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2018-2019 Budget Planning;

Compensation, Strategy and


Needed Reductions
May 16, 2018
Our Charge and Challenge!

This year, we called out the need to do everything we could to


recruit and retain talented employees and to get out of the bottom
quartile of salaries in our region.

Our Roadmap specifically articulates a key goal to retain more


teachers and employees in our district. In our Roadmap, this work
has been known as INVESTED EMPLOYEES. One of the key
pieces of that work is competitive compensation.
Compensation Settled and Proposed

We negotiated a retroactive increase for the 17-18 school


year at 2% for staff and a 5% ongoing for UTR starting
March 1.

We are currently proposing 8% over the coming 3 years


(3, 3, 2) for staff units with 9.5% over the next 3 years for
UTR (4.5, 3, 2) in return for increased collaboration and
professional development. All together, this is a
multi-year 10.38% raise for staff and 15.28% for UTR .
IMPORTANT NOTE: CAUTION

The rest of this presentation is NOT meant to be a full budget


presentation. The full budget presentation will happen at the June
13th Board meeting.

The object of this presentation is to help the Board understand


where we are going and the reductions and adjustments we have
made to get there.
Very specific final numbers will continue to change until we arrive to June 13th so we
encourage you to stay focused on the “how did we get there” part of the presentation
more than the big picture budgeting for this specific presentation.
Financing Competitive Compensation
We are financing additional compensation in upcoming years
through:

1. Additional state money (LCFF full implementation)


2. Reductions in both staffing and program
3. Using Restricted funds with large balances to take on eligible
general fund costs

The cumulative cost of all projected increases from 2017 through


2021 is $37m.
The Strategy
Dollars needed for a multiyear compensation package for all employees: $37m

Why $37m? This is the number we realistically believe we can budget toward. It is
aggressive AND it is also the limit at which the district is not at financial risk.

Our strategy to fund $37m is below with the blue text showing what was done this year
as our best estimates of where reductions will fall:

● New LCFF funding for 18-19 $14m


● “Truing Up” current budgets $3m ($3m)
● Staffing Reductions $10m ($4m)
● Program Reductions $4.6m ($1m)
● Contracts / Services / software $5.4m ($1m)
Reductions still needed: $14m over the next two years
Funding the 2017-2018 Raises

● We adopted a 17-18 budget with a $6m structural deficit


● The 2017-18 labor settlements = $9.6m ongoing
● YET, the projected fiscal close at roughly 2m deficit
○ $15.6m in-year change
○ Reduced the deficit through timely budget management /
improved budgeting practices/budgeting at actual costs
○ Aided by one-time money to the district in the 17-18 &
18-19 school year (made it possible to reduce over time)
Funding compensation for 2018-2019 and beyond.

While we will receive more LCFF dollars (14m) for 18-19, it does not equate to as large
increase as we have seen over the past 5 budget cycles, plus driven costs increase
yearly.

There is not enough recurring new $ to increase compensation significantly


without reductions to program and staff.

Our target number was $11m in reductions for 18-19 and we have made $9m going into
the 2018-2019 school year. We have successfully at created a balanced budget for
2018-2019 with no structural deficit.

However, we will need to make further reductions to maintain a balanced budget


for the next three years and maintain healthy district reserves in the case of an
emergency.
Reduction Details-State LCFF dollars
New LCFF 18-19 (plus COLA): $14m:
State dollars to education increased for the 18-19 school year as the state
“fully funded” LCFF. This increases revenues by $14m.

This $14m is offset by continued increases in driven costs - STRS,


PERS, step and column, increases in OPEB, and existing TAs -
functionally leaving a ($14m) deficit prior to reductions and one time
18-19 dollars

After the 2018-19 school year, the district only anticipates receiving COLA
and no additional LCFF dollars and we have planned our budgets to that
reality.
Reduction Details
“Truing Up” or Budgeting Actual Costs: $3m:
Over the past years, we have been “rolling over” our budgets from one year to the next. This year
we deeply examined the actual costs of all programs and budgeted to those actuals.

This occurred in all areas of our budget: core LCFF, supplemental LCFF and all state and federal
categoricals.

