2019-20 annual budget - boarddocs, a diligent brand€¦ · sacs budget report ... 23% since 2013,...

ManhattanBeachUnifiedSchoolDistrict

2019-20AnnualBudget(ProposedasofJune2019)

PresentedtotheBoardofTrusteesandSuperintendent

BillFournell,PresidentJenniferCochran,VicePresident

KarenKomatinsky,ClerkJenniferFenton,MemberSallyPeel,Member

MichaelMatthews,EdD,Superintendent

PreparedandPresentedbyDawnalynMurakawa-Leopard,EdD

DeputySuperintendent

June19,2019

2019-20 Adopted Budget

Table of Contents ManhattanBeachUnifiedSchoolDistrict.........................................................................................................1Overview...........................................................................................................................................................................1EconomicIndicators....................................................................................................................................................2California’sBudget.......................................................................................................................................................3TheDistrict......................................................................................................................................................................5Revenue.............................................................................................................................................................................6Enrollment..................................................................................................................................................................6LCFFFunding–BaseGrant.................................................................................................................................7LCFFFunding–SupplementalandConcentrationGrants...................................................................8LocalRevenue–MeasureMB............................................................................................................................9LocalRevenue–ManhattanBeachEducationFoundation..............................................................10OtherRevenueSources......................................................................................................................................10

Expenditures................................................................................................................................................................11CashFlow.......................................................................................................................................................................12Multi-YearProjection..............................................................................................................................................14EndingFundBalance...............................................................................................................................................20OngoingConcernsandPriorities.......................................................................................................................22BondFunds:MeasuresCandEE........................................................................................................................23OtherFunds..................................................................................................................................................................25PurposeoftheReport..............................................................................................................................................25BudgetCertification..................................................................................................................................................26DetailedBudgetForms...........................................................................................................................................26BudgetForms.........................................................................................................................................................26CriteriaandStandards.......................................................................................................................................27SACSBudgetReport............................................................................................................................................28


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ManhattanBeachUnifiedSchoolDistrict2019-20AdoptedBudget

“Somethingneedstochange.Weneedtohaveanhonestconversationabouthowwefundourschoolsatastateandlocallevel.”

- GovernorGavinNewsom1

Overview Despitethefactthatoverallperpupilfundingforeducationhasincreasedbymorethan23%since2013,whentheLocalControlFundingFormulawentintoeffect,California’sperpupilspendingremainslowerthanthenationalaverage,2andavarietyoffiscalpressuresarecreatingascenariowhere,evenwithoutanyprogrammaticexpansion,increasestoexpenditureswillfaroutpaceincreasestorevenues,pushingschooldistrictsthroughoutthestateintowhatisbeingcalledaSilentRecession.3TheManhattanBeachUnifiedSchoolDistrictwillnotbesparedfromthisscenario.Likemanydistrictsinthestate,itfacesincreasingcostsforpensions,healthbenefits,andspecialeducation,combinedwithdecliningenrollmentwhichwillrestrictrevenuegrowth.ThisisexacerbatedbythefactthatMBUSDisranked992outof999schooldistrictsinCalifornia(and343outof344unifiedschooldistricts)forperpupilfunding,placingitnearthebottomforfundingamongdistrictsinastatethatisunderfundedacrosstheboard.Inaddition,LCFFfundingisprojectedtoincreaseatafarslowerpacethanoverthepastseveralyearsduetotheLCFF’shavingreached“fullfunding”andthereforegrowingataCOLA-onlyrateforfutureyears.Thiswillcreateasituationwhere,withoutsignificantincreasestorevenue,theDistrictcouldbefacingthenecessityofmakingextraordinarybudgetreductionsinthecomingyears.Specifically,between2019-20and2021-22,LCFFandotherstaterevenueisprojectedtoincreaseby$1.6million,and,ifnoreductionsaremade,personnelcostincreasesalone(salary,pension,andhealthbenefitcosts)wouldincreasebyover$4million,withoutconsideringadditionalincreasestospecialeducationcosts,andgoodsandservices.Clearly,evenwithagenerousreserve,thisisnotsustainable.

1KatyGrimes.“Gov.GavinNewsom’sStateoftheStateAddress:ResistTrump,GrowCAGovernment.”CaliforniaGlobe.February12,2019.AccessedJune9,2019.https://californiaglobe.com/governor/gov-gavin-newsoms-state-of-the-state-address-resist-trump-grow-ca-government/.2PatrickMurphyandJenniferPaluch.“FinancingCalifornia’sPublicSchools.”PPICJustTheFacts.November2018.AccessedJune9,2019.https://www.ppic.org/publication/financing-californias-public-schools/3KelseyKrausenandJasonWillis.“SilentRecession:WhyCaliforniaSchoolDistrictsareUnderwaterDespiteIncreasesinFunding.”WestEd.April2018.AccessedJune9,2019.https://wested.org/wp-content/uploads/2018/05/resource-silent-recession-2.pdf


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Economic Indicators Onbothstateandnationallevels,economicindicatorsarepointingtoaslowingeconomy.Inparticular,whileinflationremainssteadyat2%(generallyviewedasanacceptableinflationrate),jobgrowthisslowing,asaresomeareasinthemanufacturingandservicessectorsandthecommercialrealestatemarket.Inaddition,theyieldcurveinvertedinMarch2019,4withearningsonshorttermbondsexceedingearningsonlongtermbonds.Someeconomistsbelievethataninvertedyieldcurveisastrongindicatorofanimpendingrecession;asMichaelD.BauerandThomasM.MertensoftheFederalReserveobserve,“EveryUSrecessioninthepast60yearswasprecededbyanegativetermspread,thatis,aninvertedyieldcurve.”5TheUCLAAndersonForecastprojectsslowinggrowthinnumerousareasandplacestheprobabilityofarecessionin2021atbetween24%and83%.6InCalifornia,SchoolServicesofCaliforniapointsoutthat“Californiaisaglobaleconomiccompetitor;whenthenationgetsacold,Californiacangettheflu.”7IssuessuchastradepolicyandimmigrationreformhavethepotentialtoimpactCaliforniamoredirectlyandmorestronglythanthenationasawhole,andCaliforniaisalsograpplingwiththeconsequencesofwildfiresandothernaturaldisastersthathaveravagedthestateandcreatedsignificanteconomicstrain.Theserisksarecompoundedbystructuralissuesinthestate’srevenuegeneratingmechanisms,nottheleastofwhichisthestate’srelianceonhighlyvolatilePersonalIncomeTax(PIT)revenues.ThevolatilityofthisrevenuesourcehastodowiththeinclusionofcapitalgainsinthePITbase,aswellasthestate’sprogressivetaxratestructure.CapitolAdvisorsstatesthatasrecentlyas8yearsago,onlyhalfofgeneralfundrevenuescamefromPITsources,whiletoday70%ofgeneralfundrevenuescomefromthesesources,withhalfofthat70%comingfromthetop1%ofincomeearnersinthestate(orapproximately

4SimonMoore.“ThreeAssessmentsofYieldCurveInversion,NoneareEncouragingfortheEconomy.”Forbes.June4,2019.AccessedJune9,2019.https://www.forbes.com/sites/simonmoore/2019/06/04/three-assessments-of-yield-curve-inversion-none-are-encouraging-for-the-economy/#2adcabf93c545ArjunReddy.“Acloselyfollowedrecessionindicatorisflashingitsmostworryingsignin12years.”MarketsInsider.May9,2019.AccessedJune9,2019.https://markets.businessinsider.com/news/stocks/yield-curve-inversion-3-month-10-year-yield-curve-inverts-2019-5-10281876446UCLAAndersonSchoolofManagement.“UCLAAndersonForecastsayseconomymaybeweakerthanitlooks.”UCLANewsroom.June5,2019.AccessedJune9,2019.http://newsroom.ucla.edu/releases/ucla-anderson-forecast-june-2019-us-california7SchoolServicesofCalifornia.“2019MayRevisionWorkshop.”May2019.

Figure1:3-monthto10-monthUSTreasuryYieldCurve


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17,000taxpayers).8TheothertwolargestcomponentsoftaxrevenueareSalesandUseTaxes,whichaccountforapproximately19%ofstaterevenue,andCorporationTaxes,whichaccountforapproximately9%ofstaterevenue.Remainingrevenuescomefromsmallertaxes,includinginsurance,alcohol,cigarette,andmotorvehicletaxes.BecauseofthesignificanceofthePIT,inaneconomicdownturn,whenhighearningindividualsmightnotrealizethesamecapitalgainsastheywouldinapositivefinancialenvironment,andwhenallearnersmightseedropsintheirincome,thestate’srevenuecouldfacesignificantdeclines.

California’s Budget

Thestate’sbudgetassumesongoinggrowthinstaterevenuesourcesanddoesnotprojectarecession,despiteeconomists’warningsthatadownturnislikelytooccursometimeduringtheprojectionperiod.Thebudgetproposestocontinuetobuildstatereservesbyinvesting$5.7billionintovariousreservefundsin2019-20.Therearefourmaincomponentstothestate’sreserves,andcollectivelytheywouldholdnearly$19.5billioninreservefortheGeneralFundbytheendof2019-20.Thecomponentsofthereservewouldinclude:

• $16.5billionintheBudgetStabilizationAccountestablishedbyProposition2in2014,bringingitclosetoitsconstitutionalcap;

• $1.6billionintheSpecialFundforEconomicUncertainties,ageneralpurposereserveaccount;

• $900millionintheSafetyNetReserve,setasidetosupportCalWORKandMedi-Calduringarecession;and

• $390millioninthePublicSchoolSystemStabilizationAccount.Importantly,thismarksthefirstdepositintothisaccount,alsoknownastheProp98Reserve;thelocalreservecapcanbetriggeredwhenfourconditionsareinplace,oneofwhichisthatthebalanceinthisaccountequalsorexceeds3%oftheK-12shareofProposition98fundingforthatyear(currentlyapproximately$2.1billionbasedonthecurrentproposalof$71.1billionoutofthetotal$81.1billionguarantee).

