On September 15, the Budget Advisory Committee (BAC) met for the first time this school year. The BAC meets regularly to review the District’s General Fund budget and make recommendations for the Board of Education to consider in the budget development process. The BAC includes representation from school sites, employee associations, administration, school support groups, the community, and the Board of Education. All parents, teachers, students and staff are invited to attend and participate.
The BAC discussion focused on levels of State funding for public education, new funding obligations imposed on school districts, and the role of BAC this year.
Restoration of State Funding Is Slow. Although the extreme turbulence in State education funding that started in 2008 is now over, the District’s State funding remains below the 2008 spending level. The State is gradually reversing the funding cuts that started in 2008. Districts that serve a significant number of low-income students, English language learners, and students in foster care are receiving more rapid increases in their State allocations, because these students often come to school with unique challenges. Piedmont Unified does not have a significant number of these students, so increases in State funding for Piedmont Unified will be more gradual, reaching 2008 levels by 2020-21.
New Mandates Concerning CalSTRS and CalPERS Contributions Must Be Incorporated in Budget Planning. Last year, the State mandated increases in each district’s contribution requirements to CalSTRS (California State Teachers’ Retirement System) and CalPERS (California Public Employees’ Retirement System) – increases that are not offset by corresponding increases in State funding. Piedmont Unified’s contribution rate to CalSTRS will increase from 8.15% to 19.1% in 2020. In dollar terms, contributions to CalSTRS will increase by approximately $980,300 over the next three years to 2018-19. At the same time, the CalPERS Board adopted actuarial changes that will increase District contributions to CalPERS from 11.7% to 20.4% by 2020. In dollar terms, contributions to CalPERS will increase by approximately $271,000 over the next two years to 2017-18. The expectation is that district contributions for both plans will reach 20% by 2020.
These new CalSTRS and CalPERS contribution requirements will be a significant factor in budget planning going forward. The District anticipates that it will have to make hard choices to free up funding to cover these new obligations. At upcoming meetings, BAC will discuss the new obligations and how these may impact budget priorities going forward.
Conservative Budget Planning Continues. In October, District auditors will certify the District’s finances for the period starting July 1, 2014 and ending June 30, 2015. Due to conservative planning, there will be a positive “bottom line,” with an ending fund balance of $2.8 million, an increase of $618,000 from June estimates. This increase is due primarily to higher-than-anticipated receipts of lottery funds, overtime savings, and reduced expenditures on post-employment benefits and contract services.
The District will need to decide how much of this $618,000 should be allocated to CalSTRS and CalPERS obligations. For 2015-16, the amount due to CalSTRS and CalPERS is projected to be $340,000.
BAC Goals for 2015-16. This year, in addition to considering overall budget priorities, BAC will discuss:
- How to provide for CalSTRS and CalPERS contributions going forward.
- How to plan for salary increases, which are needed to compensate staff fairly as well as attract and retain excellent staff.
- Revenue and expenditures, and consider how the District might earn more and spend less.
- Strategies for increasing efficiency and reducing waste. For example, BAC may consider daily attendance — a key factor in per-pupil funding from the State — and strategies to improve attendance rates particularly around school holidays.
The BAC will meet again on Thursday, October 22, 3:30 – 5:00 pm, in the District Office Board Room at 760 Magnolia Avenue. For those who are interested but cannot attend BAC meetings, questions and comments about the budget may be addressed to Superintendent Randall Booker at email@example.com