County Office Budgets Stan Mantooth, Ventura County Superintendent of Schools Misty Key, Merced COE...

County Office Budgets

Stan Mantooth, Ventura County Superintendent of Schools

Misty Key, Merced COE Assistant Superintendent Business

Damon Smith, Alameda COE Associate Superintendent Business

An overview by:

In these matters the only certainty is that nothing is certain.

Pliny the Elder (23AD – 79 AD)

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ChaosCounty Office budgets are as varied as life itself.

General Fund Countywide Revenue 08/09 ADA

Alameda $ 53 M 229,000Butte $ 71 M 32,000San Mateo $ 134 M 93,000Solano $ 75 M 68,000

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Confusion08/09 General Fund Unrestricted Percent of

Revenue Revenue Limit GF Rev

Alameda $ 53 M $ 10 M 19%Butte $ 71 M $ 2.4 M 3%San Mateo $134 M $12.5 M 9%Solano $ 75 M $ 3.3 M 4%

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And Mystification

% Restricted GF Resources Alameda 72%Butte 87%San Mateo 86%Solano 93%

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Unrestricted Funding• Lifeblood of our COEs• In 08-09, on average only 16% of COE

funding was from unrestricted resources• Only 5% was from unrestricted revenue limit!

• Unrestricted comes primarily from:• Revenue limit• Categorical flex programs• Interest earnings (if you’re lucky)• Local income, such as fee for service

contracts• Forest reserve funding (if you’re eligible)

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COE Revenue Limits•Unrestricted Funding

• Sometimes called core funding, other purpose funding, or county operations.

•Direct Service Funding• Juvenile Court and Community Schools

• Restricted• Special Education

• Restricted

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Unrestricted Revenue Limits• Formula driven

• Countywide ADA multiplied by a unique base rate• Base rates vary significantly

• From a low of $27.89 (08-09 P-2 data)• To a high of $547.31• Statewide weighted average is

about $50

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Juvenile Court / Community School Revenue Limits

• Two different rates are used for community school ADA. Students are funded at the district of residence rate unless they qualify for type “c” funding (on probation, parole, probation referred, and expelled).• Juvenile Court School ADA and type “c” students are funded at significantly higher rates.

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Type “c” funding myths

• The higher rate includes facility funding.

• The higher rate includes categorical funding.

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Type “c” truths• The original rates were derived from “cost of doing business” conversions and did not include any add-ons.• Costs per student are higher due to smaller class sizes.• This section of the revenue limit has been equalized (but don’t confuse it with the unrestricted portion).

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Juvenile Court / Community School • Budget winner? Budget Loser?

• Class size is critical• Some COEs the program can encroach into the

general fund or some COEs bill back to districts of residence• Sometimes the program carries its own weight

paying for all instructional and support costs

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Direct Service Funding• Formula Driven

• Countywide direct service ADA multiplied by a unique rate per ADA

•Direct service base rates vary, of course• From a low $61 per ADA• To a high of $168 per ADA

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Direct Service Funding Uses

Uses of the Direct Service funds are largely discretionary• Governed by Education Code sections 1730-1762

•Supervision of Instruction•Supervision of Attendance•Supervision of Health•Provision of Guidance Services

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Special Education Programs

• Court and Community School programs also have special education students, usually at a disproportionately higher rate• Some SELPA funding models allocate funding to court / community schools similar to other LEAs within the SELPA

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Special Education funding• Regionalized services

• Many COEs offer regionalized services on behalf of their county SELPA(s), but not all• If your COE offers these, be sure to work closely

with your SELPA on an adequate funding model. Funding models are negotiable and can be changed.

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SELPA• COEs are typically the hub for SELPA activities acting as the administrative unit (AU). This is not always the case, nor is it required.

• SELPA’s can also form as a JPA.

