BUDGET STUDY COMMITTEE MEETING

May 25, 2017

3:00 - 4:30 p.m.

Campbell Conference Room – 3rd Floor, North Building

AGENDA I. Call to Order/Roll Call – Jon R. Gundry II. Set the Agenda – Jon R. Gundry III. Review and Approval of January 24, 2017 Meeting Minutes – Jon R. Gundry IV. 2017-18 May Revision Update – Jack O'Connell & Abe Hajela, Capitol Advisors V. Legislative Updates – Jack O'Connell & Abe Hajela, Capitol Advisors

- CalPERS and CalSTRS VI. Next Meeting – To Be Determined VII. Adjourn COMMITTEE MEMBERS Jon R. Gundry, Superintendent/Committee Chair Darcie Green, Board Member Grace Mah, Board Member Claudia Rossi, Board Member Peter Daniels, Chief Public Affairs Officer Mary Ann Dewan, Deputy Superintendent Philip Gordillo, Chief Human Resources Officer Steve Olmos, Chief Schools Officer Megan Reilly, Chief Business Officer Jeanette Rodriguez-Chien, Chief Academic Officer David Wu, Chief Technology Officer Roxanne Barnett, SEIU Sandra Fakaosi, SEIU Lisa Vieler, ACE/CTA Bobby Welch, ACE/CTA

BUDGET STUDY COMMITTEE

UNAPPROVED MINUTES JANUARY 24, 2017

I. Call to Order/Roll Call

The meeting was called to order by Dr. Mary Ann Dewan, Deputy Superintendent, at 3:10 p.m.

Members Present Others Present Darcie Green, Board Member Laurie Book, Internal Business Services Grace Mah, Board Member Theresa Martinez, Business Services (recorder) Peter Daniels, Chief Public Affairs Officer Dr. Mary Ann Dewan, Deputy Superintendent Ann Jones, Interim Chief Business Officer Dr. Steve Olmos, Chief Schools Officer Dr. Jeanette Rodriguez-Chien, Chief Academic Officer David Wu, Chief Technology Officer Roxanne Barnett, SEIU

Bobby Welch, ACE/CTA

II. Set the Agenda Dr. Dewan reviewed the Budget Study Committee meeting agenda. There were no questions,

changes or amendments to the agenda.

III. Review and Approval of December 16, 2016 Meeting Minutes David Wu, Chief Technology Officer, motioned to approve the minutes of the December 16, 2016 meeting; motion seconded by Dr. Steve Olmos, Chief Schools Officer; motion carried unanimously.

IV. State Budget Update Laurie Book, Director-Internal Business Services, presented an overview of the Governor’s Proposal

for the 2017-18 State Budget and K-12 Education. The budget proposal provides no funding for critical programs and obligations, including:

- CalSTRS and CalPERS unfunded liability; - COLA for Adult Education, Child Care, or State Preschool programs; - Home-to-School Transportation programs; - LCFF “gap”; and - additional investments to deal with the State’s teacher shortage.

Ms. Book explained that 2017-18 funding for Proposition 98, the constitutional minimum guarantee

in funding for K-12 education and community colleges, is determined based on Test 3 - per capita General Fund revenues plus one-half percent of the prior year’s Proposition 98 spending amount (used in difficult economic years). Due to it being a Test 3 year, an additional $264 million in Maintenance Factor will be created. The funding level of LCFF would remain at 96% for 2017-18.

Major K-12 proposals in the Governor’s Budget include:

- $422.9 million for the K-12 portion of Proposition 39 - Clean Energy Jobs Act; - $287 million for discretionary one-time uses; - $200 million for the Career Technical Education Incentive Grant (CTEIG) Program;

- $93 million to support projected charter school ADA growth; - $58.1 million for categorical programs’ COLA (1.48%); and - $8.5 million for the Mandate Block Grant (MBG) to reflect the addition of the Training for School

Employee Mandated Reporters program. Ms. Book talked about propositions included in the Governor’s budget proposal:

- Proposition 55 extends the temporary personal income tax increase first enacted by Proposition 30, and maintains, but does not increase education funding above the Proposition level.

