2018-19 Proposed Expenditure Budget

PreviewJune 12, 2018

Budget Process

• Input

– Board Study/Executive Sessions

– District Budget Committee

– Negotiation Solution Team (NST) Meetings

• Proposed Budget approval provides the limit –or framework - for the Adopted Budget

– Scheduled to be considered June 26, 2018

• Adopted Budget is the official budget

– Scheduled to be considered July 10, 2018(must be approved by July 15th each year)

Note – the State forms are the official adopted budget and the Gold Book represents our Working Budget

DVUSD Financial Priorities

• Salary Increase for All Employees

• Maintain Limited Capital Funding

• Manage the Structural Deficit

Summary of Proposed Gold BookHighlights of Proposed Budget Factors

• Base Support Level– M&O Override continues at 15%

– 1.8% Inflationary increase added to M&O

– Current Year funding provision included (projecting 0.5% reduction)

– The Teacher Experience Index (TEI) is increased from 1.0128 to 1.0129

– Includes ongoing Proposition 123 funding

• M&O carryforward projected to be $1,007,000

Summary of Proposed Gold BookHighlights of Proposed Budget Factors (con’t)

• Staffing is based on a projected student enrollment decrease of 0.5%, using current staffing standards– The class size standards that are used are KDG (26), 1st (28), 2nd-3rd (29), 4th (33), 5th-6th (34),

7th-8th at K-8 schools (27), 7th-8th at middle schools (28), high schools (27.5)

• District Additional Assistance (capital) cut at least $10 million - or 65%

• Continued use cash accounts included in budget at an amount of $2,500,000 (includes: half of 5-Cash Accounts, $2.1 M; Athletic Participation Fees, $300K; Parking Fee Increase $100K )

• Includes a projection of $400,000 for Adjacent Ways projects

• Net Result is the General Budget Limit decreases from $199.8 million in FY18 to $214.6 million in FY19

FY19 Proposed Budget Summary

Base Support Level 173,371,241$

Additional $50 million 1,477,390

Transportation Revenue Control Limit 8,694,166

District Additional Assistance 5,468,581

$$ shifted to Capital (4,882,100)

Tuition Paid to Deer Valley 210,000

Override Funds 27,309,811

Use of Cash Accounts 2,100,000

Parking Fees 100,000

Athletic Participation Fee 300,000

Contingency (550,000)

Estimated Budget Balance from 2017-18 1,007,246

Projected General Budget Limit 214,606,335$

Total Maintenance and Operation Fund Expenses 214,097,237$

Budget Balance Remaining 509,098

2018-19 MAINTENANCE AND OPERATION FUND

Summary of FY19 Budget Recommendations

FY19 Budget Recommendations Amount

Full-time District Athletic Director 74,000$

Additional School-Based Administration Support 214,500$

Hard-to-Fill for Nursing positions (46 FTE) 110,000$

Substitute Teacher increase from $85 to $90/day 100,000$

Total 498,500$

Summary of Adjustments to 2018-19 Budget

Staffing• Salary increases provided for all employees:

$13 million in M&O assigned to salary increases

• Certified Increase 12% (10% plus 2% in Classroom Site Fund)

• Other Professional Staff 10%

• Average Classified Increase 7%

• Average Admin/Exempt Increase 4%

• Decrease of 3.3 FTE Teachers (due to student decline)

• Increase of 1.8 FTE Classified Staff (due to Special Education para professionals)

• Classified Salary Increase for January 1, 2018 Proposition 206 Minimum Wage

Summary of Adjustments to 2018-19 Budget (con’t)

Non-Staffing• Health Insurance rates increased 8.06% - or $1.896 million - with 100% of the

increase funded from VSEBG reserves, as well as small plan design changes

• State Retirement increased from 11.5% to 11.8%

• Utilities were not increased (due to APS rate changes related to Federal Tax Reform)

• Special Education Tuition increased $150,000

• Capital Budget established at $4.88 million in FY19 from $4.4 million in FY18

Summary of FY19 State-Imposed Budget Reductions

• District Additional Assistance (capital)

– Reduction of at least $10,169,000 (65% of $15.6 M total)

Projected Tax Rate Implications of 2018-19 Budget

• Proposition 117 (2012) Made Changes to Assessed Valuations

– Primary and Secondary Assessed Valuation combined in to one Net Assessed Valuation

– Existing Assessed Valuation growth limited to 5% annually

– Implemented for Tax Year 2015 (2015-16 School Year)

– DVUSD Net Assessed Valuation increased 5.5% to $2.575 Billion

Projected Tax Rate Changes

– Primary Rate decreasing 1.0%, or ($0.10412), to $4.2400

– Secondary Rate increasing 5.2%, or $0.1278, to $2.600

• Net impact on the average assessed value residential parcel of $202,776 is an annual increase of $66, or 7.2%

Factors Impacting Tax Changes

Primary Tax

• Assessed Valuation Change & Qualifying Tax Rate (QTR)– DVUSD Net Assessed Valuation increased 6.1%

– QTR decreased (2.8%) from $ 4.0468 in 2017-18 to $3.9358 in 2018-19

– State Equalization Assistance Property Tax Rate (SETR)

– Homeowner’s Rebate

• Cash no longer being considered in tax rate calculation

Secondary Tax

• Assessed Valuation Change

– Fixed payment schedules for bonds and overrides being paid for by an increasing assessed valuation

Questions/Comments