Budget Update Presented to the Board of Education May 19, 2020 SECOND INTERIM RECAP FISCAL IMPACT MAY REVISION ANALYSIS $9,000 $8,000 $7,594 $7,795 General Fund Budget and Unassigned Balances at Second Interim $7,721 $7,000 $6,000 $5,000 The Second Interim projection showed a $0.4M General Fund unrestricted unassigned balance in 2021-22. $4,000 $3,000 $2,000 $1,000 $772 $758 $774 $715 $81 $0.4 The District certified "positive" and approved by LACOE. $0 2019-20 General Fund Budget 2020-21 First Interim 2021-22 Second Interim Dollars in Millions The Pandemic is Highlighting Our Preexisting Challenges Before the pandemic A higher bar for student learning and greater needs Structural deficit Declining enrollment The Pandemic is Highlighting Our Preexisting Challenges After the pandemic A higher bar for student learning and greater needs Greater depth, breadth, and inequity of student need Structural deficit Increased spending to support COVID-19 response Declining enrollment Economic uncertainty LAUSD Responds to COVID-19 • Prioritizing Health & Safety • Providing Safety Net • Technology Support • Continuity of Instruction COVID-19 Budget Impact Focus Area Service Health and Safety Safety Net Technology Instruction Total Children Adult Homeless and Childcare Operations Training Substitutes Summer School Materials Cost Identified Funding Unreimbursed $ 47 $ 47 $ - 90 33 3 72 99 36 50 103 7 $ 540 90 0 3 43 99 36 50 103 7 $ 478 33 29 $ 62 Projected expenditures through June 30, 2020, except for meals, summer school, and reopening of schools, which are projected through August 14, 2020. The costs are inclusive of all funds, including General Fund, Café, Bond, Federal Stimulus, and State Relief. Dollars in millions COVID-19 Relief Funds • Federal CARES Act for Education $ 291.2M • California LEA Response Fund $ • FEMA – preliminary estimate at $ 62.0M 7.9M Changes at May Revision for FY 2020-21 COLA K-12 LCFF Funding Lottery Funding Grants Pension Contributions Special Education Revenue Changes to be determined ($115M) ($384M) ($14M) ($26M) $71M $18M Home to School Transportation Targeted Instruction Improvement Grant Corona Virus Relief Earmarked by Governor for Education ($--) ($--) $-- Federal Heroes Act $-- LAUSD General Fund Unrestricted & Restricted Revenues Source LCFF 2020-21 2020-21 2nd Interim May Revision $5,646 $5,146 Federal 662 662* Other State 880 873 Other Local 139 139* TOTAL $7,327 $6,820 Difference % ($500) (9%) 0 0% (7) (1%) 0 0% ($507) (7%) Dollars in millions * Other estimates pending, including impact on Federal and Local sources OTHER STATE 12% OTHER LOCAL 2% FEDERAL 10% LCFF 76% Per Pupil Revenue Impact $16,800 $16,691 $16,600 $16,402 $16,400 $1,095 revenue loss per pupil $16,200 $16,000 $15,800 $15,596 $15,600 $15,400 $15,200 $15,000 19-20 20-21, Projected at Second Interim 20-21, May Revision Revised Projections • Projections were updated to reflect the impact of the COVID-19 pandemic. • Revised projections show a negative General Fund balance in 2022-23. May Revision General Fund Forecast - Ending Balance in 2023 Description Amount Ending Balance on June 30, 2022 at 2nd Interim, March 10, 2020 $ 0.4 Adding 2022-23 School Year Unreimbursed COVID-19 Costs CARES Act and LEA Response Fund Workload Budget (COLA for FY 2020-21 at 0%) May Revision (Reductions beyond Zero COLA) Enrollment Forecast Budget to Actual Variances Potential Adjustments: Health and Welfare Contract Reserve Reserve for Compensation OPEB Carryovers Real Estate Primary Promise Ending Balance, June 30, 2023 (956) (334) 299 (115) (1,246) 286 407 Dollars in Millions 167 408 50 584 100 (100) ($ 450) Advocacy for Education • Special Education funding • Move from ADA funding model to enrollment-based • Universal access to devices and internet • Release Rainy Day Fund to minimize impact to K-12 education • Personal Protective Equipment • Funding for summer school and the reopening of schools • Protection from potential liability from individuals contracting the virus • Approval to sell non-school property LA Unified Serves An Outsized Share of Students with Moderate to Severe Disabilities Moderate to severe students with disabilities make up 4.4% of LA Unified SELPA's total population; the statewide average is 2.2%. LA Unified Has Declining Enrollment, But Students with Moderate to Severe Disabilities Are Increasing Our Neediest Students Deserve Their Fair Share May Revision Proposal Fair Share Proposal Serves all students with disabilities - not based on need Supports the needs of Moderate/Severe Students $493M Statewide $493M Statewide LA Unified SELPA Serves 16% of California’s Moderate to Severe Students LA Unified SELPA Serves 16% of California’s Moderate to Severe Students LA Unified SELPA receives 6% of Available Funding LA Unified SELPA receives 16% of Available Funding $29M $78M These figures do not reflect adjustments for Special Education COLA. After adjusting for COLA, LA Unified SELPA’s allocation is expected to be $22M. Budget Calendar • May 14, 2020 – May Revision • June 15, 2020 – State Adoption of Budget • June 16, 2020 – Board Adoption of Preliminary Budget • August 2020 – Possible Revision to the State Budget • December 15, 2020 – LCAP Adoption • January 10, 2021 – FY 2021-22 State Proposed Budget • March 15, 2021 – Second Interim Financial Report for 2020-21 Fiscal Outlook • FY 2020-21 Budget is Balanced • Future COLAs unknown • State August Revision • Challenging 2021-22 and future budgets 3 KEEP CALM AND BUDGET ON Budget Update Presented to the Board of Education May 19, 2020