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Regional Occupational Program (Center)

•Under categorical flex, they don’t exist! • Prior to categorical flexibility, 43 COEs operated ROPs• 25 JPA ROPs (25 statewide)• ROPs previously funded via revenue limit with a unique funding rate per ADA•Now funding is tied to 07/08 as a base under cat flex

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Grants and Entitlements

•Many COEs have active grant writing programs to augment services to districts and internal operations•While these programs can inject much needed revenue into local districts and your COE, they also can create instability•Grants have limited life spans, rarely lasting beyond 5 years

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Instructional Facility Funding• COEs may access state funding to build court and community school classrooms or special education classrooms

•We usually qualify for hardship funding (100%)

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Administrative Facility Funding(or lack thereof)

• We have few funding sources for our administrative facilities• No access to developer fees• No access to general obligation bonds• No access to state funding• Some COEs have access to redevelopment pass thru funds

• We must use our general fund revenues• Many borrow using Certificates of Participation

• Be careful as it can impact your hardship status

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Indirect Costs• As largely administrative units, most COEs have indirect

cost rates higher than school districts• Unlike school districts, COEs must claim indirect costs

on their programs or face financial ruin• Not claiming indirect costs is the same as making a

contribution to a program or the same as allowing it to encroach on the general fund

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Comparison on Indirect Costs

• School District• $75,000,000 budget• 20% restricted• $15,000,000

restricted• 6% indirect rate• $900,000 claimable• 50% claiming rate• $450,000 impact

on unrestricted

• County Office• $75,000,000 budget• 93% restricted• $69,750,000

restricted• 10% indirect rate• $6,975,000 claimable• 85% claiming rate• $5,930,000 impact

on unrestricted

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Remembering Solano•General Fund Revenues

• $75,000,000 : 93% restricted• $3,300,000 unrestricted revenue limit• $5,930,000 indirect cost allocations

• Indirect Cost allocations can be just as important as getting your revenue limit apportionment (sometimes even more significant)

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Indirect Costs• Indirect is not revenue. It is a methodology to allocate

indirect service expenditures. Just because my roommate gave me $50 to cover the electric bill,

doesn’t mean I am any richer

• The rate for 10-11 was determined based on actual expenditures in 08-09• A steady indirect rate keeps budget volatility

to a minimum and assists programsin managing their budgets

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Allocate Expenditures• Ensure all programs are financially self sufficient

• Charge all programs for their share of maintenance and operations•M & O is not included in indirect rates

• Be sure to charge your administrative team to the programs they operate• Caution: Federal time reporting requirements

•Unallocated expenditures consume your very limited discretionary unrestricted dollars!

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Indirect Versus M&OIndirect• Accounts payable / receivable• Advertising• Audits• Budget• Communications• Financial reporting• Fingerprinting• Human resources• Legal• Payroll• Property & liability insurance• Purchasing• Technology• Warehouse

Maintenance & Operations• Custodial• Utilities

• Electricity• Natural gas• Pest control• Alarms• Water• Sewer • Garbage

• Facilities repair• Grounds upkeep

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Fee for Service• Consider fee for service programs when possible

• Examples•Charge for being the fiscal agent of a JPA•Charge for access to the financial system•Charge for targeted curriculum assistance to districts

• Programs can be entrepreneurial• Surpluses can help the general fund

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COE Cash Flow• Similar to districts, COE’s can easily have cash flow issues•However, in a very different manner of course!• Examples:

• Lack of State Budget - continuous appropriation does not provide majority of funding• Many programs operate on a

reimbursement basis

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Negotiations• COE negotiations are usually complicated• We have many diverse programs with competing

needs• Different sources of funding lead to different funded

COLAs – complicating salary schedule increases / decreases• Plan ahead and try to keep salary schedule increases

steady• Be sure to plan COLA increases when

writing grants!

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Final Thoughts• COE budgets are unusually complex and diverse• We are administrative in nature and it is reflected in our

budgets • Each program should strive to be self-sufficient• Minimize or eliminate encroachments• Maintain healthy reserves and cash balances • Good financial health leads to risk tolerance • Risk taking leads to opportunities • Opportunities lead to future successes

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• Take calculated risks. That is quite different from being rash.• George S. Patton (1885 – 1945)

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Thank you!

Any questions?