This work also included finding where General Fund expenses could be absorbed by categorical
funds with large balances, both carryover and ongoing revenue (MRAD, RRM, Categoricals, Dev
Fees)

This means less money will be left over at the end of each year and little money will go into
the ending fund balance each year. It is worth noting that “truing up of budgets can also be
seen as a program reduction as programs no longer had “extra” dollars sitting around to do
“extra things.”
Reduction Details

Staffing Reductions: $10m ($4m)


● We closed approximately 56 non-school site positions for the 18-19 school year.
We followed all contractual timelines and worked diligently with our unions.
● Many of these positions were either vacant or coming vacant.
● 15 positions we closed had current people in those positions and we successfully
found spots for some of those employees.
● 5 “layoffs” were approved by the Board on March 7th
● This yielded us about $4m dollars ongoing
Reduction Details
Bargaining Unit Department Total FTE Bargaining Unit Department Total FTE
Teamsters Business Services 1 UTR Special Education 16

Teamsters Business Services 1 UTR Special Education 2


Teamsters Business Services 1 UTR Ed Services 1
Teamsters Business Services 1 UTR Ed Services 1
Teamsters HR 1 UTR Ed Services 1
Teamsters Special Education 6 Unrepresented Communications 1
Teamsters Technology 1 Unrepresented Ed Services 1
Teamsters Technology 1 Unrepresented Business Services 1
Teamsters Ed Services 4
Unrepresented Business Services 1
WCCAA HR 1
SSA M&O 1
WCCAA HR 1
SSA Business Services 1
WCCAA Ed Services 1
SSA Business Services 1
WCCAA Ed Services 1
WCCAA Ed Services 1 SSA Business Services 1
WCCAA Ed Services 1 SSA Business Services 1
WCCAA PSC 1 SSA Special Education 1
WCCAA Kennedy HS 1 Total 56
Reductions - Operations

Communication & Software Savings:


Line and phone service restructuring - $200,000, Software Elim:
Gaggle $34,000, One Login $80,000, Barracuda $30,000 and
Maintenance support $20,000

Other: Overtime $20,000, SubStantial Contract - $27,500


Reductions - Ed. Services (Instructional, Stu. Svcs.
& Special Ed.)
$1m in hourly pay and support for PD (Instructional Leadership Team work, Best
Practices Conference, Principal Cadre Work Sessions, Teacher Additional Hourly
across core content areas, growth mindset, social/emotional learning, educational
technology, and visual and performing arts)

$397,000 in Contract Reductions - (Ed Fund Summer Program, ConnectEd, High


Expectations, Bright Futures, National Equity Project, Teacher’s College Writing
Project, Project Tree, Admin. Credential Support, Writer’s Coach Connection)

$230,000 - Materials and Food for Professional Learning

*Currently negotiating items around teacher collaboration/extra hours. We plan to use


some of those hours in lieu of current PD money that has historically been allocated.
Reductions- Specifics for coming years

Reductions that have already occurred included a great deal of


“trimming” throughout the entire budget. This means that the
system has become much “leaner” and more accurate.

However, it also means reductions moving forward may need to


be portions of or entire depts/programs/contracts that we feel
can be reduced or done without.

These decisions will be challenging but need to be determined


in the near future.
Programs reductions announced to date to be
implemented for school year 2019-20.

● Reductions are to be made during the 2018-19 school year


budget development process ($4.4m of needed $10m)
● Graduate Tutors (centrally funded) - $3m (centrally funded
site-based staff reduction)
● Centrally funded Playworks - $1.4m (program reduction)
● The balance of the reductions (5m) have not been decided on
at this time
Programs reductions announced to date to be
implemented for school year 2020-21.

● Reductions are to be made during the 2019-20 school


year budget development process ($1m of needed
$4m)
● $1m reduction in OPEB assessment (central retiree
support program contribution)due to changes in how
we assess charges in order to make future payments
● The balance of the reductions (3m) have not been
decided on at this time
Next Steps

● Comments?
● Questions?
● Timeline for planning reductions for 19-20? (Should start
immediately into the year and staff should bring a
proposal to the Board in October)
● List of largest central allocations/ district wide contracts /
services / other essential data provided to Board in
September/October