Community PresentationAlum Rock, Franklin McKinley and Mt. Pleasant

Local Control Funding Formula 101 For School Districts

October 29, 20135:30 PM

Presentation Items

1. Overview of Governor’s 2013-14 Budget

2. Programs Consolidated into Local Control Funding Formula

3. Local Control Funding Formula (LCFF) Calculations

4. Other LCFF Program Requirements

5. LCFF Transition Funding Protection

6. Areas of Concern with LCFF

7. Sample District

8. Questions

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• On Thursday, June 27th, 2013, Governor Jerry Brown signed the 2013-14 State Budget Bill (AB 110)

• On July 1, 2013, the K-12 Local Control Funding Formula (LCFF) and AB 97, the corresponding clean-up bill were signed into law

• This enacted trailer bill is the biggest change to California’s school finance system since SB 90 more than 40 years ago

• LCFF completely changes the way revenue and categorical program funding is distributed to school districts and County Offices of Education (COEs)

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Overview

LCFF replaces the existing revenue limit funding system and more than 40 categorical programs by consolidating them into one revenue stream on a permanent basis

The LCFF time frame for full implementation is eight years

The plan calls for the state to allocate an estimated $25B toward funding the LCFF over the next eight years (through 2020-21)

The 2013-14 Budget provides the following for the first-year implementation: $2.1B for School Districts and Charter Schools $32M for County Offices of Education

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Overview

LEAs will receive roughly the same amount of funding they received in 2012-13 plus an additional amount each year to bridge the gap between the current funding levels and the new LCFF target levels

Fiscal year 2013-14 will be an important transition year

Many areas of the LCFF are still being worked out

This update and presentation are based on the information that is currently available. However, there are still many unanswered questions.

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Overview

Administrator Training ProgramAdult EducationAdvance Placement Fee ReimbursementArts and Music Block GrantBilingual Teacher TrainingCalifornia Association of Student CouncilsCalifornia High School Exit ExamCalifornia School Age Families EducationCenter for Civic EducationCertificated Staff MentoringCharter School Categorical Block GrantClass-size Reduction (K-3 and 9th Grade)County Office of Education Fiscal OversightCommunity Based English TutoringCommunity Day School Additional FundingSupplemental Instruction Deferred MaintenanceEconomic Impact AidEducation TechnologyGifted and Talented Education

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Programs Consolidated Into LCFFInstructional Materials Fund Realignment ProgramInternational BaccalaureateMath and Reading Professional DevelopmentMath and Reading Professional Development-ELMiddle and High School CounselingNational Board CertificationNew Charter Supplemental Categorical Block GrantOral HealthPeer Assistance and ReviewPhysical Education Teacher IncentiveProfessional Development Block GrantPupil Retention Block GrantReader Services for Blind TeachersRegional Occupational Centers/Programs (ROC/P)School and Library Improvement Block GrantSchool Safety (and Competitive) Block GrantSmall District/COE Bus ReplacementTeacher Credentialing Block GrantValenzuela County OversightWilliams County Oversight

• LCFF for school districts and charter schools is calculated in the following order: Base Grant Augmentation to the Base Grant Supplemental Grant Concentration Grant Add-ons to the formula

• The budget projects the time frame for full implementation of the LCFF to be eight years

• On the following slides, we will explain the calculation

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LCFF-School Districts and Charter Schools

LCFF-School Districts and Charter Schools

• Base grant per ADA by grade span

Instead of funding based on revenue limits and categorical programs, districts and charter schools are provided Base grants

The are four Base grants per ADA, one fore each of the four grade spans list above

Grade span per-pupil grants are increased annually for a COLA For 2013-14, the COLA is 1.565%

Factors K-3 4-6 7-8 9-12

Base Grant per ADA $6,845 $6,947 $7,154 $8,289

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LCFF-School Districts and Charter Schools

• Augmentation to the Base Grant

K-3 Class Size Reduction (CSR) and 9-12 Career Technical Education (CTE) are additions to the base grant

K-3 CSR funding augments the K-3 grade span base grant - 10.4% or about $712 per ADA

Districts must make progress in reducing its class-size to qualify

Career Technical Education (CTE) funding augments the 9-12 grade span base grant – 2.6% or about $216 per ADA

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LCFF-School Districts and Charter Schools

• Supplemental grant Equal to 20% of the (1) Base Grant for each English Language Learner

(ELL), student eligible for free or reduced price meal, and/or foster student (unduplicated count) and (2) Augmentation to Base Grant

Each school district and charter school must report an unduplicated count of eligible pupils annually using the California Longitudinal Pupil Achievement Data System (CALPADS)

The County Office of Education is required to review and validate certified counts of eligible pupils for each school district and charter school to ensure data is reported accurately

The percentage of pupils eligible for Supplemental grants is based on a three-year rolling average

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•Concentration grant Equal to 50% of the (1) Base Grant for each ELL, student eligible for

free or reduced price meal, and/or foster child above 55% of the total enrollment (unduplicated count) and (2) Augmentation to Base Grant

Reporting and oversight is same as Supplemental grant

•Add-ons to formula Transportation Targeted Instructional Improvement Block Grant (TIIBG) Districts and County Offices of Education that receive Transportation

and TIIBG funding will continue to have that funding capped at 2012-13 levels, as an addition to their LCFF base grant

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LCFF-School Districts and Charter Schools

LCFF-School Districts and Charter SchoolsRevenue Limit vs. LCFF Funding

Revenue Limit (Pre 2013-14) LCFF (2013-14)

Revenue LimitBase Funding

Tier III & Categor-ical

CSR & CTE Augmenta-tion

Supplemental Grant

Concentration Grant

Add-on

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LCFF-School Districts and Charter SchoolsRevenue Limit vs. LCFF Funding

