Cypress School DistrictLearning. Leading. Results!

2014/15 Second Interim ReportMarch 12, 2015

PurposeSECOND INTERIM REPORT• Presents information on the District’s current

financial position as of January 31, 2015– AB 1200 and AB 1708 require County Offices to monitor

and review district budgets and financial reports

• Projects anticipated revenues and expenditures known to date

• Certifies the District’s financial status to the County as Positive, Qualified, or Negative

Cypress School Districts

2014‐15 Budget Calendar Budgeting for schools is a continuous, year-round process

Adopted Budget by June 30, 2014

First Interim by December 15, 2014– Using data through October 31, 2014

Second Interim by March 15, 2015– Using data through January 31, 2015

Public Hearing for the Local Control Accountability  Plan (LCAP) & 2015‐16 Budget by June 30, 2015

Adopt LCAP & 2015‐16 Budget– Public Hearing and actual Adoption must be performed in two separate Board 

meetings

2nd Interim Budget AssumptionsCURRENT YEAR 2014‐15• Average Daily Attendance (ADA) based on 2013‐14 P2 ADA

• New funding model under LCFF

• Certificated staffing implemented to formula and meets collective bargaining agreements in place

• Anticipated encroachment amount for special education and transportation (in excess of state and federal funding) of $3.6 million has been factored

ADA Base Gr. Span Supp Concen TargetGrades K‐3 2,190.05 7,011 729 683 n/a 18,446,791

Grades 4‐6 1,755.26 7,116 n/a 628 n/a 13,592,733

TOTAL BASE 3,945.31 27,844,871 1,596,546 2,598,107 n/a 32,039,524

2nd Interim Budget AssumptionsFORECAST YEARS 2015‐16 & 2016‐17• Statutory Cost of Living Adjustment

– 2015‐16 1.58%– 2016‐17 2.17%

• LCFF gap funding (Dept. of Finance & O.C.D.E. recommendations) :– 2015‐16 32.19%– 2016‐17 23.71%

• Future ADA projected to decline next 2015‐16 school year (see next slide)

• Certificated staffing implemented to formula and meets collective bargaining agreements in place

• Anticipated encroachment amount for special education and transportation (in excess of state and federal funding) of $3.6 million has been factored

• Step and column costs for both certificated and classified salaries have been factored

Cypress School District

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Student Enrollment Trend

Students

Decline Projected3,806

Current Enrollment3,990

2002/03 enrollment was 4,900

Future STRS & PERS projections…*  Data below does not factor additional staff hired for class‐size reduction, etc.

*  Does not factor additional staff hired for class‐size reduction, etc.

STRS 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20CertificatedSalaries

15,407,867 15,388,087 15,772,789 16,167,109 16,571,287 16,985,569 17,410,208

Dartboard 8.25% 8.88% 10.73% 12.58% 14.43% 16.28% 18.13%

CalSTRS 1,271,149 1,366,462 1,692,420 2,033,822 2,391,237 2,765,251 3,156,471

Change Year‐to‐Year

n/a 95,313 325,958 341,402 357,414 374,014 391,220

Change from 2013‐14

n/a 95,313 421,271 762,673 1,120,088 1,494,102 1,885,322

PERS 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20ClassifiedSalaries

4,687,599 4,497,697 4,587,651 4,679,404 4,772,992 4,868,452 4,965,821

Dartboard 11.442% 11.771% 12.600% 15.00% 16.60% 18.20% 18.20%

CalPERS 536,355 529,424 578,044 701,911 792,317 886,058 903,779

Change Year‐to‐Year

n/a (6,931) 48,620 123,867 90,406 93,742 17,721

Change from 2013‐14

n/a (6,931) 41,689 165,556 255,962 349,703 367,424

2014‐15 SECOND INTERIM BUDGETTOTAL REVENUE – GENERAL FUND

RevenuesFirst 

InterimSecond Interim Variance

LCFF / Revenue Limit Source $  26,178,474 $   26,162,580 $     15,894

Federal Revenues $    1,331,959 $     1,332,007 $             48

Other State Revenues $    2,889,666 $     3,121,624 $   231,958  

Other Local Revenues $    2,889,422 $    2,913,067 $     23,645 

Total Revenues $  33,289,521 $  33,529,278 $  239,757

2014‐15 SECOND INTERIM BUDGETTOTAL REVENUE – GENERAL FUND

Total Revenues = $ 33,529,278

2014‐15 SECOND INTERIM BUDGETTOTAL EXPENDITURES – GENERAL FUNDExpenditures

FirstInterim

SecondInterim Variance

Certificated Salaries $  15,927,399 $  16,037,792 $  110,393

Classified Salaries $    4,943,341 $    5,048,515 $    105,174

Employee Benefits $    5,764,947 $    5,800,933 $       35,986

Books & Supplies $     1,993,039 $    1,944,742 ($    48,297)

Services, Other Operating Expenses $    2,949,637 $    2,985,732 $      36,095

Capital Outlay $     1,209,113 $   1,229,991 $     20,878         

Other Outgo  $        617,359 $      617,359 $                0        

Total Expenditures $  33,404,835 $ 33,665,064 $ 260,229

2014‐15 SECOND INTERIM BUDGETTOTAL EXPENDITURES – GENERAL FUND

Total Expenditures = $33,665,064

GENERAL FUND OVERVIEWUnrestricted / Multi‐Year

2014‐15(as of Jan 31) 2015‐16 2016‐17

Beginning Balance $7,992,712 $8,432,218 $9,575,969

Projected  Revenue $25,893,215 $27,878,777 $28,031,027

Total Available Sources $30,261,731 $36,310,995 $37,606,996

Projected  Expenditures $25,453,709 $26,735,026 $27,801,151

Contributions to Restricted Fund* $3,624,196 ** $3,624,196 ** $3,624,196

Required Reserves $1,009,952 $1,031,133 $1,063,117

Difference Projected Revenues to Expenditures $439,506 $1,143,751 $229,876

Projected Ending  Balance $8,432,218 $9,575,969 $9,805,845

* Includes encroachment by Special Education & Transportation    ** Assumes cost containment 

DISTRICT’S BUDGET PRIORITIES

Continue Vigilance in Maintaining "Best Fiscal Practices"

Maintain Positive Certification Status

Cash Management –Closely Monitor Cash Flow Projections

Communication to ALL Stakeholders

Future Adjustments Resulting From2015‐16 Contract Negotiations

GOALS

CERTIFICATION DEFINITION

POSITIVE = A school district that, based on current projections, will be able to meet its financial obligations for the current year and subsequent two fiscal years

• QUALIFIED = A school district that, based on current projections, may notmeet its financial obligations for the current fiscal year or subsequent two fiscal years

• NEGATIVE = A school district that, based on current projections, will be unable to meet its financial obligations for the current fiscal year or for subsequent two fiscal years

Current Projections based on 2nd Interim and Multi‐Year Projection (MYP)

DISCUSSION ACTION ITEM 11.12 ‐ RECOMMENDATION

Staff respectfully recommends aPOSITIVE CERTIFICATION

of the 2014‐15 Second InterimFinancial Report