Benicia USD: Budget Update, 2/1/2018
After receiving information from the Governor’s January Budget Proposal, BUSD needs to make $800,000 in ongoing budget adjustments to provide a balanced budget and provide for the state’s required minimum 3% reserve for economic uncertainties ($1.4M) and the board policy reserve ($2M). Both reserves help to provide financial stability to the district in such times as declining student enrollment, state and economic recessions, or an economic slow-down.
Based on the Governor’s January Budget Proposal, the Governor is proposing to provide some one-time funds to California Schools, and BUSD would receive an estimated $1.3M in one-time funds. BUSD plans to spend these funds on one-time items like books, technology, 21st century classrooms and professional development, including the instructional coaching model. BUSD is not proposing to spend these one-time funds on “on-going” items. The on-going items would be items that have a cost to the district year-after-year unless some action was taken to stop the on-going expense.
The Governor also proposes to fully fund California schools under the State’s Local Control Funding Formula (LCFF). Included in the LCFF funds are a base grant and a supplemental grant. The base grant may be used to serve all students and the supplemental grant is to be used for students who are part of one of three groups: lower socio-economic, English-learners or foster youth. For 2018/19, BUSD is required to show how it uses a projected total of $1.6M in supplemental grant funds to serve its students. As a condition for receiving any of the LCFF funds, the district must provide a Local Control Accountability Plan (LCAP). Development of the LCAP includes a detailed process for soliciting input from community stakeholders.
As proposed, the LCFF would provide an estimated additional $1.5M to BUSD. From the LCFF amount, the district must pay $1.1M for increased on-going employee salary costs for “step and column” on the salary schedules and for increased on-going employee pension.costs to the employee retirement systems for the State Teachers’ Retirement System (STRS) and the Public Employees’ Retirement System (PERS). In addition, the district must pay an additional $100K for on-going special education and restricted facility costs, and it must cover an on-going operating deficit of $1.1M from the 2017/18 fiscal year. The 2017/18 operating deficit does include the costs of the negotiated salary increases from 2016/17 which were a minimum 2.25% or $0.80/hour (an actual range of 2.25% to 6.69%) for the CSEA classified union, effective 7/1/2016, 2.25% for management employees effective 7/1/2016, and 3.5% for the Benicia Teachers’ Association (BTA) effective 4/1/2017. After these on-going costs are subtracted from the LCFF funds, the remainder is a negative eight hundred thousand dollars (-$800,000), and that is the amount being considered for on-going budget adjustments.
At the beginning of each budget cycle, BUSD adjusts its staff based on student enrollment and contractual staffing ratios. Student enrollment has been declining over the last few years; therefore, BUSD will reduce staffing by the following: 4 secondary teachers, 2.5 special ed teachers and 3 special ed classified staff. There is also 1 additional temporary teacher filling in for a teacher on leave, and that coverage will not be needed in 2018/19. The savings from adjusting that staffing to student enrollment and contractual levels is an on-going $700,000. The remaining on-going $100,000 would be achieved through shifting responsibilities from a psychologist and counselor to district and site administration, with the savings equivalent to 1 psych/counseling position. Most, if not all, position adjustments would be covered through attrition. The district will report back to the board on the attrition in March.
Negotiations with our employees have not been settled for the current 2017/18 or the following 2018/19 school year. These financial projections do not include any potential costs that would be associated with settled negotiations for either of those years. Negotiations are currently underway with BTA and will start soon with CSEA. Based on the Governor’s January Budget Proposal, and after providing for the $800,000 in budget adjustments, the district is projected to operate at break-even for 2018/19, while providing the state’s required 3% Reserve and the board policy reserve. Next steps will be to provide the 2017/18 2nd Interim Financial Report in March, with budget updates over the following months, and a 2018/19 draft budget presented at the last board meeting in May. The final budget will be presented to the school board at the school board meeting in June.