- Proposition 51, a state-wide bond for school facilities, provides funds for new construction, modernization, hardship, emergency and other programs specified in the current School Facility Program.

- Proposition 39, the California Clean Energy Jobs Act, provides funding for energy efficiency projects. Estimated funding for the SCCOE is $547,657 if the project is approved.

- Proposed $287 million in one-time discretionary funds for school districts, COEs, and charter

schools. Because all LEAs receive these one-time discretionary funds regardless of their

outstanding mandate claims, these funds should not be counted as meeting the state

constitutional obligation.

Ms. Book shared details of one-time funding and grant programs: - The 2017-18 estimate for the SCCOE State Mandated Costs Program (SMCP) is $75,686 based on

2016-17 P-2 ADA. - 2017-18 is the final installment of funding for the three-year Career Technical Education Incentive

Grant (CTEIG) program. Schools will be responsible for maintaining programs using LCFF funding going forward.

Ms. Book explained that SCCOE is funded on the LCFF transition calculation. The calculation includes the Operation Grant, Alternative Education Grant and Model Add-Ons. Bobby Welch, ACE/CTA, inquired about funding from Proposition 47 - a new proposition for High Risk Youth. Ann Jones will follow-up on funding details and opportunities pertaining to this proposition. - The Governor’s budget includes no new funding for special education programs beyond the 1.48%

COLA. The SCCOE’s special education costs are recovered through a rebenching process and agreements with the school districts.

- Ms. Jones clarified that because the SCCOE is funded on the transition calculation, SCCOE funding will not change after the May Revision (no COLA, flat funded).

Ms. Book reported on multiyear projections. - CalSTRS and CalPERS employer contributions continue to increase with no specific funds provided.

o 14.43% for CalSTRS in 2017-18 o 15.80% for CalPERS in 2017-18

- Health and welfare contributions are increasing. - Contributions to restricted programs continue to increase. Dr. Dewan shared that there are expectations at the State level that health and welfare costs will be absorbed locally. She also noted that significant contributions have been made to restricted programs from the SCCOE’s general fund to help offset the CalSTRS, CalPERS, and salary increases. Additionally, although ADA continues to decline, we still have obligations to our employees.

Ms. Book mentioned additional grant information:

- Educator Effectiveness – LEAs must submit final expenditure reports for the grant (provided in the 2015-16 State budget) by July 1, 2018. The SCCOE’s grant award was $552,739.

- Classified School Employees Teacher Credentialing Program – The SCCOE was awarded $200,000 for the period of December 2016 through June 30, 2018, and has 50 slots in collaboration with school districts.

- Home-to-School Transportation – LEAs are required to expend no less for those programs than the amount of funds they expended in the 2012-13 fiscal year.

- Routine Restricted Maintenance Account – The SCCOE’s estimated requirement for 2017-18 is $1,449,035.

Ms. Book reviewed the SCCOE’s budget development assumptions for 2017-18 by Branch, including

areas identified where reductions can be made in expenditures, new revenue sources, etc. Dr. Jeanette Rodriguez-Chien, Chief Academic Officer, added that COEs are going to responsible for

monitoring LCAPs and providing technical assistance to LEAs, and with no additional funding. Mr. Welch inquired if Educare continues to reach out to community partners for funding? Dr. Dewan

replied that the initial partnerships provided capital to build the facilities. Most of the program costs are Head Start and State Preschool which are County Office funded. There is some fund raising, but it does not cover the program’s operational costs.

V. Budget Development 2017-2018 Ms. Book listed the next steps in budget development:

- Budget Development workshops scheduled for February 15 and 23, 2017 - School Services May Revision workshop scheduled for May 19, 2017 - Capitol Advisors May Revision workshop scheduled for May 25, 2017 - Public Hearing for the 2017-18 Proposed Budget and LCAP scheduled for June 14, 2017 - 2017-18 Budget and LCAP Adoption scheduled for June 21, 2017

VI. Next Meeting – To Be Determined Future committee meeting dates for 2017 to be determined.

VII. Adjournment Meeting adjourned at 4:13 p.m.