Lowell Joint School District 2024-25 Proposed Annual Budget Report
The Lowell Joint School District presents its 2024-25 Proposed Annual Budget Report to the Board of Trustees. The report includes budget assumptions, revenue details, major changes in fund sources, and expenditure outlines such as salaries and healthcare benefits. It highlights a decline in seat attendance affecting funding and adjustments in federal, state, and local revenues. The budget cycle, key dates, and financial figures are meticulously documented in the report.
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Lowell Joint School District Tradition of Excellence Since 1906 Home of Scholars and Champions 2024-25 Proposed Annual Budget Report Presented to the Board of Trustees June 3, 2024 1
2024-25 Annual Budget Cycle June - Board Adopts Budget May Governor Issues May Revise July - State Adopts State Budget March Board Approves Second Interim Report August Board Approves 45 Day Adjustments We Are Here January Governor Proposes 24-25 State Budget September Board Approves Unaudited Actual Report District Calendar December Board Approves First Interim Report State Calendar 2
2024-25 Budget Assumptions General Fund Revenue Local Control Funding Formula (LCFF) COLA 1.07% Base Grant $29.8 Million Supplemental Grant $3.5 million Concentration Grant: $383K ADA: 2,953.04 (3 year average) (Actual 23-24 ADA=2,875.74) Official enrollment of 3,028 (Through April, 2024) Seat attendance has declined from traditional 97-98% to 95.0%, which negatively affects ongoing funding by approximately $700,000 per year 3
2024-25 Budget Revenue 2023-24 Estimated Actuals 35,682,088 $ 2,976,644 $ 3,000,988 $ 4,327,762 $ 45,987,482 $ $ 45,987,482 $ 2024-25 Proposed Budget 35,564,402 $ 1,472,105 $ 1,853,056 $ 3,849,305 $ 42,738,868 $ $ 42,738,868 $ Change (117,686) $ (1,504,539) $ (1,147,932) $ (478,457) $ (3,248,614) $ $ (3,248,614) $ LCFF Federal Income Other State Income Other Local Income Sub Total Interfund Transfer In Total 0 0 0 4
2024-25 Budget Revenue General Fund Revenue Major Changes from 2023-24 Estimated Actuals Federal Revenue One-Time Federal ESSER Funds Expiring <$1.5M> State Revenue Block Grant Recovery Payment Arts/Music Instructional Materials Grant Reduction Local Revenue Reduction in Interest Earned <$1.1M> <$474K> 5
2024-25 Budget Assumptions General Fund Expenditures Local Control Accountability Plan (LCAP) Salaries Budget per Board Approved Salary Schedules Minimum Wage Increase to $16.00 on January 1, 2024 Step, Column and Longevity: Actuals for 2022-23 Health and Welfare Maximum medical benefits package remains at Kaiser Family Rate Approximately $26,000 per covered family for 2023-24 6
2024-25 Budget Assumptions General Fund Expenditures Pension Costs STRS pension rate of 19.10% (Unchanged from 2022-23) Increases $75,000 due to Step and Column movement and 11% Salary Increase PERS pension rate increase 0.37% (26.68 from 27.05%) Approximate $26,000 increase Supplies Consumer Price Index (CPI) for 2024-25 is 3.10% School site budgets increase based on CPI Department Budgets Increase by CPI 7
2024-25 Budget Assumptions General Fund Expenditures Utilities Increasing rates Insurance Increases (property value increase, pool rate increase, excess insurance carrier increase (fires, cybersecurity, abuse claims) 8
2024-25 Budget Expenditures 2023-24 Estimated Actuals 20,520,229 $ 6,995,875 $ 11,448,297 $ 2,665,205 $ 4,099,279 $ $ $ 2024-25 Proposed Budget 20,520,670 $ 7,151,728 $ 11,580,000 $ 3,867,263 $ 4,523,661 $ $ $ Change Certificated Salaries Classified Salaries Employee Benefits Books & Supplies Services/Operating Exp. Capital Outlay Other Outgo/Xfers Out $ $ $ $ $ $ $ 441 155,853 131,703 1,202,058 424,382 9,743 (17,482) 507,311 357,889 517,054 340,407 Total 46,594,085 $ 48,500,783 $ $ 1,906,698 9