Revenue Limit (Pre 2013-14) LCFF (2013-14)

Revenue LimitBase Funding

Tier III & Categor-ical

CSR & CTE Augmenta-tion

Supplemental Grant

Concentration Grant

Add-on

8 years

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• LCFF provides a 10.4% increase to the K-3 Base Grant or $723 per ADA

• To received these additional funds, districts must make progress toward the 24 students per class enrollment target

• Districts are expected to reach the maximum average enrollment of no more than 24 students:

At each school site By the time the LCFF is fully implemented (planned for 2020-21) Unless an alternative is locally negotiated

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K-3 Class Size Reduction Funding

• Annual progress toward the goal of 24:1 is required

• Required progress toward the 24 students per class target in proportional to the statewide funding provided to implement the LCFF

For 2013-14, this is 11.78% For 2014-15, this is projected at 16.49%

• Failure to meet the annual enrollment target at any site results in the loss of the K-3 adjustment funding for the entire district

• Significant penalty for missing the enrollment target at just one school site

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K-3 Class Size Reduction Funding

Deferred Maintenance (DM)• DM is now included in the LCFF Base Grant• Districts must continue to make budget planning decisions to include

expenditures for DM• Set aside ongoing funds within the LCFF for Deferred Maintenance needs

Routine Restricted Maintenance Account (RRMA)• Flexibility to set aside 1% of total General Fund expenditures or less expires

in 2014-15• The 3% set aside will be required after June 30, 2015• Requirements for the following continues:

Williams requirement Safe, clean, functional instructional environments for student success

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Deferred Maintenance & RRMA

Funding model provides several means of protecting LEAs from funding loss during the transition period• Hold Harmless Provision

LCFF provides a hold harmless protection for districts and charter schools based on State Aid received in 2012-13

State aid “hold harmless” test is applied annually, adjusted each year for changes in ADA

• Adult Education MOE Requirement LEAs are required to maintain funding levels for Adult Ed based on the

amount expended for these programs in 2012-13 from the funds received for this program

The minimum funding level must be maintained for 2013-14 and 2014-15 LEAs are not required to count any local contribution in establishing the

Maintenance Of Effort (MOE) level

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LCFF Transition Funding Protection

• Transportation MOE Requirement Requires Transportation funds to be spent for the purposes of

transporting students, with spending to be no less than what districts and COE’s spent in fiscal year 2012-13

The funds are now unrestricted LEA’s are not required to count any local contribution in establishing

the Maintenance Of Effort (MOE) level COE’s and school districts receiving funds for transportation in 2012-

13 are prohibited from redirecting that funding for another purpose and must continue to provide the same amount to the Joint Powers Agencies (JPAs) to maintain the transportation program

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LCFF Transition Funding Protection

• Regional Occupational Center (ROP) MOE Requirement Of the funds that school districts and County Offices of Education

receive for purposes of ROP, they are required to maintain their 2012-13 level of spending for ROPs in 2013-14 and 2014-15 only

• Economic Recovery Targets (ERT) The ERT is designed to provide additional funding under for school

districts and charter schools that would not otherwise recover to their pre-recession funding levels under the LCFF

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LCFF Transition Funding Protection

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• Still many unknowns in the new LCFF• No more statutory requirement on education funding

Future state funding is dependent on the economy Statutory COLA not necessary correspond to the change in funding State determines how much to put toward LCFF each year

• Difficult to evaluate and compare Districts and COEs Every COE and District funding will be unique

• Impact of district ADA on COE base funding Declining enrollment in some districts

• Number of years to reach the targeted funding New Governor in the future Changes in the economy Proposition 30 Expiration Impact

Areas of Concern with LCFF

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2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 $6,000

$6,500

$7,000

$7,500

$8,000

$8,500

$9,000

$9,500

Funding Per ADA

Sample District Best Case Scenario, But Cautions Remain

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Sample District Best Case Scenario, But Cautions Remain

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

COLA1 1.565% 1.800% 2.300%

% of Gap Funding2 11.78% 16.490% 18.690%Gap Funding Increase 3,751,638$ 5,251,656$ 5,952,301$

RL/LCFF 62,851,189$ 61,808,500$ 60,838,474$ 82,672,040$ 89,344,262$ 97,144,406$ 42,533,224$ 40,364,200$ 39,121,225$

State3 25,214,938$ 26,343,291$ 26,317,394$ 9,307,342$ 7,525,166$ 7,525,166$

Total Revenue 88,066,127$ 88,151,791$ 87,155,868$ 91,979,382$ 96,869,428$ 104,669,572$

P-2 ADA4 12,222.67 12,028.66 11,614.53 11,375.11 11,375.11 11,375.11

Funding Per ADA 7,205$ 7,328$ 7,504$ 8,086$ 8,516$ 9,202$

& reflects 2013-14 projection for a $-per-ADA comparison

Notes:1 - per School Services of California Dartboard projection2 - per Department of Finance estimate3 - 2013-14 State Revenue includes one-time funding for Common Core4 - ADA & Socio-Economic factor assumed to remain the same in out years

Alum Rock

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• Still many unknowns in the new LCFF• No more statutory requirement on education funding

Future state funding is dependent on the economy Statutory COLA not necessary correspond to the change in funding State determines how much to put toward LCFF each year

• Difficult to evaluate and compare Districts and COEs Every COE and District funding will be unique

• Impact of district ADA on COE base funding Declining enrollment in some districts

• Number of years to reach the targeted funding New Governor in the future Changes in the economy Proposition 30 Expiration Impact

Reminder: Areas of Concern with LCFF

Questions?

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