Whileitissignificantthatreservelevelswillreachnearly$20billion,theGovernornotesinhisMayRevisionthat“evenamoderaterecessioncouldresultinrevenuedeclinesofnearly

8CapitolAdvisorsGroup.“BudgetPerspectivesWorkshop:2019-20MayRevision.”May2019.

Figure2:“BigThree”TaxRevenueProjections


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$70billionandabudgetdeficitof$40billionoverthreeyears,”9meaningthatthereserveswouldprovidesomecushionbutwouldnotfullyprotectthestateintheeventofarecession.AsJerryNickelsburg,theDirectoroftheUCLAAndersonForecast,notedinDecember,“Therainy-dayfund,likealeakyumbrella,willonlykeepusfrombeingaswetaswewouldotherwisebe,butwewillbewetnonetheless.”10TheproposedbudgetincludesanumberofcomponentssignificanttoK-12education:

• A3.26%COLAforLCFFandsomeadditionalcategoricalprograms(includingSpecialEducation,theMandateBlockGrant,andChildNutrition);

• $3.15billiontooffsetschoolemployerCalSTRSandCalPERSliabilities;• $152.6milliontobegintoprovideequalizationinspecialeducationfunding,aswell

as$493.2millioningrantstosupport3and4yearoldswithIndividualizedEducationPlans;and

• Additionalone-timefundingforavarietyofthegovernor’sandthelegislature’spolicypriorities,includingfulldaykindergartenfacilities,teacherandadministratorshortageandtraining,theClassifiedSchoolEmployeesSummerAssistanceProgram,theK-12HighSpeedNetwork,thedevelopmentofaP-20longitudinaleducationdatasystem,andearlychildhoodprograms,amongothers.

ItissignificanttonotethatthisbudgetproposalclearlyrecognizesthattheProposition98guaranteeistrulyafloorandnotaceiling;theGovernor’scurrentproposalincludes$4billioninone-timefundingprovidedoutsideofProposition98.Thiskindofinvestmentissomethingthattheeducationcommunityhaslongaskedfor,andtheGovernor’swillingnesstoutilizenon-Proposition98fundstosupporteducation,evenonaone-timebasis,isanimportantacknowledgementthatProposition98alonedoesnotprovidesufficientresourcestosupporteducationinCalifornia.However,evenwiththisinvestment,Californiaschoolsremainsignificantlyunderfunded.TheCaliforniaSchoolBoardsAssociationandtheAssociationofCaliforniaSchoolAdministratorshavecompileddatathatreflectsthatCalifornia:

• hasthelargesteconomyinthenation,andthe5thlargesteconomyintheworldbut• ranks41stinthenationinper-pupilfundingwhenadjustedforcostand

o 45thinthepercentageoftaxableincomespentoneducationo 45thinstudentsperteachero 48thinstudentsperstaffmember

Theyfurtherpointoutthat,priortotheshiftinfundingcreatedbySerranov.PriestandthepassageofProposition13,Californiapublicschoolswerefundedinthetopteninthenationandnowremainsinthebottomten.11

9GavinNewsom.“MayRevision2019-20.”May2019.AccessedJune9,2019.http://www.ebudget.ca.gov/2019-20/pdf/Revised/BudgetSummary/FullBudgetSummary.pdf10JerryNickelsburg.“California’sFiscalShip:WillitSinkasFreightCarriersfromChinaTurnAround?”UCLAAndersonForecast.September2018.AccessedDecember1,2018.http://www.anderson.ucla.edu/Documents/areas/ctr/forecast/reports/Sept2018_Forecast_Nickelsburg.pdf.11CapitolAdvisorsGroup.“BudgetPerspectivesWorkshop:2019-20MayRevision.”May2019.


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Inanotheranalysis,theseventheditionofanationalreportcardcompiledbyRutgersUniversitylooksatschoolfundingequityand“fairness”fromtheperspectivesoffundinglevel(perpupilfunding),fundingdistribution(therelationshipbetweenstudentpovertyandschoolfunding),fiscaleffort(theratioofstatespendingtogrossstateproductandpersonalincome),andcoverage(theproportionofchildreninpublicschoolsandtheincomeratioofpublicandnonpublicschoolfamilies).ThereportcardnotesthatCaliforniais“poorlypositioned”oneveryindicatorandspecificallygivesCaliforniaagradeof“F”foritsfiscaleffort,notingthatCalifornia’spercapitapersonalincome($44,173)isabovethenationalaverage,butitprovidesonly$34foreach$1,000ofpersonalincometosupportschools,ascomparedwith,NewYork,whichhasacomparablepercapitapersonalincome($46,445)andprovides$55foreach$1,000ofpersonalincome,andNewMexico,whichhasconsiderablylowerpercapitapersonalincome($36,814)andprovides$48foreach$1,000ofpersonalincome(bothNewYorkandNewMexicoearnedgradesof“A”onthereportcard).Ofnote,whilethereportcardshowsthatCaliforniahasmovedupinitsperpupilrankingoverthepastseveralyears,itcontinuestoprovideapproximately2/3ofthefundingprovidedbythe10thrankedstate,showingthatwhileCaliforniamaybemakingprogresscomparedwithstatesbelowthenationalaverage,thetopfundedstatesareincreasingtheireducationinvestmentatahigherpacethanCalifornia,creatingagreatergapbetweenthetopfundedstatesandstatesatornearCaliforniaintherankings.12

The District TheManhattanBeachUnifiedSchoolDistrictserves6,550studentsfromkindergartentotwelfthgrade,plusapproximately350additionalpreschoolstudents.Studentsattendschoolateightcampuses–onepreschool,fiveelementaryschools,onemiddleschool,andonehighschool.MBUSDconsistentlyranksasoneofthehighestperformingunifiedschooldistrictsinCalifornia,anditsschoolsandprogramsreceivenumeroushonors.DistrictawardsincluderecognitionasaNationalGreenRibbondistrict,andschoolrecognitionsasCaliforniaDistinguishedSchools,NationalBlueRibbonSchools,CaliforniaGoldRibbonSchools,andCaliforniaandUSGreenRibbonSchools.TheMiraCostaHighSchooldramaprogramhasreceivedstatewiderecognition,andtheschoolishometoaGrammyawardwinningmusicprogram.MiraCosta’sModelUnitedNationsprogramisnationallyandinternationallyrecognizedandin2017-18wonitsfourthnationalchampionshipinthelastsixyears.Itsstudentnewspaper,LaVista,wasaCrownrecipientforthe2017ColumbiaScholasticPressAssociationawards.48%ofMiraCostaHighSchoolstudentsparticipateonatleastoneathleticsteam,andtheschoolwasnamedCal-Hi2016SportsD2SchooloftheYear.87%ofMiraCostaHighSchoolgraduatesattendcollegeafterhighschoolincludingStanford,Harvard,Yale,Princeton,UCLA,andUSC.67.9%ofgraduatingstudentssucceedonatleastoneAPtestduringhighschool.TheDistrictisaleaderintheimplementationofclassroomtechnology,makerspace,andSTEMprograms,andithas,overthepastfewyears,placedsignificantfocusonthesocialandemotionallearningofitsstudents,helpingthemtostrivetofindtherightbalancebetweenschoolachievementandmentalhealth

12BruceBaker,et.al.“IsSchoolFundingFair?ANationalReportCard.”February2018.AccessedJune9,2019.https://edlawcenter.org/assets/files/pdfs/publications/Is_School_Funding_Fair_7th_Editi.pdf


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needs,includingstressreduction,adequatesleep,andhealthylevelsofplaytime,downtime,andfamilytime.MBUSDhasbroughtthisissuetotheforefrontinthelargercommunityandisaresourcetomanydistrictsinthisarea.Ineightofthelastnineyears,oneofMBUSD’steacherswasnamedaLosAngelesCountyTeacheroftheYear,andin2012,2013,and2019respectively,MBUSDteachersMichaelHayden,MaggieMabery,andKimHolzwerenamedCaliforniaTeachersoftheYear.Inadditiontooutstandingstudentsandexcellentteachers,MBUSDisextremelyfortunatetohaveahighlevelofparentalinvolvementinitsschoolsandverystrongpartnershipswithcommunitygroupssuchastheManhattanBeachEducationFoundation,PTAsandthePTSA,MBX,theCityofManhattanBeach,Chevron,BeachCitiesHealthDistrict,theManhattanBeachChamberofCommerce,andotherlocalorganizationsandbusinesses.TheselocalpartnershipshavebeenandcontinuetobecriticalinprovidingtheresourcestoallowMBUSDtocontinuetooffertheoutstandingeducationalprogramsthatitmaintainedthroughtherecessionandcontinuestobuilduponasitmovesforward.