2024-25 Budget Assumptions General Fund Expenditures Major Changes from 2023-24 Estimated Actuals Classified Salaries Step & Column Statutory and Health Benefits +$156K +$131K 6% Increase to Health and Welfare Benefits Books & Supplies +$1.2M Expenditures of One-Time Funding Services/Operating Learning Recovery Block Grant and CalSHAPE Expenditures +424K 10
2024-25 Budget Assumptions General Fund Reserve Ending balance projected at $ 13.6 Million The Designation For Economic Uncertainties Reserve is 5% per board policy (state minimum is 3%) Education Code 42127(a)(2)(B&C) requires explanation of amounts above 3%. This additional 2% above the state required minimum is approximately $970,000 If the district were to reserve one month s payroll, the total would be 8% (approximately $3,200,000) U.S. General Services Administration recommends 17% reserves 11
2024-25 Budget Assumptions General Fund Reserve A resolution is required to commit, and un-commit, funds above 10% reserves for future identified needs to maintain compliance with this new requirement Annual Retiree Health and Welfare Liability Deposit into Irrevocable Trust of $200,000 Significant reduction in reserves has a negative impact on credit rating for future general obligation bond issuances. 12
Cost of Declining Enrollment/ADA Example: 2022-23 Enrollment of 3,050 ADA of 98% = $27.8M ADA of 93% = $26.4M 2023-24 COLA 8.22% Enrollment of 3,000 ADA of 98% = $29.6M ADA of 93% = $28.1M The increase of $1.7M is 6.4%, not 8.22% This is before factoring for PERS and H&W increases 13
Multi-year Projections Revenue Assumptions (Future Years) Local Control Funding Formula Sources: COLA 1.07% in 2024-25 2.93% in 2025-26 3.08% in 2026-27 3.30% in 2027-28 ADA Reduce ADA by 7 in 2024-25 due to seat attendance instability (95% vs Historic 97%) No ADA change in 2025-26 or 2026-27 (wait to see what occurs in 2024-25 enrollment) 14
Multi-year Projections Revenue Assumptions (Future Years) One-Time Funding is Gone COLA s Have Been Reduced Consumer Price Index is Rising Inflation Makes Goods More Expensive How Will the Governor Address the $8.8B Gap in Prop 98 Funding for Schools? 15
Multi-year Projections Expenditure Assumptions (Future Years) 2025-26 Other District Expenses $100,000 Special education contribution increase 2025-26 Consumer Price Index (CPI) 2.86% cost increase for supplies, services, utilities, contracted services, insurance services, non-public schools 2026-27 Consumer Price Index (CPI) 2.87% 16
Multi-year Projections Expenditure Assumptions (Future Years) 2025-26 Salaries and Employee Benefits 1.5% Certificated step and column costs 1.8% Classified step and longevity costs 0.4% Non-unit step and longevity costs 6.0% Increase in employee health and welfare benefits LJEA step/column costs assume 2 teacher retiree savings STRS pension projected at 19.1% (no change from 22/23) PERS pension increase of 0.55% (27.60% from 27.05%) Vehicle replacement Equipment Replacement Irrevocable Trust Payment 17
Multi-year Projections Expense Assumptions (Subsequent Years) 2026-27 Salaries and Employee Benefits 1.5% Certificated step and column costs 1.9% Classified step and longevity costs 0.4% Non-unit step and longevity costs 6.0% Increase in employee health and welfare benefits LJEA step/column costs assume 2 teacher retiree savings STRS pension projected at 19.1% (no change from 23/24) PERS pension increase of 0.40% (28.00 from 27.60%) Vehicle replacement Irrevocable Trust Payment 18
