At an open and broadcast meeting on Wednesday, June 25, at 7:00 p.m. in the City Council Chambers, 120 Vista Avenue, the School Board will consider the following items:

• CONDUCT SECOND PUBLIC HEARING to ADOPT 2014-15 DISTRICT GENERAL FUND BUDGET AND ALL BUDGETS OPERATED BY THE DISTRICT; AND ADOPT RESOLUTION 13-2013-14
• “AUTHORIZING YEAR-END BUDGET TRANSFERS”

 Parcel Tax support has been an essential component of the District’s revenue for the maintenance of programs for students. It has grown from being approximately 11% of the District’s total revenue in 1985 to 31% in 2013-14 from Measure A as approved by voters in March, 2013 for eight years (expires June 30, 2021). Since it represents such a substantial portion of the District’s operating expenses, it is recommended that the renewal request to the community is early enough (no later than Spring 2019) to incorporate the outcomes in the multi-year budget projections.

 Funds raised by Parent/Support Groups to support programs remain an integral part of the District’s budget, representing over $1.55M per year. 

 The Piedmont Educational Foundation Endowment Fund support is provided at $250,000/year.

District enrollment has been increasing slightly.

The District will present a revision to this Adopted Budget (called the Revised Budget) within 45 days that will provide a clearer picture.

 The State has provided Cost of Living Adjustments (COLAs) for 2014-15 in the amount of 0.85%. COLAs for 2015-16 (2.19%) and 2016-17 (2.14%) are incorporated as part of the District’s multi-year projections.

• APPROVE SALARY AND BENEFITS FOR ALL UNREPRESENTED EMPLOYEES OF THE DISTRICT (ASSOCIATION OF PIEDMONT SCHOOL ADMINISTRATORS AND SUPERINTENDENT) CONSISTENT WITH COLLECTIVE BARGAINING GROUPS

It is requested that the Board approve the one-time payment for a furlough day in 2013-14; an increase to the salary schedules of 3%; and the increase in the District contribution to medical benefits – as agreed to for APT – for unrepresented employees. The costs associated with the increase have been incorporated into the 2014-15 Adopted Budget as presented this evening.

Pension Costs are projected to rise dramatically.

STRS (State Teachers Retirement System) Employer Rates were proposed from the current 8.25% to 9.50% (in 2014-15), 11.10% (in 2015-16), and 12.70% (in 2016-17), increasing incrementally thereafter to 19.1% by 2020. These rates have been modified somewhat, with employers taking a proposed smaller step in the first year, but continuing to increase until the 19.1% rate is reached in 2020-21. As specified in Assembly Bill 1469, employer contribution rates would be as follows: from 8.25%to 8.88% (in 2014-15) to 10.73% (in 2015-16), and 12.58% (in 2016-17). As of this writing, the rates have not been finalized, so they are not included as part of the 2014-15 Adopted Budget.

The California Public Employees Retirement System (CalPERS) for classified employees is also projected to increase incrementally from 11.7% in 2014-15 to 20.4% by 2020. Before the implementation of LCFF, CalPERS adjustments were made to school district revenue limits. Now any increases in CalPERS contribution rates will have a direct impact on the budget.

The effect of increasing employer contributions for both CalSTRS and CALPERS (without additional State funding to support these increases) will be most profound in the District’s multi-year projections. 

Governor’s Budget: 

The 2014-15 State Budget contains a number of controversial provisions, specifically a requirement that districts “substantiate” the need for an “unassigned or assigned ending fund balance” above the required minimum reserve (beginning with budgets adopted for the 2015-16 fiscal year). At the public hearing for budget adoption or revision (as described above), districts would need to substantiate the reasons for any “excess,” and the Alameda County Office of Education (ACOE) would be required to determine whether the District complied with these requirements.

If the Governor’s “Rainy Day Fund” is approved by voters in November, in the year following a deposit into the Proposition 98 portion of the “Rainy Day Fund,” districts would not be able to have reserves more than twice the minimum required by state regulation, which for the Piedmont Unified School District would amount to 6 percent (twice the 3% minimum). ACOE could provide PUSD an exemption under “extraordinary fiscal circumstances,” but only for up to two consecutive fiscal years within a three-year period; in the third year, or in any year a district does not receive an exemption, a district would need to spend down its reserves to the new maximum or below. The language was amended between its drafting and its adoption to clarify that the reserve cap is only active in the year immediately after a fiscal year in which the state makes a deposit into the Proposition 98 reserve.

The Board packet can be read here.

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