Getting up to speed on budget:

Addressing Student Questions about OUSD Financial Situation

Wednesday, January 17, 2018

Presented by: Troy Christmas

To: All-City Council
Agenda
1. How does OUSD get and spend money?
2. How did we get in this mess?
3. What are we doing about it?
4. Q&A
5. Public tools for greater learning

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How does OUSD get and spend money?
Budget 101

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What Money We Get - Annual Funding

General Fund is The Largest (80%) Other Funds

Unrestricted Restricted Restricted

- Cafeteria Fund

Resources (Examples) Resources (Examples) - Building Fund

- LCFF Base - Special Education (State, - Child
- LCFF Supplemental & Federal) Development
Concentration - Title I, II, III
- Adult
- Measure G - Measure N Linked Learn
- Measure G1 MS Electives
Education
- Measure J Facilities - Capital
- Grants & Donations Facilities
 Where does the money come from? - General Fund

* General Fund Only

 How is the amount determined? - (LCFF only*)

* Local Control Funding Formula 2016-17 Example

How do we spend the money?*
Schools =
$250M
- Includes ~$30M
site-paid central staff
(e.g. custodians, nurses,
school security officers,
restorative justice
coordinators)
* Unrestricted General Fund
Central =
$74M
- Excludes ~$71M in
required contributions
to restricted programs -
RRMA (routine repair
and maintenance of
facilities), Cafeteria Fund
and Special Education
- Includes ~$7M of
District-wide expenses
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How did we get in this mess?
It’s simple & it’s complicated

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The Simple Equation: Expenses > Revenue = Bad

● Deficit spending 3 of
the last 4 years.
● Fund balance (i.e.
savings) drops from
$22M in 2012-13 to
$3M to end 2016-17
● Reserve for economic
uncertainty falls below
required 2% of General
Fund costs

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The Complicated Story: We’re not alone in struggling

➞ Oakland is identified among 40 CA districts in threat of

not meeting financial obligations, including Los
Angeles, San Diego, Napa Valley, Santa Rosa,
Newark. California Department of Education.
➞ Preparing for 150 layoffs and other cuts, “We are
facing challenges much bigger than the school district
can fix,” said San Jose Unified Finance Chief & former
teacher’s union president, Stephen McMahon. San
Jose Mercury News
➞ San Diego Unified budgets $124M in cuts and
hundreds of layoffs to balance budget. San Diego
Union Tribune

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Example: Expense growth outpaces revenue

STRS/PERS
increase is one
among several
anticipated cost
increases on
annual basis
One Big Challenge: K-12 Budgeting is a moving target
Like every District budget, the 2017-18 budget travels a 2-year journey from
planning to implementation to reconciliation.

Oct – Dec 2016 Jan – Mar 2017 Apr – Jun 2017

• Enrollment Projections • State’s Budget projection
• Review student results • School & Dept. spending
• Revenue projections plans finalized
• Prioritize Expenditures • Recruitment/Layoffs
initiated
• Governor’s revised
Budget projection
• LCAP finalized/adopted
• 2017-18 Budget
finalized/adopted

Jul – Sep 2017 Oct – Dec 2017 Jan – Sep 2018

• Closing 2016-17 books • 1st Budget Revision • 2nd Interim report (Mar)
• 2017-18 actual • 1st Interim report (Dec) • 3rd Interim (May)
enrollment determined • Budget year ends (Jun)
• Closing 2017-18 books
• 2017-18 actual payroll &
(Sep)
other spending begins

2017-18 Fall Budget Revision 12

In addition, OUSD has specific challenges to overcome
Important decisions were made without full assessment of financial impact:

✓ Investments in educational programs without the financial means to

implement or sustain them;

✓ Special Education population and costs rising beyond expectations;

✓ Lack of effective planning and management of expenditures like

reimbursements, mileage, and extended contracts/ET/OT;

✓ Commitments to partnerships that exceeded available budget;

✓ Decisions outside the budget development process; and
✓ Outdated technology systems and limited monitoring tools make forecasting
and tracking more difficult.

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What are we doing about it?
Fiscal Vitality Plan

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Our challenges and solutions are now well documented

FCMAT Report

We need to make
Fiscal Vitality Plan changes now to create
systems that help us to
effectively plan and
monitor our District
budget to live within
our financial means.

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 Fiscal Vitality
Ensuring a healthy financial district is
critical towards providing the
necessary resources and services to
students with the greatest need.
❖ Stability
➢ Meet Board Policy 3100 of 3% Reserve
➢ Institute budget monitoring practices
❖ Recovery
➢ Redesign budget development process
➢ Develop internal controls on spending
& hiring
❖ Vitality
➢ Design recruitment plan to increase
student enrollment
➢ Identify strategic areas to generate
additional revenue
Questions

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 Appendix 1
Transparency Tools

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Where we are – Data and context coming together
ousd.org/fiscaltransparency

✓ School Finance Overview & Glossary

✓ Budget Updates Blog

✓ Past Presentations & Financial Records

✓ Savings Suggestion Box

✓ Ways to Get Involved

✓ New! Historical Spending Reports

✓ New! Historical Staffing Reports

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Where we’ve been – Providing the information
• Total Expenditures
• All funds
• All resources
• All sites & departments,
• All expenditure categories
• Updated monthly
Budgeted Expenses - Monthly Tracker • Filters to dig deeper
Tracks all spending on monthly basis

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Where we are – Adding context to current decisions

Historical Spending Tool Contractor Spending Tool

Historical Staffing Tool

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 Appendix 2
Other Resources

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OUSD Enrollment Decline = Decline in Resources

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Local Control Accountability Plan (LCAP)

LCAP
School Site Plans (OUSD Strategic Plan) Central Office Plans
(School Strategic Plan) (Department Strategic Plan)
District Goals
School Goals Departmental Goals
Actions/Services
Strategies/Actions Actions/Services

School Budgets Strategic Expenditures Central Budgets

Results Results Results

1000 Broadway, Suite 680, Oakland, CA 94607