Revenue

Enrollment WhiledemographicpatternsthroughoutCaliforniahavegenerallyindicateddecliningenrollment,MBUSDwasfortunatetoseerelativelystableenrollmentthrough2014-15.Thischangedin2015-16,whenenrollmentdeclinedbyover100students,representinga1.4%decline.In2016-17,enrollmentmatched2015-16,butin2017-18and2018-19,enrollmentnumbersreflectedadditionaldeclines,byover125studentsin2017-18andbyjustover100studentsin2018-19.Inboth2015-16and2017-18,thedeclinewaslargelyduetosmallerkindergartenclasses,combinedwithasmallerthananticipatedninthgradeclassin2015-16andsmallerthananticipatedmiddleschoolclassesin2017-18.For2018-19,whilethedistrictenrolledalargerincomingkindergartenclass,thiswasoffsetbythegraduationofalargeseniorclassandbydecreasesinenrollmentfromkindergartentofirstgradeandfromfifthtosixthgrade.Table1:CensusDayEnrollment2013-14toPresent

TK/K 1 2 3 4 5 6 7 8 9 10 11 12 Total 2013-14 495 465 491 492 471 506 547 474 449 654 627 642 581 6894 2014-15 419 455 470 494 496 484 506 567 455 634 657 622 631 6890 2015-16 395 411 464 488 500 502 485 511 559 586 627 646 600 6774 2016-17 442 402 427 480 489 514 491 476 506 707 584 622 634 6776 2017-18 394 430 414 429 474 495 502 469 467 651 698 591 633 6647 2018-19 448 363 426 413 439 473 474 495 466 631 644 684 594 6550 DecliningenrollmentleadstoadecreaseinrevenueprovidedthroughtheLCFF.Inordertoproviderelieffromsharprevenuereductionsresultingfromenrollmentfluctuations,whenadistrict’srevenuedeclines,thestateallowsthedistricttobaseitscurrentyearrevenuesonthehigherofthecurrentortheprioryear’senrollmentnumbers,thereby


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delayingsomeoftheeffectsofadecreaseuntilthefollowingyearandprovidingthedistrictwithtimetoplanandprepareandtodeterminewhetherasingleyear’sdeclineinenrollmentisanomalousorongoing.However,withMBUSD’senrollmentdecliningforthesecondtimeinarow,revenueisimpacted.Inbuildingprojectionsforfutureyears,theDistrictreliesuponavarietyofanalyses,includingademographicsurveyconductedduringtheDistrict’smasterplanningprocess,aregressionanalysis,acohortsurvivalmodel,andaweightedmodelincorporatingboththeregressionanalysisandtheweightedmodel.Incomparingtheseprojectionswithactualenrollmentnumbersoverthepastfouryears,noneprovidesapreciselyaccurateprojection,buttheweightedaveragehasprovidedthefiguresclosesttoactualenrollmentinthreeofthelastfouryears,andthatisthemethodologythattheDistrictiscurrentlyusinginestablishingitsenrollmentprojections.Usingthesenumbers,theDistrictprojectsongoingdecliningenrollmentoverthenextthreeyears.Table2:EnrollmentProjections–WeightedAverage(RegressionAnalysis+CohortSurvival)

TK/K 1 2 3 4 5 6 7 8 9 10 11 12 Total 2019-20 426 422 367 417 419 446 466 470 489 635 629 636 660 6480 2020-21 417 405 362 387 410 456 477 461 448 641 650 644 631 6389 2021-22 418 395 347 371 387 438 475 458 426 637 641 649 637 6279

LCFF Funding – Base Grant Nowenteringitsseventhyearofimplementation,theLocalControlFundingFormula(LCFF)providesaperpupil“base”grant,afigurewhichisaugmentedbyadditionalfundingtoprovide24:1classsizesatgradesK-3andtosupportcollegeandcareersupportatgrades9-12.Districtsreceiveadditionalfundingthrough“supplemental”and“concentration”grantswhosesizeisdeterminedbytheunduplicatedcountofhighneedyouthenrolledintheDistrict.Thetotalofthesethreeamountscreatesa“target”fundinglevel,whichtheStatenotonlyfullyfundedin2018-19(twoyearsaheadofprojections)butalsoenhancedthroughasupplementalCOLAwhichprovidedadditionalongoingLCFFfunding.For2019-20,thestatewillfundtheLCFFatthestatutoryCOLAof3.26%withoutanyenhancement,makingthisthefirstyearofatrue“COLA-only”increasetoLCFFandillustratingforthefirsttimethetruediscrepancybetweenCOLA-onlyLCFFincreasesandstatutoryand“onthenatural”costincreasesforsalary,pensions,healthandwelfareandotherbenefits.ThecurrentbudgetisbaseduponLCFFBaseGrantratesfor2019-20asfollows:Table3:2019-20BaseGrantProjections

Grade Span PY Base Grant (Amount per ADA)

COLA (3.26%)

Augmentation Grant

Base Grant

TK-3 $7,459 $243 $801 $8,503 4-6 $7,571 $247 $-0- $7,818 7-8 $7,796 $254 $-0- $8,050 9-12 $9,034 $295 $243 $9,572


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LCFF Funding – Supplemental and Concentration Grants Inadditiontobasegrantfunding,districtsalsoreceiveSupplementalandConcentrationGrants,whichprovideadditionalper-ADAfundingtosupportthelearningneedsofthedistrict’sEnglishLearner,lowincome,homeless,andfosteryouth(oftenreferredtoasthe“unduplicatedcount,”ortheUPP–theUnduplicatedPupilPercentage).SupplementalGrantsenhancetheper-ADAamountby20%foreachstudentwhoisincludedintheUPP;ConcentrationGrants(onlyprovidedwhenadistrict’sunduplicatedcountisgreaterthan55%)provideanadditional50%inper-ADAfundingforqualifyingdistricts.TheunduplicatedcountinMBUSDhasbeencloseto5%sincetheLCFF’sinception: Table4:MBUSDUnduplicatedPupilPercentagesbyYear

Year UPP 2013-14 4.00% 2014-15 3.50% 2015-16 4.10% 2016-17 4.89% 2017-18 5.66% 2018-19 (est.) 6.64%

Thiscompareswithastatewidecountof63.28%andaLosAngelesCountycountof71.6%andisthelowestunduplicatedcountintheCountyofLosAngelesandthesecondlowestunduplicatedcountforaunifieddistrictinallofCalifornia(behindPiedmontCityUnified,whichwasat2.52%in2017-18).Table5:2017-18LowestStatewideUnduplicatedCountsbyDistrict

Rank County District Type Basic Aid Parcel Tax UPP

15 Santa Clara Loma Prieta Joint Union Elementary Elementary Y Y 7.92% 14 Contra Costa Canyon Elementary Elementary N N 6.94% 13 Marin Larkspur-Corte Madera Elementary N Y 6.72% 12 Los Angeles Hermosa Beach City Elementary Elementary N N 6.54% 11 Marin Reed Union Elementary Elementary Y Y 6.30% 10 Lassen Richmond Elementary Elementary N N 6.13% 9 Contra Costa Moraga Elementary Elementary N Y 5.95% 8 Contra Costa Lafayette Elementary Elementary N Y 5.79% 7 Los Angeles Manhattan Beach Unified Unified N Y 5.66% 6 Santa Clara Los Gatos-Saratoga Joint Union High High School Y Y 5.11% 5 Contra Costa Orinda Union Elementary Elementary N Y 3.66% 4 San Mateo Hillsborough City Elementary Elementary Y Y 3.42% 3 Alameda Piedmont City Unified Unified N Y 2.52% 2 Marin Ross Elementary Elementary Y Y 1.29% 1 Marin Lincoln Elementary Elementary N N 0.00%


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Table6:2017-18SelectedLACountyUnduplicatedCountsbyDistrict(20%orless&/orintheSouthBayRegion)

County Rank District Type Basic Aid Parcel Tax UPP 80 Lennox Elementary N Y* 95.27% 72 Hawthorne Elementary N Y* 90.59% 67 Centinela Valley Union High High School N Y* 88.47% 59 Lawndale Elementary Elementary N Y* 86.17% 58 Inglewood Unified Unified N N 85.98% 24 Wiseburn Unified Unified N Y* 44.29% 19 Torrance Unified Unified N N 39.22% 18 Culver City Unified Unified N Y (2019-20) 38.41% 16 Arcadia Unified Unified N N 34.45% 11 Santa Monica-Malibu Unified Unified N N 28.46% 10 South Pasadena Unified Unified N Y 22.05% 9 Beverly Hills Unified Unified Y N 21.48% 8 Redondo Beach Unified Unified N N 19.86% 7 El Segundo Unified Unified N N 18.45% 6 Las Virgenes Unified Unified N Y 16.74% 5 San Marino Unified Unified N Y 15.82% 4 Palos Verdes Peninsula Unified Unified N Y 14.05% 3 La Canada Unified Unified N Y 9.42% 2 Hermosa Beach City Elementary Elementary N N 6.54% 1 Manhattan Beach Unified Unified N Y (2018-19) 5.66% *thesedistrictstogetherpassedashared“regional”parceltaxwithnosunsetdatein2012.

TheDistrict’sexceptionallylowunduplicatedcountwillprovideaverylimitedsupplementalfundingamountofapproximately$670,432forthe2019-20schoolyear.

Local Revenue – Measure MB InJune2018,ManhattanBeachvoterspassedMeasureMB,alocalfundingmeasurethatwillprovidefundingtotheDistrictintheamountof$225perparceloflandintheCityofManhattanBeach.Thereareapproximately13,091eligibletaxableparcelsoflandintheCity.AlthoughdemographicinformationfromtheManhattanBeachChamberofCommercereflectsthat13.9%ofresidentsofManhattanBeachareseniorcitizensage65orolderwhomightbeeligibleforexemptions,13theactualexemptionrateiscurrently14.4%,representing1,888exemptions.Basedonthisexemptionrate,theDistrictanticipatedreceivingapproximately$2.5millionannuallyinadditionalrevenueforthedistrictforthenextsixyears,through2023-24;todatein2018-19,actualreceiptshavebeen$2,391,921.AstheDistrictclosesits2018-19totalrevenuesfromthissourcewillbeaccountedfor,andtheDistrictwilladjustitsrevenueestimatesforfutureyearsifnecessary.

