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  • Uploaded on 1. 1. Workshops created and presented by:. Gerry Shelton , Partner. Susan Stuart, Partner. Richard Gonzalez, Chief Facilities Advisor. Jack O’Connell, Partner. Kevin Gordon, President and Partner. Abe Hajela , Partner.

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Workshops created and presented by:

Gerry Shelton,


Susan Stuart,


Richard Gonzalez,

Chief Facilities


Jack O’Connell,


Kevin Gordon,

President and


Abe Hajela,


Barrett Snider,


Lee Angela Reid,

Senior Legislative



workshops created and presented by
Workshops created and presented by:

Adonai Mack

Legislative Advocate

Dave Walrath

President, Murdock, Walrath & Holmes


workshops sponsored by

Vetted among numerous energy-oriented companies by CAG on behalf of School Districts.

Energy services company that has a genuine track record of work in the K-12 education space

Direct representation of multiple lines of Energy Efficiency Equipment & Energy Dashboards

Workshops sponsored by:


budget act
2013-14Budget Act


budget act themes and thoughts
Budget Act Themes and Thoughts

Balanced and conservative

Focus on K-12 schools & health care

Compromise bridges key political and fiscal differences

It’s a transition year – LCFF, Common Core, Prop 39

Balancing local control and equity

Spend wisely – restore or redirect?


how it came together
How it Came Together

  • Compromise represented strong win by Governor across the board
    • Legislature couldn’t assert extraordinary power
    • His revenue numbers
    • LCFF – Emphasis on poverty/ELL – solving cost issues without spending more
    • Prop 39 – largely the Governor’s vision
  • Democrats – base raised, economic recovery target, tinkering on poverty/ELL formula


2013 14 budget agreement
2013-14 Budget Agreement

$96.3 billion budget with $1.1 billion in reserve

Prop 98 grows to $56.5 billion in 2012-13 and

$55.3 billion in 2013-14

$2.1 billion toward LCFF implementation

Governor’s LCFF model with some modifications

LCFF accountability system modified since May Revision

Adult Education and ROCP MOE requirement

$3.9 billion buy-down of K-12 inter-year deferrals (2 years)

$1.25 billion for Common Core implementation

$381 million to K-12 for Prop 39 implementation

$250 million for career pathway innovative grants

$50 million increase in mandate block grant funding


state revenues
State Revenues

  • The Governor appeared to low-ball 2012-13 & 2013-14 revenues to hold back legislators
  • Actual tax receipts through May and June suggest that LAO’s projections are more accurate
  • Higher GF tax receipts mean a higher Prop 98 guarantee
  • Prop 98 settle-up is used for one-time purposes in later years – this fits the Governor’s plan to pay down the “Wall of Debt” and appropriate funds without creating on-going state costs


prop 98 changes over time
Prop 98 Changes Over Time


inter year cross year deferrals
Inter-Year (Cross-Year) Deferrals


governor s plan to pay down debt
Governor’s Plan to Pay Down Debt


lcff compromise
LCFF Compromise


lcff compromise1
LCFF Compromise

Fundamental structure of Governor’s proposal retained

New: Economic Recovery Target (ERT)

New: Base Grants increased

New: Supplemental and Concentration Grants adjusted

New: CTE/Adult Ed in transition

New: Accountability modified


lcff entitlement target
LCFF Entitlement Target

  • Entitlement Target = Base Grant + Augmentations + Supplemental Grant + Concentration Grant + Add-ons
  • Base Grant per ADA (will receive annual COLA)

K-3 = $6,8457-8 = $7,154

4-6 = $6,9479-12 = $8,289

  • Augmentations– 10.4% ($711.88) for K-3 CSR and 2.6% ($215.51) for 9-12


lcff entitlement target1
LCFF Entitlement Target

Supplemental Grant – additional 20% of Base Grant + Augmentations for each EL, low income and foster pupil (by enrollment)

Concentration Grant – additional 50% of Base Grant + Augmentations for each student eligible for supplemental grant above 55% concentration threshold

Add-ons – Home-to-School Transportation and Targeted Instructional Improvement Grant (TIIG)


lcff excluded categoricals
LCFF Excluded Categoricals

  • Special education
  • After School Education and Safety Program
  • State Preschool
  • Quality Education Investment Act
  • State Testing Program
  • American Indian Education Centers
  • Early Childhood Education Programs
  • Specialized Secondary Programs
  • California Partnership Academies
  • Agricultural Education Incentive Program
  • Foster Youth Programs
  • Adults in Correctional Facilities



Hold Harmless


Entitlement Target

TIIG Add-on

Trans. Add-on

2012-13 TIIG

Concentration Grant

2012-13 Trans.

