SAN DIEGO UNIFIED SCHOOL DISTRICT

2019-20 First Interim Financial Report

Board of EducationDecember 10, 2019

Budget Development Timeline

We Are Here

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Projections Guidance

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● Guidance on the multi-year calculations and projections is provided by the California Department of Education (CDE) and provided directly by the San Diego County Office of Education (SDCOE).

● The CDE and SDCOE are the legal overseers of district budgets, which make following their guidance a recommended approach.

LAO Guidance

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● On November 20, 2019 the Legislative Analyst’s Office (LAO) announced a fiscal picture, particularly, for K-12 education, that is optimistic for the coming year.

● As much as $7 billion surplus available to state in 2020-21● Estimates as much as $2.1 billion more in ongoing funding

beyond COLA to school districts

General Fund Multi-Year Assumptions Revenues

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Description 2019-20 2020-21 2021-22

LCFF/State Funding Model Declining Enrollment 102,243 100,709 99,199

COLA 3.26% 3.00% 2.80%

Federal: Impact Aid $10.0M $10.0M $10.0M

Other State

Mandated Block Grant $ 3.99M $ 4.08M $ 4.15M

Lottery (GFU $153; GFR $54) $207/ADA $207/ADA $207/ADA

Transfers In $21.3M $21.1M $16.1M

General Fund Multi-Year Assumptions Expenditures

*Includes: Restoration of the work year effective 7/1/2019 and 3.7% effective 1/1/2020. **Year over year increase.***Assumes solutions in 2020-21 are ongoing.

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Description 2019-20 2020-21 2021-22

Salaries and Benefits

Step and Column: Certificated/Classified** 1.85% / 1.05% 1.85% / 1.05% 1.85% / 1.05%Salary Increase* 3.7% 0% 0%STRS 17.10% 18.40% 18.10%

PERS 19.72% 22.70% 24.60%

Health & Welfare Premiums** 6.00% 6.00% 6.00%

Materials & Supplies (Consumer Price Index-CPI)** 3.33% 3.14% 3.02%

Utilities $24.9M $24.9M $24.9MBoard Solutions/Budget Shortfall*** $70.1M $41.4M

Contributions

Special Education $233.6M $249.0M $257.6M

Restricted Routine Maintenance (RRM) $43.9M $41.8M $41.2M

Increased Expenses

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Year-Over-Year Increase ~ $44M

Employer Pension Increased Costs

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GFU Impact$77 Million

$ - Mil $3 Mil $10 Mil $14 Mil $13 Mil $14 Mil $8 Mil $13 Mil $2 Mil

Solutions

● Increase revenues● Reduce expenses

○ Program Shifts○ Identify and implement greater efficiencies within

programs and services○ Spending freeze○ Reinstitute/continue hiring freeze

● Other reductions as necessary

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Note: Solutions may require bargaining

Potential Shifts

● Governor’s Budget released in January, May, June● Impacts of collective bargaining● Strategic layoffs of certificated/classified as needed in March ● Additional unexpected costs or revenues● Minimum wage analysis● CalPERS Rate● Special Education Costs

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Recommended Board Action

● Approve the First Interim Financial Report and Resolution Reflecting the District’s Financial Status from July 1 through October 31, 2019.

● Certify that the District’s Projected Financial Outlook for the current and subsequent two years is Positive◦ Positive Certification: The District WILL MEET their financial

obligations for the current and two (2) subsequent fiscal years.● To balance the budget, the Board of Education will direct the Executive

team to lead a process to identify and implement greater efficiencies within programs and services along with other needed adjustments.

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Questions and Comments

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