13ManhattanBeachChamberofCommerce.“Demographics.”2016.AccessedJune13,2018.http://www.manhattanbeachchamber.com/shop/demographics/.


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TheDistrictisutilizingMeasureMBfundstosupportteachingpositionsthatwillallowtheDistricttomaintainmanageableclasssizes,provideprogramsinmath,science,reading,languagearts,socialstudies,art,musicandSTEM(science,technology,engineeringandmath),andpreparestudentsforcollegeandcareers.Thisanticipatedrevenuewillfundapproximately25positions,allowingtheDistricttodelaysignificantexpenditurereductionsoriginallyplannedfor2018-19.However,ongoingincreasestocostswillerodetheDistrict’sdeficitatanacceleratedpaceandwillmeanthattheDistrictwillneedtoimplementincreasingandongoingreductionsbeginningin2019-20,albeitataslowerpacethanwouldhavebeenthecasewithoutManhattanBeachvoters’passageofMeasureMB.

Local Revenue – Manhattan Beach Education Foundation InadditiontoMeasureMB,theDistrictisfortunatetohavetheManhattanBeachEducationFoundation(MBEF)asapartner.MBEFisanindependentfundraisingorganizationthathasprovidedsignificantfundingtotheDistricteachyearsinceitsinceptionin1983tohelptoprovide“smallclasssizes,rigorousacademicsandabreadthofeducationalexperiencesfromkindergartenthroughhighschool.”14Forthepastsixyearsthisfigurehasbeenover$5millionandgrowing,andin2019-20grantstotheschoolswillamountto$6.3million.GrantstotheDistrictfundnumerouspositionsandprograms,providingadditionalstaffingtolowerclasssizesaswellasmusicteachers,elementaryphysicaleducationteachers,librarians,counselors,sciencespecialists,readingspecialists,andavarietyofprofessionaldevelopmentprogramsforteachers.MBEFalsosupportstheDistrict’songoingworkintheareasofsocialinclusionandsocialemotionallearningandisapartnertotheDistrictinidentifyingandaddressingemergingprioritiesandneeds.MBEFhasestablishedanendowmentfundandhasembarkedonacampaigntogrowthisfund,whichheld$18.5millionasofAugust2018,tohold$20millionby2020.ThiswillenableMBEFtoprovideongoingfundingnotdependentsolelyonannualdonations.ItisanticipatedthatifMBEFisabletoachieveitsgoal,theendowmentfundwillproviderevenueof$1millionperyeartosupportDistrictprograms.

Other Revenue Sources Inadditiontorevenuedescribedabove,theDistrictanticipatesreceivingongoinglocalrevenuefromitsSharedUseAgreementwiththeCityofManhattanBeach.Thisagreementhasbeeninplaceforseveralyears,withaone-yearamendmentincludinganincreaseof$200,000inrevenueputinplacein2017-18andasix-yearamendmentincludinganadjustmenttothemaximumCPIincreaseontheannualrevenuefrom$15,000to$25,000.For2019-20,theDistrictanticipatesreceivingapproximately$775,000throughthisagreement.Inaddition,MBUSDwillcontinuetoparticipateintheMandateBlockGrantprogram,whichprovidesaper-ADAallocationtooffsetthecostsofstate-mandatedrequirementsimposedondistrictsandisanticipatedtogeneratejustunder$280,000fortheDistrict.

14ManhattanBeachEducationFoundation.“HistoryandMission.”2018.AccessedJune13,2018.https://mbef.org/about/history/.


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Importantly,forthefirsttimeinseveralyears,thestateisnotprovidingadditionalone-timefundingtodistricts.Lastyear,thisfundingsourceprovidedapproximately$1.2milliontotheDistrict,andwhiletheDistrictdidnotanticipatethisasanongoingrevenuesource,thelossofthisrevenuewillenhanceconcernsrelatedtodeficitspending.TheDistrictanticipatestotalrevenueintheamountof$82,017,677.TheDistrict’slargestsourceofrevenuecontinuestobefromthestatethroughtheLCFF,withthesecondlargestsourcebeinglocalrevenue,whichincludesfundingfromMeasureMB,MBEF,andtheDistrict’s“Fund06”organizations.Theseorganizations,whichincludePTA’sandboosterorganizations,providesignificantdonationstoDistrictschools.Becausethesedonationsaregenerallytargeted(restricted)one-timedonations,theassociatedrevenue(andexpense)isnotincludedintheDistrict’sadoptedbudget,butoverthecourseoftheyear,theDistricttypicallyreportssignificantgrowthinbothrevenueandexpenseduetothissupport.Theserevenuesrepresentnearly$1.8millioninincreasedLCFFfundingduetotheanticipated3.26%COLA,whichisslightlyoffsetduetotheDistrict’spatternofdecliningenrollment.WhileFederalRevenueremainsstableascomparedwith2018-19,OtherStateRevenueislowerby$1.4million;thisisprimarilyduetotheeliminationofthestate’sone-timeunrestrictedfundingnotedabove.

Expenditures TheDistrictanticipatestotalexpendituresintheamountof$85,789,536.Thelargestcategoryofexpenseisforpersonnelcosts,withcertificatedandclassifiedsalaryandbenefitscomprising85%ofprojectedexpenses.Thesecostscontinuetoincreasebothduetonegotiatedsalaryincreasesandduetosignificantincreasesinassociatedbenefitscosts.Inparticular,between2018-19and2019-20,thefollowingchangeshaveoccurred:

• A2.5%negotiatedsalaryincrease• 1.3%in“stepandcolumn”salarychanges,asemployeesgainexperienceand

education

LCFFRevenue$56,554,190

69%FederalRevenue$2,090,521

3%

OtherStateRevenue$8,434,97210%

LocalRevenue$14,816,645

18%

Figure3:2018-19RevenueSources


June 19, 2019 Page | 12

• A.42%increaseinSTRScosts,anda2.671%increaseinPERScosts.Thesespecificpercentageincreasesareexpectedtochangewhenthedetailsoftheenactedbudgetbecomeclear,asthelegislatureandtheGovernorhaveagreedtoshiftsomefundingcurrentlytargetedtoSTRSreliefintoprovidingPERSrelief.

• A5.29%increaseinHealthandWelfarebenefitscosts

Tooffsettheseincreases,theDistricthasbeguntoimplementexpenditurereductions;whilethesereductionswillnotcompletelymitigatetheimpactofnegotiatedandstatutorypersonnelcostincreasescombinedwithrelativelyflatfundingontherevenueside,theydohavesomeimpact:

• Thedistrict’sprofessionaldevelopmentbudgetisreducedbynearly$260,000

• Thedistrict’sinstructionalmaterialsbudgetisreducedby$400,000• Thedistrict’stechnologybudgetisreducedbyjustover$400,000(reducingthe

technologyreplacementbudgetbyover$315,000andongoingservicesbynearly$100,000)

• Thedistrict’slegalservicesbudgetisreducedbyalmost$135,000• Thedistrict’sovertimebudgetisreducedbynearly$120,000• Thedistrict’sbudgetsforotherdepartmentsisreducedbyapproximately$75,000

Currentexpenditureprojectionsresultinaprojecteddeficitof$3,771,859.ThiswillbringtheDistrict’sendingfundbalanceto$3,249,976,ofwhichonly$676,270willbeundesignated.TheimplicationsofthisendingpositionwillbediscussedfurtherinrelationtotheDistrict’sMultiYearProjections.

Cash Flow DistrictsreceivetheirLCFFfundingthroughacombinationofstatefundingandlocalpropertytaxdollars.Statefundingisapportionedonwhatiscalleda5-5-9schedule,sothatdistrictsreceive5%oftheirfundinginJuly,5%inAugust,and9%ineachmonththereafter.ForMBUSD,statefundingundertheLCFFamountsto$13,976,557,apportionedtothedistrictonthe5-5-9schedule($698,828inthefirsttwomonthsand$1,257,890ineachmonththereafter).Inaddition,theDistrictreceives$1,282,118infundsfromthetemporaryincometaxincreaseauthorizedbyvotersthroughProposition55via

CertificatedSalary

$36,220,47442%

ClassifiedSalary

$15,108,41418%

Benefits$21,643,604

25%

Supplies$1,654,482

2%

Services$10,686,172

12%

CapitalOutlay$82,4420%

OtherOutgo/Indirect$393,9481%

Figure4:BudgetedExpendituresbyCategory


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theEducationProtectionAccount;thesefundswillbeusedtopayforclassroomteachers’salariesandbenefitsasauthorizedbyBoardresolution2019-18,scheduledtobeapprovedonJune19,2019,andaredistributedquarterlyratherthanaccordingtothe5-5-9schedule.TheremainderofLCFFrevenue($41,295,515forMBUSD)comestotheDistrictintheformofpropertytaxrevenue.Thisrevenueisdisbursedtodistrictsatdifferenttimesoftheyearbasedonstatutorytimelinesandformulas;asonemightexpect,thelargestdisbursementsgenerallyoccurinDecemberandApril,anddisbursementsaresmallintheothermonths.Asaresultofthestatefundingandtaxdisbursementschedules,itisnotuncommonforrevenuetobeinsufficienttocovercostsduringthemonthsleadinguptoDecemberandApril.Districtsthatdonothavesufficientreservesoftenengageinshort-termborrowing,eitherbyborrowingfromotherfundsheldbytheDistrictor,ifsuchfundingsourcesareinsufficient,byparticipatinginaCountyborrowingpool.Suchborrowingrequiresthatfundsberepaid(withinterest)withinthefiscalyearduringwhichtheywereborrowed.WhileMBUSDwashistoricallyabletomeetcashflowneedsbyborrowingfromwithinotherfundsduringpreviousyears,itbecamenecessarytobeginparticipatingintheCountyborrowingpoolin2017-18.Thisneedcontinuesin2019-20.OnJune19,2019,theBoardisscheduledtoauthorizeinter-fundborrowingviaBoardResolution2019-19aswellastheissuanceofTaxRevenueAnticipationNotes(TRANs)intheamountof$13millionviaBoardResolution2019-17(upfrom$6millionin2018-19and$7.5millionin2017-18).AstheDistrict’sreservelevelcontinuestodecline,itisanticipatedthatsuchborrowingwillcontinuetobeneededfortheforeseeablefuture.Costsassociatedwiththistransactionarelargelymitigatedviaanissuancepremiumandinterestearned,sothisshort-termborrowingstructurecomeswithminimalnegativebudgetaryimpacttotheDistrict.


