Background:
Budget Timeline
The budget process of a school district requires the district to produce and adopt a budget by June 30 for the upcoming year. The Board is required to certify twice each year that the district is able to meet its financial obligations during the year. The two intermediary reports afford the district the opportunity to adjust the budget’s revenues and expenditures based on the current climate and events. The First Interim Report reflects activities for July 1 – October 31 and is adopted by December 15. The Second Interim Report covers July 1 – January 31 and is adopted by March 15. By September 15, the district publishes the Unaudited Actual based on July 1 – June 30 of the previous year.
Revenues
The Board reviewed the budget assumptions for the 2020-2021 Budget and Multi-Year Projection (MYP) at the May 21, 2020 board meeting. The assumptions included an estimate of the assessed valuation growth to be 10% in 2020-2021, and carried the assumption of 0% growth to years two and three of the MYP (2021-2022 and 2022-2023, respectively) due to uncertainty. The Governor’s May Revise Budget was nothing like his January proposal. The 2020-21 budget year faces many uncertainties due
to the fiscal storm created by the COVID-19 pandemic. The Governor’s 2020-21 Budget Revision issued on May 14, 2020, proposed that California School Districts would get cut 10% on State Revenues comprised of an unfunded
COLA of 2.31% and 7.92% reduction in current funding. During the May revise the Governor also proposed buying down the employer contribution to STRS and PERS.
Expenditures
Using our Estimated Actuals budget, the estimated ending balance for 2019-2020 is anticipated to be $21,277,179, unrestricted and restricted combined. The estimated ending balance of 2019-2020 is the beginning balance for the 2020-2021 budget adoption. Included in the budget for 2020-2021 school year are additional funds to support distance learning including additional technology and technology support.
Summary
The presented 2020-2021 Budget Adoption reflects the District’s priorities for the upcoming years while taking into account the COVID-19 impact on our funding. The District will have a balanced budget in the 2020-2021. We anticipate additional changes to come out from the state over the next few months as the legislator continues to make changes to the state budget. Staff will continue to monitor the changes daily.
Fiscal Implication:
Fund 01 General Fund 2020-2021
Unrestricted Beginning Balance: $19,177,736
Total Revenues: $85,718,853
Total Expenditures: $85,513,670
Unrestricted Ending Balance: $20,605,085
Estimated Reserve: 24.10%
Recommended Action:
That the Board of Trustees conduct a Public Hearing and discuss the 2020-2021 Budget Adoption with final adoption at the June 18, 2020 Board meeting.