BUDGET PRESENTATION

School Finance 101Post McCleary – Now What?

Current Projections/Next Steps

“PRE-TEST/POST-TEST”

SCHOOL FINANCE“101”

Associated Student Body - ASB

SCHOOL DISTRICT FUNDS

Transportation Vehicle - TVF

Capital Projects - CPF

Debt Service – DSF

General Fund – GF

• Cultural• Athletic• Recreational• Social

ASB FUND

• Used to purchase school buses• Revenue comes from State Depreciation• TVF levy

TRANSPORTATION VEHICLE FUND

• Used to build new buildings• Major renovations• Capital technology and technology services• Revenue comes from

• Bond proceeds• Capital/Technology levy• State Match• Capital surplus lease or sale

CAPITAL PROJECTS FUND

• Used to repay bonds• Revenue comes from bond levy

DEBT SERVICE FUND

GENERAL FUND

MAIN DRIVER OF OUR REVENUE

ENROLLMENT – BUDGET & ACTUAL

18,000

18,500

19,000

19,500

20,000

20,500

21,000

20

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Actual Budgeted

WHERE OUR MONEY COMES FROM

Local Levy23%

Local non-tax2%

State68%

Federal5%

Other2%

WHERE OUR MONEY GOES

Teaching62%

Teaching Support

15%

School Administrati

on5%

Support Activities

15%

Central Administration…

PERCENT TO SALARIES & BENEFITS

Salaries Other

88%

PROTOTYPICAL SCHOOLS MODEL –A FEW EXAMPLES

State Actual (20,556 Students)

Librarians 25.178 30.600Guidance Counselors 39.737 42.260Nurses 3.151 10.100Teaching Assistants 34.707 98.300Custodians 79.162 89.481Principals 56.480 56.419

FUND BALANCE

• Indicator of a districts financial health• Part of the districts annual audit• Major determining factor to establish the districts bond rating • Board policy 6022: “To provide an adequate but not excessive reserve,

the Board of Directors has established a target committed to minimum fund balance of 4% of total expenditures in the General Fund for the ending fiscal period.”

Snohomish County School DistrictsCurrent Fund BalanceDistrict % of Expenditures

Lakewood 17.58%

Darrington 14.14%

Arlington 12.77%

Mukilteo 10.80%

Monroe 10.50%

Marysville 10.49%

Everett 9.34%

Sultan 8.74%

Lake Stevens 6.76%

Stanwood 6.75%

Snohomish 6.68%

Edmonds 4.02%

Granite Falls 171717

POST MCCLEARY -NOW WHAT?

EHB 2242 – MCCLEARY “SOLUTION”(PASSED IN 2017 LEGISLATION)

• Major changes in K-12 financing, significantly impacting both State and local funding

• Once-in-a-generation changes in:

o Salary Allocationso Local Levies and Local Effort Assistance o Collective Bargaining and Supplemental Contracts o Accountability and Transparency o Health Benefits

E2SSB 6362 – MCCLEARY“SOLUTION” 2

(PASSED IN 2018 LEGISLATION)

• Funding schedule for salaries• Regionalization in effect• “Experience Factor” adopted• Local funding limitations• Accountability• Increased Special Education Cost Multiplier• Delayed K-3 class size compliance (goes into effect 2019-20)

SUPREME COURT ORDER – JUNE 2018

• The Court:

oPurged contempt orderoLifted sanctionsoRelinquished jurisdiction in the case

• Conclusion: McCleary “is finished”

MCCLEARYA FEW OF THE MAJOR IMPACTS

• Salaries• Regionalization• Levy

SALARY ADJUSTMENTS

2018-19 2019-20Certificated Instructional Staff IPDClassified Staff 3.1 IPDAdministration 3.1 IPD

Regionalization:

• 0% = $65,216• 6% = $69,129• 12% = $73,042• 18% = $76,955• 24% = $80,868

STATE FUNDED SALARIES BY REGIONALIZATION

CERTIFICATED INSTRUCTIONAL STAFF

Edmonds = 18% Everett = 24% Mukilteo = 24%Northshore = 18%Shoreline = 24%Marysville = 18%Lake Washington = 18%

Staff Mix by District

• Edmonds = 1.57662• Everett = 1.59092• Mukilteo = 1.55340• Northshore = 1.53762• Shoreline = 1.55452• Marysville = 1.56412• Lake Washington = 1.44408