June 19, 2019 Page | 14

Multi-Year Projection TheDistrict’sMulti-YearprojectionislargelybuiltbasedonassumptionsprovidedbytheLosAngelesCountyOfficeofEducation:

Utilizingtheseassumptionsandtheinformationincludedabove,thedistricthasdevelopedanupdatedmulti-yearprojectionforthecurrentandsubsequenttwofiscalyears.ThisprojectionindicatesthatwhileMBUSDwillendtheyearwithahealthyreserve,ongoingdeficitspending,escalatingmandatorycosts,andlimitedrevenueincreaseswillresultindiminishingendingfundbalances.TheDistrictwillneedtoenactsignificantbudgetaryreductionsinfutureyears,andevenwithsuchreductionswillneedtoreduceitsReserveforEconomicUncertainties(REU)to3%in2019-20.Whiletheseprojectionscouldchangebasedonactualreceiptofrevenuesandactualexpenditures,theprojecteddecreasestotheendingfundbalancearepartofanongoingtrend,andwhilethedepletionofreservesmaybeprolongedovermoreyearsthancurrentprojectionsindicate,significantexpenditurereductionswillbeneededintheforeseeablefuture.ThedecliningsizeoftheDistrict’sendingfundbalance,itsREU,anditsundesignatedamountcanbeseeninthefollowingtable:


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Table7:Surplus/DeficitsandReserveamountsasaPercentageofExpenditures

Year Excess (Deficiency) Ending Balance as a % of Expenditures

REU Undesignated Amount

2011-12 ($1,078,135) 27.42% 5% 22.00% 2012-13 ($2,956,203) 22.62% 5% 15.47% 2013-14 $1,127,733 24.98% 5% 17.40% 2014-15 ($1,402,406) 19.75% 5% 11.69% 2015-16 $79,097 18.13% 5% 10.44% 2016-17 ($75,426) 18.16% 5% 9.63% 2017-18 ($2,300,560) 14.48% 5% 5.92% 2018-19 ($3,658,389)* 8.53%* 5%* 0.88%* 2019-20 ($3,771,859)* 4.34%* 3%* 0.79%* 2020-21 ($894,761)* 3.37%* 3%* 0.34%* 2021-22 $122,833* 3.53%* 3%* 0.49%*

*projectedatbudgetadoption/estimatedactualsImportantly,areviewoftheDistrict’sbudgetaryhistoryreflectssignificantchangesintheamountofdeficiencybetweenbudgetadoptionandunauditedactuals.Thechangehasbeenconsistentlypositive,averagingapproximately$2.5millionoverthepastfiveyears.Table8:ChangestoBudgetExcess/(Deficiency)fromAdoptiontoUnauditedActuals

Adopted Budget Unaudited Actuals Total Change 2011-12 ($2,176,236) ($1,078,135) $1,098,101 2012-13 ($5,682,446) ($2,956,204) $2,726,242 2013-14 ($2,977,006) $1,127,733.00 $4,104,739 2014-15 ($3,211,807) ($1,402,406) $1,809,401 2015-16 ($683,646) $79,099.47 $762,745 2016-17 ($3,339,507) ($75,426) $3,264,081 2017-18 ($3,303,012) ($2,300,560) $1,002,452 2018-19 ($145,480) ($3,658,389)* ($3,512,909)*

*year-to-dateprojected“swing”atestimatedactualsThesechangesinprojectionshavestemmedfromavarietyofsources,includingunanticipatedrevenuefromvarioussources,aswellasreductionsinexpenditures.TheyarenotpredictableandthereforecannotbeincorporatedintotheDistrict’smulti-yearprojections.However,ongoingpositiveswingswouldlengthentheperiodduringwhichreservefundingwouldallowtheDistricttoslowplannedreductions.Barringsignificantincreasestorevenue,increasestoexpenditureswillcontinuetoexceedincreasestorevenue,andasexistingreservesaredepleteditwillbenecessarynotonlytoeliminatealldeficitspendingbuttoreduceexpendituresevenfurtherinordertomaintainabalancedbudgetandapositivethree-yearoutlookinyearsbeyondthecurrentprojection.Asinthepast,MBUSDcontinuestorelyuponLACOE’sguidanceindevelopingbudgetprojections.Currentlyprojectedrevenueincreasesarequitemodest,especiallywhen


June 19, 2019 Page | 16

comparedwithprojectedmandatorycostincreases.Thereareanumberofstatutorybenefitspaidforcertificatedandclassifiedemployees(STRS/PERS,Medicare,UnemploymentInsurance,Workers’CompensationInsurance,and,forclassifiedemployees,SocialSecurityInsurance),andwhilemanyofthesecostshaveremainedconsistent,pensioncostincreaseshavehadasignificantimpact.Overthenextseveralyears,thelargestfactorinfluencingchangesintheserateswillbeincreasestoemployercontributionratesforCalSTRSandCalPERS.Astheseretirementsystemsworktoaddresstheirliabilitiesandensurethattheywillremainfiscallysolventandfullyfunded,coststoemployerswillcontinuetoincreaseatrelativelysteeprates.Furthermore,recentinvestmentearningshavepromptedbothCalSTRSandCalPERStoexaminetheiractuarialassumptions,withCalPERStakingdefiniteactiontoincreaseitsprojectedemployercontributionrates,andCalSTRSlikelytodosototheextentcurrentlypermittedbylaw.ThefollowingtabledescribesbothCalPERSandCalSTRSprojectedrateincreases,thoughitisimportanttonotethatprojectedratesforfutureyearscanfluctuateandhavechangedbyasmuchasafullpercentagepointoverthelastfewyears.Table9:RetirementSystemEmployerContributionRates

CalPERS Actuals/ Current Projection CalSTRS Actuals/ Legislative Limit 2014-15 11.771% 8.880% 2015-16 11.847% 10.730% 2016-17 13.888% 12.580% 2017-18 15.532% 14.430% 2018-19 18.062% 16.280% 2019-20 20.733%* 16.700%* 2020-21 23.600%* 18.100%* 2021-22 24.900%* 17.800%* 2022-23 25.700%* 17.800%* 2023-24 26.400%* 17.800%* 2024-25 26.600%* 17.800%* 2025-26 26.500%* 17.800%* *rateswillchangeasaresultofthe2019-20statebudget;detailshavenotyetbeenreleased.

Theserateincreasescomeaftermorethan30yearsoflowercontributions.ThelasttimethatCalPERSrateswereabove11%wasin1986-87;thehighestratesince1979-80wasin1980-81whenratespeakedat13.119%.15Therehasbeennoseparatefundingsourcetoassistdistrictsinsupportingtheseincreasingrates,andthereforeallrateincreasesforSTRSandPERShavebeenpaidoutofongoingrevenuesources.For2019-20,therateslistedaboveincludearevenueinvestmentproposedbyGovernorNewsominhisMayRevision;thisinvestmentwasintendedtooffsetemployercontributionratestoSTRSby1.43%in2019-20,1%in2020-21,and0.5%ineachyearthereafter.ThebudgetcompromisereachedbetweentheGovernorandtheLegislatureleadinguptotheenactmentofthestatebudgetismodifiedfromtheMayRevisionproposal,reducingthe

15EmployerContributionRateHistory.(30June2014.)CalPERSSchoolsPoolActuarialValuation–June30,2014.Retrievedfromhttps://www.calpers.ca.gov/docs/rate-history-schools-2014.pdf.


June 19, 2019 Page | 17

investmentinSTRSandmovingsomeoftheinvestmenttoPERS.ThiswillresultinincreasedSTRSratesanddecreasedPERSrates;thebudgetaryimpactwillneedtobeanalyzedwhenmorespecificinformationbecomesavailable.Asdescribedpreviously,theDistrictfacesadditionalcostincreases“onthenatural:”

• TheDistrictprojectsannual“stepandcolumn”salaryadvancementforemployeesatapproximately1.3%,alongwithassociatedincreasestostatutorybenefitscosts.

• Foryearsbeyondthecurrentyear,theDistrictanticipatesannualincreasestoHealthandWelfarebenefitcostsatarateof7.8%.;thisincreaseisbasedontheaveragerateincreaseexperiencedbytheDistrictoverthepastfiveyears.

• TheDistrictcananticipateongoingsignificantincreasestoSpecialEducationcosts,whichhavegrownatanaveragerateof7.74%overthepastfiveyears.

• TheDistrictcananticipateincreasestothecostsofothergoodsandserviceswithCPIgrowthprojectedatbetween3.05%and3.16%overthenextthreeyears.

