1%

-0.5%

7.0% 7.4%

-$10,000,000

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

2012-13AuditedActuals

2013-14AuditedActuals

2014-15AuditedActuals

2015-16AuditedActuals

2016-17AuditedActuals

2017-18ActualsandEncumbrances

HealthCostIncreaseAmounts

TotalCost IncreaseAmount

Source:SacramentoCityUnifiedSchoolDistrictAuditedAnnualReports- http://www.scusd.edu/financial-presentations-information

IncreasedDistrictHealthCostsAnAverageOf6.5%InPast5Years

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FutureHealthCostProjectionsOutpaceFutureLCFFRevenues

CostProjectionsSource:CaliforniaHealthCareFoundationMarch2017Report“CaliforniaEmployerHealthBenefits:PricesUp,CoverageDown”whichpresentsdatacompiledfromthe2016CaliforniaEmployerHealthBenefitsSurvey.

$2,283,635.46$3,412,414.65

$3,583,035.38$3,762,187.15

3% 5% 5%

5%

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000

2017-18Audited 2018-19Projected 2019-20Projected 2020-21Projected 2021-22Projected%Change AmountChange

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Challenge3:GapsBetweenExpensesandRevenues

$375

$390

$405

$420

$435

$450

$465

$480

$495

$510

$525

$540

$555

$570

$585

$600

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

Millions

Expenditures Revenues

Westartedsignificantlyoverdrawingourcheckingaccountin2017-18

$15.9MGap

$28.5MGap

$34.4MGap

$36.5MGap

DataSources:CaliforniaDepartmentofFinance&SacramentoCityUSD

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$61,597,938

$34,660,875

$(1,509,910)

$(10,000,000)

$-

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

2018-19 2019-20 2020-21

2018-19 2019-20 2020-21

(11%Reserve)

(- 0.25%Reserve)

(6%Reserve)

Challenge4:EffectonReserves

2%reserveamountsto$10,762,555in2019-20and$10,663,864in2020-21

Inordertopayourexpenseswehavedraw fromourreserves.Thiswillbringourreservedownto$34.6Min2018-19. Ifthiscontinues,wewillwipeoutourreservesin2years.

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HowRevenue&ExpensesAreCalculatedAndProjected

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0

100,000

200,000

300,000

400,000

500,000

600,000

2013-14 2014-15 2015-16 2016-17 2017-18*

381,121414,635

466,310 491,032 480,119

405,815432,651

504,568498,061

341,171

Millions

AdoptedBudget Actuals

AdoptedRevenuevs.ActualRevenueBasedonIndependentFinancial AuditFindings*

*2017-18Year-Enddoesnotclose until lateAugust.Crowe Horwathistheindependentauditor.Source: SCUSDauditedfinancialreports:http://www.scusd.edu/financial-presentations-information

15

16

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0

100,000

200,000

300,000

400,000

500,000

600,000

2013-14 2014-15 2015-16 2016-17 2017-18*

385,021421,865

468,801493,217 500,146

384,898426,875

466,734491,870 508,383

Millions

AdoptedBudget Actuals

AdoptedExpensesvs.ActualExpensesBasedOnIndependentAudit Findings*

*2017-18showsActualsandEncumbrances.CroweHorwathisindependentauditor.

ActualExpendituresareveryclosetoAdoptedBudgetExpenditures.ActualsExpendituresaregreaterthanadoptedbudgetinfourofthefiveyears.

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AssessmentofRevenueGeneratingandCostSavingsOptions

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CostSavingOptionsforReducing$28.5MDeficitfor2018-19

Source: https://www.cde.ca.gov/fg/ac/ic/documents/icr1415to1819.xlsx

2.7%

4.6%

6.0%

5.2%

6.3% 6.

7%

3.6%

4.1%

5.0%

5.6%

6.8% 7.

0%

4.5%

4.1%

5.4% 5.

8%

5.7%

7.8%

3.9% 4.

4%

5.0% 5.

5% 5.6%

7.1%

3.3%

4.2%

4.2% 4.