Multi-year General Fund Summary 2024-25 Proposed Budget 42,738,868 $ 48,500,783 $ (5,761,915) $ 2025-26 Projected Budget 43,830,936 $ 47,492,319 $ (3,661,383) $ 2026-27 Projected Budget 45,239,745 $ 47,634,963 $ (2,395,218) $ Total Revenue and Transfers In Total Expenditures & Outgoing Change in Fund Balance Beginning Balance Ending Balance Components of Fund Balance Reserved/Restricted Amounts Economic Uncertainties Assignments/Commitments Revolving Cash Undesignated Amount 19,377,303 $ 13,615,388 $ 13,615,388 $ 9,954,005 $ 9,954,005 $ 7,558,787 $ 3,934,357 $ 1,455,024 $ 8,105,088 $ $ $ 3,000,000 $ 1,447,393 $ 5,405,000 $ $ $ 3,000,000 $ 1,451,872 $ 2,750,000 $ $ 326,915 $ 30,000 90,919 30,000 71,612 30,000 19
Surplus/Deficit Spending One-Time Pandemic Funding is done Funding ongoing programs with one-time funds is not sustainable Appropriation of categorical and school site carryover also increases expenditures in the current year Attendance is slowly returning to pre-pandemic levels Deficit spending for 2024-25, 2025-26, and 2026-27 will reduce Ending Fund Balance by $11.8M 20
Future Considerations. Updates to the District budget will be provided at the August 5, 2024 Board meeting after the State budget is adopted. Governor s Budget Proposes reducing funding from the 2022-23 school year and lowering the Prop 98 guarantee This will reduce funding for schools ongoing 21
Facilities Voter approved $48 million general obligation bond MEASURE LL projects are almost complete. Thank you for the community support! Second and FINAL debt issuance in November 2020 saved local taxpayers over $5.1 million 22
Facilities (continued) State match money status All seven school sites have the first step completed: eligibility calculations for match amount Olita was submitted a few years ago and matching funds of $3.4 million were received in December, 2021 Macy was submitted for match money and matching funds of $4.7 were received in April, 2024 Total of approximately $15M in remaining State match eligibility 23
Facilities (continued) Special Reserve Fund 40.0 receives ongoing lease income and contains sale of Carden property funds This income supports deferred maintenance and repairs expenses Ongoing annual lease income will be approximately $800,000 (Starbuck property- leased to Whittier Christian HS) 24
2024-25 Facilities Funds Four Funds Deferred Maintenance planned maintenance projects Capital Facilities - developer fees for student growth Special Reserve for Capital Outlay capital facilities projects Building Fund General Obligation Bond projects Measure LL projects are accounted for here! $48 million was authorized by voters in November 2018 $14 million was issued in July, 2019 $34 million issued in October, 2020 Maybrook, Olita, El Portal, Jordan, Macy, and Meadow Green completed so far. Rancho Starbuck completion - Summer, 2024. 25
Nutrition Services Fund This federal program now requires a maximum of 6 months operating expenses in reserves: We continue to plan deficit spending for supplies and equipment to reduce reserves to meet this maximum Custodial salaries charged to this fund began in 2019/20 for the portion of daily time cleaning during and after lunch service. This added approximately $120,000 in expense to this fund, so additional reserves should be reduced or eliminated going forward. Increased Cafeteria Worker hours from 2.0 to 3.75 Nutrition Services continues to operate profitably with no contributions necessary from the General Fund 26
Child Development Fund New fund dedicated to revenue and expenditures for the early learning programs There has been high demand for these programs Forecast potentially adding classes in 2024-25 27
2024-25 Multi-Year Projection Budget Report Approval of the District s 2024-25 Proposed Adopted Budget is Recommended 28
2024-25 Multi-Year Projection Budget Report A sincere Thank You to the Business Services Team! Chelle Price Director of Fiscal Services Accounting Technicians Beatriz Rodriguez Jeanette Trevino Randi Vasquez Michelle Wolfarth 29
QUESTIONS? 30