WhiletheseincreasesareoffsettosomedegreeduetodecreasingstaffingneedsasenrollmentdeclinesandastheDistrictadjustsstaffinglevelsaccordingly,naturalattritionwillnotkeeppacewiththeincreasingcoststhatarebeingimposedontheDistrict.Anotherfactortoconsiderisnegotiatedsalaryincreases.Whilesuchincreasesarenotlegislativelymandated,theyaresubjecttocollectivebargaining,anditisimportanttorecognizethatwiththehighcostoflivinginCalifornia,andintheSouthBayinparticular,retainingemployeesrequiresaninvestmenttoensurethatsalariesarecompetitiveandallowemployeestoliveincircumstancesthatareconducivetoworkinginManhattanBeach.TheDistricthasworkedtodothisandhasprovidedmoderatesalaryincreases:Table10:NegotiatedSalaryIncreases

Statutory COLA Salary Increase 2017-18 1.56% 1.0% 2018-19 2.71%* 1.5% 2019-20 3.26% 2.5% *For2018-19,thestatelegislatureaugmentedthisCOLAandapplieda3.7%COLAtoLCFFfunding.

Forthecurrentandtwopreviousyears,theseincreaseshaverepresentedjustunder$3.4millioninincreasedsalarycosts.WhiletheseincreaseshaveservedtokeepMBUSD’scompensationaboveaveragecomparedwithdistrictsintheregion,totalcompensationforDistrictemployeesisnotthehighestinthearea.ItisademonstrationofthefiscalconstraintsfacedbyalldistrictsinthestatethatevenwithonlymodestsalaryincreasestheDistrictfaceschallengesthatmayrequireittoreduceprograminordertosustainthesecostoflivingadjustments.Inexaminingthesecostpressures,itbecomesclearthatevenaccountingonlyforincreasedpension,salaryandstatutorybenefits,andhealthandwelfarecosts,theseincreasedcostsalonewilloutpaceanyprojectedLCFFrevenueincreasesinthecomingyears.Addingin


June 19, 2019 Page | 18

negotiatedsalaryincreasesandthevariableofspecialeducationcostincreaseswidensthegap.Usingtheassumptionsdescribedabove(andacknowledgingthevariabilityofspecialeducationcontributiongrowthandyearsforwhichsalaryhasnotyetbeennegotiated),thedifferencebetweencurrentlyprojectedincreasestoLCFFrevenueandincreasedexpenses(keepingallcurrentstaffingandspendinglevelsconstant)isasfollows:

Whiletheseprojectionsaretheoreticalinnature,astheydonotincorporatechangestoplannedexpenditures,theyprovideageneralsenseoffutureDistrictbudgets.Asstatedearlier,the2018-19budgetnotonlyfilledtheremaininggapbetweenexistingandtargetfundinglevelsbutalsoprovidedanaugmentedCOLA,meaningthatnewrevenuewas,inthatyearandforthelasttime,significantlyenhancedbythestate’sinvestmentinfillingtheLCFF“gap.”AsthestatemovesintoaCOLA-onlyscenarioforrevenueincreases,thediscrepancybetweenincreasedrevenueandincreasedcostsdramaticallyincreases.Thus,eveniftheDistrictdidnothaveacurrentdeficit,thestructureoftheLCFFandthelegislatedcostincreasesonthehorizonwouldcreateandenlargeadeficitoverthenextseveralyears.Itisalsoimportanttorememberthatprojectionsdonotcurrentlyanticipatetheveryrealpossibilityofaneconomicdownturn.NotwithstandingtheDistrict’shistoricalpositivetrendsbetweenbudgetadoptionandyear-endclosing,thisstructuralissuewillneedtobeaddressedinordertoallowtheDistricttoremainfiscallysolventinfutureyears.Furthermore,theabovescenariosdonottakeintoaccountotherneeds,suchastheneedtoaddressloomingfacilitiesmaintenanceneeds.While,likemanyformercategoricalprograms,theDeferredMaintenanceprogramhasbeenincorporatedintotheLCFF,LACOEhaspreviouslyprovidedthefollowingguidance:

DeferredMaintenancenolongerexistsasaseparateprogramandisnowapermanentpartoftheLCFFbasegrant.However,districtsarestillrequiredtoappropriatelymaintaintheir

Figure5:LCFFGrowthv.CostIncreasesperADA


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facilities.TheresponsibilityformaintainingdistrictfacilitiesisoneoftheeightStateprioritiesandshouldbeincludedinthedistrict’sLCAP.Inaddition,theWilliamsActfacilityrequirementswillcontinue.Werecommendthatdistrictssetasidefundsinaseparateresourcefordeferredmaintenancethatisnotavailableforothergeneralfundpurposes.

WithregardstoRoutineRestrictedMaintenance,LACOEhasinformedprovidedthisguidance:

Schooldistrictsarerequiredtodeposit3percentoftotalGeneralFundexpendituresbeginningintheFY2019-20,whichistriggeredbyE.C.17070.75(b)(2)(F)duetothefullimplementationoftheLCFF.

ThiswillresultinanadoptedDistrictbudgetof$3,211,343formaintenance,ofwhich$2,574,002(3%ofexpenditures)isdesignatedasRoutineRestrictedMaintenance.However,theDistrict’sexperienceswithindoorairqualityissueslastyearhighlightedthatthisallocationisnotnecessarilysufficienttomeettheDistrict’songoingfacilitiesmaintenanceneeds.Lastyear’schallengesledtoanunanticipated,thoughonetime,impacttothebudgetofapproximately$1.3million.Whilethesecostswillhopefullynotrecur,theydidreducetheDistrict’savailablereserve.Additionally,inresponsetotheclearneedsdemonstratedbylastyear’sairqualityconcerns,theDistricthasaddedtwomaintenanceandonemanagementpositions.Thiswillbegintoaddressthechallengescreatedbysignificantreductionstothemaintenanceprogramoverthelast10yearsbutwillalsocreateongoingincreasedcosts.And,evenwiththisinvestment,theDistricthasnotcomeclosetorestoringthe12(now10)positionsthatwouldbringittorecommendedstaffinglevels,orrestorepreviouslyavailablefundsforpreventative,routine,anddeferredmaintenance.TheDistrict’s2015FacilitiesMasterPlanidentifiedcloseto$50Minmaintenanceneeds,includingbetween$20Mand$25Minimmediateorshort-termneeds.Sincethattime,theDistricthaspassedtwobondmeasures,andmuchoftherevenuefromthebondsaleswillbeutilizedtoaddresstheidentifiedfacilitiesneeds.However,thedesignprocessisstillongoingandconstructionisplannedoverthenextfewyears,andintheinterimtheDistrictwillcontinuetoaddressimmediateandurgentmaintenanceissuesastheyarisethroughanyavailableresources.Therearesomefactorsthatprovidesomefavorableassumptions.In2020-21,itisanticipatedthatSTRSemployercontributionrateincreaseswillleveloff,atleastgivencurrentactuarialprojections,sothecostincreaseswillnotbeaslarge,thoughtherewillnotbeassociatedcostdecreases.Inaddition,2020-21willbethelastyearinwhichtheDistrictwillbeobligatedtopayretireeannuityinvestmentcostsrelatedtoaretirementincentiveprovidedinthespringof2016,reducingexpendituresbyjustover$250,000peryear.Thedistricthasdevelopedamulti-yearprojectionforthecurrentandsubsequenttwofiscalyears.Thisprojectionindicatesthatwhilethedistrictwillendtheyearwithasignificantreserve,ongoingdeficitspendingwillresultindiminishingendingfundbalancesandthedistrictwillgofromapproximately8.5%ininitsreserveandunassignedbalancesinthecurrentyearto3%in2021-22,evenwithsignificantreductionsinthecomingyears.


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Table11:Multi-YearProjection

2018-19 Estimated

Actuals Preliminary

2019-20 Budget Projected

2020-21 Budget Projected

2021-22 Budget Revenues Revenue (LCFF) $54,782,295 $56,554,190 $57,369,811 $58,180,355 Federal Revenue $2,100,883 $2,090,521 $2,090,521 $2,090,521 Other State $9,828,205 $ 8,556,321 $8,564,602 $8,572,614 Local $17,499,500 $14,816,645 $14,816,645 $14,816,645

TOTAL REVENUES $84,210,883 $82,017,677 $82,841,579 $83,660,135 Expenditures Certificated Salaries $35,267,437 $36,220,474 $33,189,938 $32,040,594 Classified Salaries $13,791,503 $15,108,414 $15,304,823 $15,503,785 Employee Benefits $20,457,774 $21,643,604 $22,356,839 $22,977,583 Books & Supplies $2,932,116 $1,654,482 $1,668,512 $1,689,406 Services/Other Operating Expenses $14,261,159 $10,686,172 $10,739,839 $10,849,544 Capital Outlay $765,335 $82,442 $82,442 $82,442 Other Outgo $495,948 $495,948 $495,948 $495,948 Indirect ($102,000) ($102,000) ($102,000) ($102,000)

TOTAL EXPENSES $87,869,272 $85,789,536 $83,736,340 83,537,302

Net Increase/ (decrease)

($3,658,389) ($3,771,859) ($894,761) $122,833 Fund Balance (Reserves) Beginning fund balance $11,149,419 $7,491,030 $3,719,171 $2,824,410 Ending Fund Balance $7,491,030 $3,719,171 $2,824,410 $2,947,242 Non-Spendable

Revolving Cash ($10,000) ($10,000) ($10,000) ($10,000) Stores ($20,000) ($20,000) ($20,000) ($20,000)