5%

5.1%

6.7%

4.2%

3.9%

5.1%

3.8%

8.4%

5.7%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

Sacramento CityUnified

San Juan Unified Elk Grove Unified Folsom-CordovaUnified

Natomas Unified Twin Rivers Unified

Percentage of Administrative Expenses Allocated to Central Office*

2012-13 2013–14 2014–15 2015–16 2016–17 2017-18

*NOTE: Information reported each fiscal year is from 2 years prior.2017-18

Percentage of Central Positions 4.2%

Cost of Central Positions $ 13,895,247.00

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AmountofExternalContractExpenses

TotalRestricted&UnrestrictedFunds

$2,275,514

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2018-19BudgetRecommendations

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DistributionOfExpensesPerDollar

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EveryDollarSavedIsA DollarMoreForOurStudents

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CostofMaintainingExistingPrograms

2018 - 2019 Programs we have to fund out of our budget due to loss of funding

Amount of Funding Lost General Funds

Induction Programs $ 2,669,988 $ 1,050,000

New Technology High School $ 576,120 $ 300,000

Luther Burbank High School QEIA $ 2,086,996 $ 800,000

Curriculum & Professional Development $ 750,000 $ 121,000

Student Support Services $ 348,503 $ 64,622

Total Funding to Replace Loss of Funding $ 6,431,607 $ 2,335,622

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CostOfMaintainingExistingProgramsThatCostMoreIn2018-19

2018 - 2019 Programs we have to fund out of our budget due to loss of funding

Amount of Funding Lost General Funds

Child Development $ 1,500,000 $ 2,345,207

Youth Engagement $ 891,400 $ 1,700,000

Career and Technical Education $ 772,306 $ 850,000

Total Funding to Replace Loss of Funding $ 3,163,706 $ 4,895,207

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Proposed2018-19One-TimeInvestmentsInEquity,AccessandSocialJustice

2018 - 2019 Programs added for Equity, Access, and Social Justice Guiding Principle

Safe Haven – DACA Pipeline Credentialing Program $ 50,000

Expanding PSAT & SAT Assessments (Grades 8, 9, 10, 11) $ 34,686 Advance Placement and IB Testing (one-time) to offer

1,177 more AP exams to students $ 136,030

Student Leadership Conferences $ 50,000 Grade Level Readiness Initiative (i.e. Grad Task Force,

Low-Performing/High-Risk Student Interventions) $ 350,000

Total Investments Added $ 620,716

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2018-19ProposedExpenseReductions

Areas where cost savings can be achieved by increasing reductions

Eliminating Expanded Learning Summer Program $ 3,000,000

Central office hiring freeze $ 500,000

Dual Immersion-Bilingual Aides Title 1 Funding Shift $ 360,000

Central office position cuts $ 165,000

Student services (travel & other non-service related costs) $ 150,000

Administrative mentorship $ 100,000

HR recruitment budget $ 5,000

Total Reductions $ 4,280,000

Long-TermFundBalanceProjectionswith2018-19Reductions

$(30,000,000.00)

$(20,000,000.00)

$(10,000,000.00)

$-

$10,000,000.00

$20,000,000.00

$30,000,000.00

$40,000,000.00

$50,000,000.00

$60,000,000.00

$70,000,000.00

2017-18 2018-19 2019-20 2020-21

FundBalance RequiredFundBalance(2%)

Revenues Deficit/Surplus FundBalanceRequiredFundBalance

(2%)2017-18 $510,017,684.00 $61,597,938.00 $10,518,519.442018-19 $531,028,304.00 $(24,256,611.00) $37,341,327.00 $11,105,698.302019-20 $525,834,985.00 $(30,080,365.00) $7,260,962.00 $11,118,307.002020-21 $537,150,366.00 $(32,218,301.00) $(24,957,339.00) $11,387,373.34

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NextStepsv Budgetrevenueprojectionswillbeupdatedafterfinalstate

budgetissignedbytheGovernor.

v Districtwillclose2017-18FiscalYearandaddanycarryover.

v Districthas45daysafteradoptingabudgettoreviseitbasedontheGovernor’sfinalsignedbudgetandotherchanges.