Anaheim Elementary School District Board Meeting April 27, 2016 Proposed: Budget Stabilization Plan Phase II

Presenters David A. Rivera Assistant Superintendent, Administrative Services

Christeen Betz Director of Fiscal Services

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Board Approved Second Interim Report: Multi-Year Budget Projections:

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Budget Stabilization Plan Phases I & II • Phase I Plan was approved by the Governing Board at the March 9 Meeting • Approved Phase I Plan consisted of a $36.2 million in augmentations to address potential $19.95 million revenue short-fall • To meet future fiscal obligations, the District is recommending the Board adopt Budget Stabilization Plan Phase II which is approximately $10 million. • The Business Department will continue presenting viable budget plans for Board consideration that will strengthen the fiscal position of the District. – .

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Recommendation 6: Revenue Enhancement Background •

Implement Saturday School Program

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Education Code authorizes Districts to recapture student absences on Saturday/Sunday

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Recaptured funding is $71/student

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Revenues Estimates (# of sessions): 2015-16 72 (24 sites x 3) 2016-17 144 (24 sites x 6) 2017-18 144 (24 sites x 6)

Fiscal Impact •

Because of declining student enrollment, funding is delayed until the following year

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Net impact to District Reserves from recapturing attendance for 100 students per school (per session) – -

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2016-17 $443K (sessions held in 2015-16) 2017-18 $885K (sessions held in 2016-17) 2018-19 $885K (sessions held in 2017-18)

Impact to Reserves An Additional $2.2 million over three years

On April 23, more than 4,100 students attended Saturday School

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Recommendation 7: Expenditure Reduction Background •

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Total on-going expenditure for Saturday School is budgeted at $930K (LCAP Report) Funds are uncommitted at this time

Fiscal Impact •

Updated the District Budget to include Recommendation 6 Projections

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Reduce current budget projections as shown in the LCAP Report

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Impact to Reserves –

An Additional $1.9 million over four years

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Recommendation 8: Energy Savings Cost Reduction Background •

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Fiscal Impact

In 2015-16 the District began a comprehensive energy savings program.

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The District will utilize $4.3 million from the California Clean Energy Jobs Act to improve energy efficiency throughout the District.

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2015-16 estimated savings from decrease in electrical bill –

2016-17 to 2018-19 –

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Annual savings is $100 thousand

Annual Savings will increase to $200 thousand per year

Impact to Reserves –

An Additional $700 thousand over four years

For December through March, the District realized over $140 thousand in savings for electricity costs 7

Recommendation 9: Increase in Trio Plan Savings Background •

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Based on recommendation from insurance broker, the District offered for Plan Year 2016 a new network referred to as TRIO. Business staff is increasing the savings estimates from the offering of the Trio Plan. At second interim, the savings estimate was $281K. The current projection has been increased by an additional $168K.

Fiscal Impact •

2015-16 total estimated savings from the Trio Plan $448K

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Future savings have been budgeted for the same amount.

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Impact to Reserves for increased Trio Savings over four years $670K –

Since Second Interim Report

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Recommendation 10: Early Incentive Retirement Program Background •

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At the April 13th Meeting, the Board approved an agreement with the Teachers Bargaining Unit which included an Early Retirement Incentive Program Offering.

Fiscal Impact •

Projected additional annual savings equal $1.4 million per year effective 2016-17.

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A total of $4.3 million in savings over four years.

28 Certificated Unit Members signed up for the offering.

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Recommendation 11: Optimize Restricted Resources Medi-Cal Background •

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Medi-Cal provides reimbursement for health assessment and treatment for eligible children and family members within the school environment. The District contracts with qualified medical practitioners to render certain health services.

Fiscal Impact •

Increase revenues by $100K in current budget year

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Transfer unrestricted expenses into Program totaling $100K

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Increase in general fund balance of $100 thousand

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2015-16

2016-17

2017-18

2018-19

Totals

$442,944

$885,888

$885,888

$2,214,720

$442,944

$885,888

$885,888

$2,214,720

$677,064

$424,128

$424,128

$424,128

$1,949,448

Recommendation 8: Energy Savings Cost Reduction

$100,000

$200,000

$200,000

$200,000

$700,000

Recommendation 9: Increase Trio Plan Savings

$167,610

$167,610

$167,610

$167,610

$670,440

$1,434,263

$1,434,263

$1,434,263

$4,302,789

$944,674

$2,226,001

$2,226,001

$2,226,001

$7,622,677

$100,000

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-

-

$100,000

$100,000

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-

-

$100,000

$3,111,889

$3,111,889

$9,937,397

Revenue Enhancement Recommendation 6: Saturday School Revenue Subtotal Expenditure Reductions Recommendation 7: Update Saturday School Exp.

Recommendation 10: Early Incentive Retirement Plan Subtotal Shift Program Costs Recommendation 11: Optimize Medi-Cal Funding Subtotal Budget Stabilization Phase ll

Total

$1,044,674

$2,668,945

Budget Stabilization Phase l

Total

$2,229,001

$13,037,566 $11,500,455

$9,493,714

$36,260,736

Grand Total

$3,273,675

$15,706,511 $14,612,344 $12,605,603

$46,198,133

$6,650,000

$6,650,000

$19,950,000

$9,056,511 $7,962,344 $5,955,603

$26,248,133

Target

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Variance

$3,273,675

$6,650,000

Other Considerations (Value of Having Adequate Reserves) • Change in State Funding

• Negotiated Salary Increases – Annual impact $6.53 million

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Additional Enrollment Decline

• Increases in operating costs above current projections – – – –

Health Insurance Premiums Workers’ Compensation Rates Change in Minimum Wage Affordable Care Act

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Next Steps……… • Questions and Comments from the Board • Reach Consensus on Budget Stabilization Plan

• Incorporate Board Decision(s) in District’s Budget Projections

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