Restricted Ending Balance ($380,695) ($439,195) Assigned/Designated

3-year Escrow $1,912,418 Supplemental Grant

REU (5%) $4,393,464 REU (3%) $2,573,686 $2,512,090 $2,506,119

UNDESIGNATED ENDING BALANCE $774,453 $676,290 $282,319 $411,123

Ending Fund Balance Theendingfundbalanceandmulti-yearprojectionsreflectedintheAdoptedBudgetReportreflectongoingdeficitsof$3.7millionin2018-19and2019-20,followedby$900thousandin2020-21,withasmallsurplusofjustunder$125thousandin2021-22,evenwithsignificantexpenditurereductions.ThiswillleadtoaneedtoreducetheDistrict’s


June 19, 2019 Page | 21

ReserveforEconomicUncertainties(REU)fromtheBoard-directed5%tothestatutoryminimumof3%ofexpendituresin2019-20.Thedistrictcananticipateending2021-22withlessthan$500,000inundesignatedfunds.Figure6:ComponentsoftheEndingBalance

Itshouldbenotedthatintheadoptedbudget,theDistrictiseliminatingthe“3-YearEscrow”whichhasbeenheldintheDistrict’sreservessincetheinceptionofthecurrentSharedUseAgreementwiththeCityofManhattanBeach.ThesefundshavebeenheldinreservebecausethatagreementspecifiesthattheDistrictmustbepreparedtoreimbursetheCityforpaymentsmadeundertheagreementinthemostrecentthreeyearsintheeventofacourtfindingrequiringit.EliminatingthesefundsfromthereservemeansthattheDistrictwillneedtofindothermeanstoprovidethisreimbursementifnecessary.Thesediminishingreserveamountscreatevulnerability,particularlyshouldarecessiondevelop,leadingtosomeofthemorenegativepotentialintheLAO’sprojectionsnotedearlier.LACOEhaspreviouslyofferedguidanceonthistopic:

Theexperienceofthemostrecentrecessionhasclearlydemonstratedtheseminimumlevelsarenotsufficienttoprotecteducationalprogramsfromseveredisruptioninaneconomicdownturn.Thetypical3.0percentreserveminimumrepresentslessthantwoweeksofpayrollformanydistricts.ManyLEAshaveestablishedreservepoliciescallingforhigherthanminimumreserves,recognizingtheirdutytomaintainfiscalsolvency.

$-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

$10,000,000

$11,000,000

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

3-YearEscrow

SupplementalGrantAssignmentREU(5%)

REU(3%)

UndesignatedAmount


June 19, 2019 Page | 22

TheadequacyofareservelevelshouldbeassessedbasedontheLEA’sownspecificcircumstances.16

ThecurrentendingfundbalancereflectedintheDistrict’smulti-yearprojectiondoesnotallowMBUSDtomaintainitscurrentgoalofa5%reservebeyond2018-19,nordoesitsustainsubstantialunassignedfundinginthesubsequentyears.Ongoingcostpressureswillmeanongoingdeficitspending,whichwillrequiretheDistricttoplanforreductions,beginningin2019-20andcontinuinginsubsequentyears;planningforsuchreductionsshouldbeincorporatedintocurrentbudgetplanningdiscussions.

Ongoing Concerns and Priorities Asaresultofthecommunity’spassageofMeasureMB,theDistrictwasabletodescribeapositivebudgetfor2018-19.However,thisfundingcannotoffsetthegapbywhichincreasestorevenueoutpacestatutoryandnegotiatedincreasestoexpenditures.Theadoptedbudgetdescribedthecurrentandsubsequenttwofiscalyearsdescribesapositivefiscaloutlook,butthisisachievedonlythroughsubstantialexpenditurereductions.Currentlythebudgetcontemplatesthesereductionsasreductionsinpersonnelpositions,buttheDistrictwillbeexploringallareasasitdevelopsandarticulatesitsplansfor2020-21andbeyond.Inadditiontomakingthesereductions,theDistrictwillneedtoaddressanumberofimpendingfundingandexpenditurechallengesoverthecomingyears:

• Despiteabudgetthatreflectsasmallsurplusin2021-22,thisbalancedbudgetwillnotbemaintainedinfutureyearswithoutfurtherexpenditurereductions,ascostincreasesarelikelytocontinuetooutpaceLCFFgrowth.Thisdiscrepancyislikelytobelessenedaspensioncostsstabilize,butitwillnotbeeliminatedasincreasesinareassuchasspecialeducationandhealthbenefitswillcontinuetobesignificant.

• Diminishingavailablereserves• DiminishingincreasestostatefundingprovidedtodistrictsthroughtheLCFF• OngoingincreasestotheDistrict’scontributiontobenefitsforSTRSandPERS

through2020-21forSTRSandthrough2023-24forPERS• Ongoingincreasestootherexpenditureareas,includinghealthandwelfarebenefits

andspecialeducationprograms• Ongoingneedtoaddressdeferredandincreasinglyurgentfacilitiesmaintenance

needsuntilcampusmodernizationprojectscanbecompleted• Theimpactofnegotiatedsettlementswiththedistrict’sbargainingunits(a

contingentsalaryincreasehasbeennegotiatedfor2020-21,andnegotiationshavenotyetbegunfor2021-22andbeyond)

• Ongoingneedfortextbookandinstructionalmaterialsinvestment• Ongoingneedforfurtherhumancapitalinvestmentinmaintenanceandoperations

assystemsareupgradedandasaresultofsignificantpersonnelreductionsandfacilitiesmodernization

16CandiClarkandKeithCrafton“2017-18FirstInterimFinancialReporting”3November2017.Web.3December2017.http://www.lacoe.edu/Portals/0/zBulletins/4700.pdf.


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• Ongoingandincreasingneedsforthereplacementandupgradeoftechnologyinfrastructureandhardware

Inaddition,asnotedpreviously,COLA-onlyLCFFincreases,compoundedbyongoingdecliningenrollmentwillresultinongoingchallengesandneedforfurtherexpenditurereductions.Whilethereissignificantuncertaintyinprojectionsforfutureyears,andwhiletheyearsbeyondthenexttwoareevenmoreuncertain,preliminaryanalysisrevealsaneedforongoingreductions.Inordertomaintainapositivecertification,theDistrictwillneedtocontinuetoprojectadditionalexpenditurereductionsin2021-22andbeyond.Withoutsuchreductions,theDistrictcananticipatequalifiedornegativebudgetsinthefuture;MultiYearProjectionwouldappearasfollows:Table12:FourYearMulti-YearProjection

2018-19 2019-20 2020-21 2021-22 2022-23 Beginning Balance $11,149,419 $7,491,030 $3,719,171 $2,824,410 $2,947,242 Revenue $84,210,883 $82,017,677 $82,841,579 $83,660,135 $84,640,365 Expense ($87,869,272) ($85,789,536) ($83,736,340) ($83,537,302) ($85,835,228) Ending Balance $7,491,030 $3,719,171 $2,824,410 $2,947,242 $1,752,379 Undesignated Amt $774,453 $676,290 $282,319 $411,123 ($852,677)

Bond Funds: Measures C and EE OnNovember8,2016,votersapprovedMeasureEE,a$39millionbondmeasurewhichwillprovidefundingtoreplacetheoutdatedandundersizedgymnasiumatMiraCostaHighSchool,andMeasureC,a$114millionbondmeasurewhichwillbeusedtorepairandrenovatedeterioratingroofs,plumbing,electrical,andventilationsystemsinagingfacilities,replaceorupdateolderclassrooms,includingtemporaryportablebuildings,makeimprovementsforearthquakesafety,improveheatingandinstallairconditioning,improvestudentsafety,security,lighting,fencing,andcommunicationsystems,andprovidefacilitiesandequipmentneededtosupporthighqualityinstructioninmath,reading,science,thearts,andtechnology.Sincethatelection,theDistricthasmovedforwardinimplementingprojectsrelatedtobothbondmeasures.TheBoardhasappointedBondOversightCommitteesforeachmeasureandhasidentifiedGenslerasthearchitectfortheMiraCostaAthleticsComplexandDLRasthearchitectforallMeasureCprojects.BalfourBeattywillserveastheleaseleasebackcontractorforallprojectsforbothMeasuresCandEE.InFebruaryandMarchof2018,theDistrictworkedtoupdateitscreditratingsandwaspleasedwhenMoody’smaintaineditsAa1ratingandStandard&PoormaintaineditsAAratingwithastableoutlookforMBUSDbonds.Inprovidingtheseratings,Moody’snotedtheDistrict’s“largeanddiversetaxbase,strongwealthindicatorsandhealthyfinancialpositionsupportedbystrongreserveandcashlevels.Theratingalsoincorporatesthedistrict'slowdebtandOPEBburdensaswellasitsmoderatepensionburden.”Similarly,Standard&Poor’scommentedpositivelyon“thedistrict'sverystrongandstablelocaleconomy,whichwebelievemoderatestheriskofmajorlocaleconomicfluctuations....