GENERAL FUND LEVY REVENUE BY FISCAL YEAR

Fiscal year 2020 & 2021 projected

50,817,255

54,671,000

57,358,307

63,072,346

57,120,142

50,057,727

52,880,510

40,000,000

45,000,000

50,000,000

55,000,000

60,000,000

65,000,000

2015 2016 2017 2018 2019 2020 2021

9.4% drop over prior year

12.4% drop over prior year

Chart1

Levy Revenue

201520162017201820192020202150817255546710005735830763072346571201425005772752880510

Sheet1

2015201620172018201920202021

Levy Revenue50,817,25554,671,00057,358,30763,072,34657,120,14250,057,72752,880,510

0.0940.124

2015201620172018201920202021

Dollars Per Student2,7452,8692,9693,2942,9832,6142,761

Enrollment

18512.111905419321.3719149.9519149.9519149.9519149.95

Levy Revenue

201520162017201820192020202150817255546710005735830763072346571201425005772752880510

Dollars Per Student

20152016201720182019202020212745.08173298451672869.26629579091012968.64596040549943293.60369087125542982.78282710920892613.98734722544942761.3915441032482

Dollars Per Student

20152016201720182019202020212745.08173298451672869.26629579091012968.64596040549943293.60369087125542982.78282710920892613.98734722544942761.3915441032482

WHAT NOW?

• While McCleary is “done,” much work remains• Implementation of HB 2242 and SB 6362— with new funding formulas,

salary allocations, levy systems, and accountability measures—is far from complete

• Court ruled that EHB 2242 may not ultimately amply fund basic education, stating: “the Court is willing to allow the State’s program to operate and let experience be the judge of whether it proves adequate”

Current ProjectionsNext Steps

2018-19 REVISED BUDGET AND 2019-20 PROJECTED BUDGET

2018-19 Revised Budget 2019-20 Projected BudgetLocal Revenue $62,704,842 $55,642,427

State Revenue $242,840,704 $244,817,155

Federal Revenue $14,648,774 $14,588,774

Other Sources $4,929,846 $4,929,846

TOTAL REVENUE $325,124,166 $319,978,202

Salaries $204,060,670 $211,566,670

Benefits $75,787,806 $79,515,078

All Other Costs $47,239,490 $44,070,348

TOTAL EXPENDITURES $327,087,966 $335,152,096

Deficit ($1,963,800) ($15,173,894)

Beginning Fund Balance $11,265,838 $9,302,038

Projected Ending Fund Balance $9,302,038 ($5,871,894)

Fund Balance as a % of Expenditures 2.84% -1.75%

OUR FILTERS

• Core Values/Commitment• Core Work – Student Learning• Return on Investment/Cost Benefit

NEXT STEPS

• Board Parameters• Staff and Community Input• Monitor Legislature• Key Dates/Milestones

BUDGET DEVELOPMENTKEY DATES

1/14/19 District-wide enrollment forecast complete – Cabinet review

1/14/19 Cabinet to establish reductions – (Program/Staffing)

1/22/19 Board Work Session

1/28/19 Cabinet to review total budget reductions and staffing ratios

2/26/19 School by school enrollment projections complete

3/26/19 Roll out certificated staffing sheets

4/09/19 Roll out classified staffing sheets

4/16/19 Certificated staffing sheets due to HR

4/23/19 Classified staffing sheets due to HR

4/23/19 First reading reduced staffing to School Board

5/14/19 Second reading reduced staffing to School Board (may change)

7/9/19 First Reading of budget

8/13/19 Second Reading and adoption of budget (Tentative)

8/27/19 School Board Special Session – Budget Adoption (If needed)

ESD 2019-20 Budget Development

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BUDGET PRESENTATION������School Finance 101�Post McCleary – Now What?�Current Projections/Next Steps“Pre-Test/Post-Test”Slide Number 3School District FundsASB FundTransportation Vehicle FundCapital Projects FundDebt Service FundGeneral FundMain Driver of our RevenueEnrollment – Budget & ActualWhere our money comes fromWhere our money goesPercent to salaries & benefitsPrototypical Schools Model – �A Few Examplesfund balanceSlide Number 17Slide Number 18EHB 2242 – McCleary “Solution”�(Passed in 2017 legislation)E2SSB 6362 – McCleary “Solution” 2�(Passed in 2018 legislation) Supreme Court Order – June 2018McCleary�a few of the major impactsSalary adjustmentsState Funded Salaries by Regionalization�Certificated instructional staffSlide Number 25Slide Number 26General fund levy revenue by fiscal yearWhat Now?Slide Number 292018-19 Revised Budget and 2019-20 Projected BudgetOur Filters�Next StepsBudget Development�Key DatesSlide Number 34Slide Number 35Slide Number 36