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[and]ourviewofthedistrict'sstrongfinancialprofile,withademonstratedcommitmentbymanagementandtheboardtomaintainingverystrongavailablereserves,whileseekingadditionalandsustainablerevenueflexibility.”BothfirmsindicatedthatfutureratingswouldbeinfluencedbychangestotheDistrict’sreserves.OnMay9,2018,theDistrict’sbondsaleclosed,andtheDistrictreceived$89,168,337.10fortheManhattanBeachUSD2016ElectionGeneralObligationBonds,2018SeriesA(MeasureCandEE).ThesefundsareheldintheDistrict’sBuildingFund(Fund21),andprojectionsforthesefundsareasfollows:Table13:MeasureCandMeasureEEBondFundRevenueandExpense

Initial Bond

Issuance Prior Years’

Expenditures Beginning Balance Revenues Expenditures

(Deficit)/ Increase

Ending Fund

Balance

Measure C $41,844,047 $14,686,660 $27,790,643 $500,000 $26,978,384 ($26,478,384) $1,312,259

Measure EE $38,847,473 $9,333,984 $30,100,418 $500,000 $29,938,255 ($28,938,255) $1,162,163

*includesprojectedinterest(actualinterestallocationperbondwilldependonrateofspend)Thebudgetedexpendituresanticipateallcontemplatedprojects;howeveritislikelythattheremaybesomechanges,particularlyrelatedtoMeasureCexpendituresasprojectscopes,budgets,phasingandtimelinesbecomecleareroverthecourseofthecomingyear.Atthistime,theDistrictisinconstructionofthenewgymnasiumbuilding.TheDistrict’sArchitect,Gensler,receivedapprovalfromDivisionoftheStateArchitectontheplanstheysubmitted.TheDistrict’scontractorBalfourBeattyConstructionbegandemolitioninDecember2018andconstructioninFebruary2019,andthenewfacilityisexpectedtoopenforthefallsportsseasonin2020-21.SomecomponentsoftheDistrict’sMeasureCplans,specificallysecurityfencingatfourschoolsites,werepartiallyfundedbytheCityofManhattanBeachandcompletedduringthe2018-19schoolyear.Thissummer,theDistrictwillcompletemodernizationatPacificElementaryaswellasDistrict-wideroofingandHVACatportionsofMiraCostaHighSchool.ThearchitecturalfirmDLRisintheprocessofdevelopingdesignsforallotherMeasureCprojectsandisworkingwiththeDistrict’scontractorBalfourBeattytodeterminethemosteffectivephasingplantohelptheDistricttocompletetheremainingprojectsefficientlyandeconomically,hopingtominimizeinterimhousingcosts.


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Other Funds InadditiontotheGeneralFund,theDistrictreceivesrevenuesandmakesexpendituresinanumberofotherfunds.Basedoncurrentprojections,allfundscontinuetoreflectapositivebalance:

Beginning Balance Revenues Expenditures

(Deficit)/ Increase

Ending Fund Balance

Cafeteria Fund (Fund 13) $1,068,108 $1,816,700 $2,623,774 ($807,074) $261,034 Building Fund (Fund 21) $57,891,062 $1,000,000 $56,476,639 ($55,416,639) $2,474,423 Capital Facilities Fund (Fund 25) $4,400,602 $650,000 $19,500 $630,500 $5,031,402 Capital Projects Fund (Fund 40) $10,856 -$0- -$0- -$0- $10,856 Enterprise Fund (Fund 63) $719,965 $4,703,243 $5,024,420 ($321,177) $398,788 Self Insurance Fund (Fund 67) $84,902 $1,300 $13,000 ($11,700) $73,202

Retiree Benefit Fund (Fund 71) $87,367 $2,200 $75,000 ($72,800) $14,567

Purpose of the Report PursuanttoEducationCode§42127,schooldistrictsmustholdapublichearingonthebudgetforthesubsequentfiscalyearandthen,followingbudgetadoption,filethebudgetwiththeCountySuperintendentofSchoolsbyJuly1ofeachyear.Additionally,pursuanttoEducationCode§52062,priortobudgetadoption,eachschooldistrict’sLocalControlandAccountabilityPlan(LCAP)mustbeapprovedfollowingopportunitiesforreviewandcommentbytheLCAPAdvisoryCommittee,theEnglishLearnerParentAdvisoryCommittee,andmembersofthepublic,includingatleastonepublichearing.TheadoptionprocessrequirestwoseparateGoverningBoardpublicmeetings,heldatleastonedayapart,fortheschooldistrictbudgethearingandbudgetadoption.Inaddition,theLCAPpublichearingmustoccuratthesamemeetingasthebudgetpublichearingandtheLCAPadoptionmustoccuratthesamemeetingasthebudgetadoption.TheLCAPitemmustprecedethebudgetitemateachmeeting.Thepublichearingsrequire72hourspublicnotice.Followingbudgetadoption,EducationCode(EC)Sections35035(g),42130and42131requiretheGoverningBoardofeachschooldistricttocertifyatleasttwiceayeartothedistrict’sabilitytomeetitsfinancialobligationsfortheremainderofthatfiscalyearandforthesubsequenttwofiscalyears.ThisistheInterimReportProcess.PublichearingsforthepurposeoftakinginputontheLCAPandthe2019-20AdoptedBudgetwillbeheldduringtheJune19,2019,meetingoftheBoardofTrustees.AdoptionoftheLCAPand2018-19budgetisscheduledfortheJune20,2019,specialmeetingoftheBoardofTrustees.ThebudgetmustbedevelopedinaccordancewithcriteriaandstandardsadoptedbytheCaliforniaStateBoardofEducation.ThesecriteriaandstandardsrequireDistrictstocertifythattheirbudgetaryprojectionsareaccuratewithinestablishedrangesandtoexplainany


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significantvariances,tocertifythatthebudgetincludessufficientfacilitiesmaintenancefunding,andtocertifythattheyarelimitingdeficitspendingandmaintainingsufficientreserves.

Budget Certification Basedonthebestavailablecurrentinformationandbudgetaryassumptions,itisrecommendedthattheBoardofTrusteesoftheManhattanBeachUnifiedSchoolDistrictadopttheproposedbudgetfor2019-20andtwosubsequentyears,2020-21and2021-22. ItisadditionallyrecommendedtheBoardofTrusteescontinuetomaintainabalancedyetconservativeapproachtobudgetplanning.Asnoted,itwillbeimportanttolimitdeficitspendingandensureastronggeneralfundreserveinanticipationofongoingcashflowconsiderationsandthecombinationofincreasingcostsandlimitedrevenuegrowthinupcomingfiscalyears.

Detailed Budget Forms Thefollowingpagesincludethedetailedbudgetdocuments.ThebudgetformatestablishedbytheStateandLACOEandcomplieswiththeStandardizedAccountCodeStructure(SACS)usedthroughoutthestateaswellasanylocallyprescribedrequirements.

Budget Forms EachfundisreportedseparatelyintheSACSformatandprovidesacolumnarviewoftheadopted,currentoperatingbudget,expendituresbasedonthecloseoftheprescribedreportingperiod,proposedbudget,andthedifferencebetweenproposedandapprovedoperatingbudget.Inadditiontothecolumnarreviewoffiscalyearchangethebudgetisbrokendownbydescriptionofrevenue,expenditures,excess(deficiencyofrevenueoverexpenditures),otherfinancingsources,netchangetofundbalancefortheyear,andtheresultingendingbalancebasedonthebeginningbalance(prioryearclosingendingbalance).Definitions17areasfollows:

Revenue:Theprimaryfinancialsourceofafund.Revenuesarerecognizedwhenassetsareincreasedwithoutincreasingliabilitiesorincurringanexpendituresreimbursement.Expenditures:Thecostsofgoodsdeliveredorservicesrendered,whetherpaidorunpaid,includedexpenses,provisionsfordebt.Theexpensesaretobenefitthecurrentfiscalperiod.OtherFinancingSources/Uses:Reportingofsourcesincludeslong-termdebtproceeds,operatingtransfersin,andmaterialproceedsoffixedassetdispositions.Reportingofusesincludesoperatingtransfersout.

17CaliforniaSchoolAccountingManual,RevisedOctober2011.GlossarySection


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FundBalance:Thedifferencebetweenassetsandliabilities.Thefundequityofgovernmentalandtrustfunds.

Criteria and Standards Thecriteriaandstandardswerecreatedtodevelop,review,andassessschooldistrictandcountyofficeofeducationbudgetsandinterimfinancialreports.Theyareintendedtoprovideameasurementsystemforfiscalsolvencyonaperiodicbasis.TheDistrict’sbudgetismeasuredagainstthestandards,andadeterminationofwhetherthestandardshavebeen“met”or“notmet”ismade;thisdeterminationisintendedtofosterdialog,explanationsandmoredetailedanalysisonthepartoftheBoardofEducation,Staff,andtheCountyOfficeintheirreview.Theareasincludedare:

StandardCategories1. AverageDailyAttendance2. Enrollment3. ComparisonofEnrollmenttoADA4. LocalControlFundingFormulaRevenue5. SalariesandBenefitsinProportiontoExpenditures6. ChangesinOtherRevenuesandExpenditures7. FacilitiesMaintenance8. DeficitSpending9. FundandCashBalances10. ReservesSupplementalinformationS-1 ContingentLiabilitiesDisclosureS-2 UsingOne-TimeRevenuestoFundOngoingExpensesS-3 UseofOngoingRevenuesforOne-TimeExpendituresS-4 ContingentRevenuesS-5 ContributionsS-6 Long-TermCommitmentsS-7 UnfundedLiabilitiesS-8 StatusofLaborAgreementsDisclosureS-9 LocalControlandAccountability(LCAP)AdditionalFiscalIndicatorsA-1 NegativeCashFlowA-2 IndependentPositionControlA-3 DecliningEnrollmentA-4 CharterSchoolImpactA-5 SalaryincreasestoCOLAA-6 UncappedhealthbenefitsA-7 IndependentfinancialsystemA-8 FiscaldistressreportsA-9 ChangeofCBOorSuperintendentinayear


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SACS Budget Report TheDistrict’sSACSBudgetReporthasbeenpreparedandispresentedsimultaneouslywiththeBudgetNarrative;thedocumentsarepublishedandpostedalongsideeachothertotheBoardandtothepublic.