9 - 12





Supplemental Grant

K – 3 CSR Augmentation

Base Grant


Revenue Limit


economic recovery target
Economic Recovery Target

Goal is to restore all districts to at least 2007-08 funding levels by leveling up LCFF “losers”

ERT = undeficited revenue limit in 2012-13 + COLA (1.94%) for 2013-14 thru 2020-21 + categorical funding in 2012-13 w/o 20% flex reductions or “fair share” reductions

A district will transition toward the greater of its LCFF Entitlement Target or ERT

Most districts will have LCFF ET > ERT


economic recovery target1
Economic Recovery Target


Approx. 230 districts will have ERT>LCFF ET

Approximately 96 of the 230 districts will have an ERT above the 90th percentile (more than $14,500 per ADA) and will not be eligible to receive ERT payments

45 of those 96 districts receive necessary small school funding

130+ of the 230 districts will have an ERT below the 90th percentile and will receive ERT payments to restore them to their ERT by 2020-21

ERT payments will be made in 8 equal, annual installments and will be in addition to any LCFF “gap” funding

impact on small school districts
Impact on Small School Districts

Funded in LCFF if eligible

LCFF changes eligibility rules and funding levels by ratcheting down school sizes

Continues soft landing for declining enrollment - ADA is “greater of current or prior year”

NSS funding increased proportional to increases in statewide average LCFF allocations

Uncertainty for some small districts above the 90thpercentile with respect to Economic Recovery Target payments


county offices of education
County Offices of Education

  • New oversight responsibilities – LCFF
  • Supplemental and concentration grants different (supplemental Grant = 35%, concentration grant = 35% after 50%)
  • Creates two-part formula based on costs for regional services and for alternative education

Regional support funding:

    • Base grant of $655,920
    • Additional amount of $109,320 per school district in the county
    • Additional $40 to $70 per ADA in the county (based on a sliding scale, with less populated counties receiving a higher amount per ADA)

Alternative education funding:

    • Base rate of $11,045 per eligible pupil (pupils who are incarcerated, on probation, probation-referred, or mandatorily expelled)


budget act lcff data runs
Budget Act LCFF Data Runs

DOF has produced LCFF data runs, which we are providing to you

Outcomes are predicted, not guaranteed

Use this for general planning purposes, but make your own assumptions and do your own calculations


cte rocps

  • Partnership Academies, Ag Incentive Grants and Supplemental Secondary Grants pulled out
  • ROCP funds stay in the LCFF
  • 2-year prohibition on redirection of ROCP JPA funds
  • 2-year MOE requirement on ROCP expenditures
  • Grade 9-12 augmentation – restrictions (now you see them, now you don’t)
  • $250 million career pathways funding (one-time)



adult education
Adult Education

  • Adult Ed funding stays in the LCFF
  • 2-year MOE requirement on Adult Ed expenditures
  • $25 million in 2013-14 for 2-year planning and implementation grants


grades k 3 class size reduction
Grades K-3 Class Size Reduction

Transition to 24:1

Identify gap between 2012-13 K-3 average class enrollment by school site and target of 24:1

Begin to close K-3 class size gap in proportion to progress toward closing LCFF entitlement gap – 2013-14 progress toward entitlement target is 11.74%

Base Grant add-on is per ADA while CSR goal is based on enrollment

Can locally negotiate a different ratio


lcff accountability
LCFF Accountability

  • Compromise between January proposal (local control) and May Revision (strict expenditure restrictions)
  • Major decisions moved to SBE rather than Legislature
  • Most provisions will not apply for 2013-14, but be careful
  • Follow broad reference in trailer bill and DOF guidance
    • Need to plan ahead for 2014-15
    • Advocacy groups mobilized to scrutinize spending decisions


expenditure of supplemental and concentration grant funds
Expenditure of Supplemental and Concentration Grant Funds

SBE to adopt regulations by Jan 31, 2014 that:

  • Require a school district, COE, or charter school to “increase or improve services” for grant generating students “in proportion to the increase in funds apportioned on the basis of the number and concentration” of those students
  • Authorize use of these grant funds for school-wide or district-wide purposes in a manner that is no more restrictive than the restrictions in Title I of the federal No Child Left Behind Act of 2001
accountability state priorities
Accountability – State Priorities

Compliance with Williams criteria – instructional materials, teacher assignments and credentials, facilities

Implementation of SBE adopted academic content standards, including programs and services for ELs to access the common core and ELD standards

Parental involvement

Pupil Achievement – statewide assessments, API, completion of A-G requirements, CTE sequences and AP courses, EL progress toward proficiency, college preparation (Early Assessment Program)


accountability state priorities cont
Accountability – State Priorities (cont.)

Pupil engagement – attendance, dropout and graduation rates

School climate – suspension and expulsion rates, etc.

Access, including for subgroups and special needs, to a broad course of study in specified subject areas

Pupil outcomes in specified subject areas


local control and accountability plans
Local Control and Accountability Plans

By July 1, 2014 each LEA must adopt (over 2 public hearings) a local control and accountability plan (LCAP) that describes:

  • Annual goals, for all students and for each LCFF subgroup, for each of the specified state priorities and for any additional identified local priorities
  • The specific actions the LEA will take to achieve those goals


budget aligned to lcap
Budget Aligned to LCAP

For 2014-15, and each subsequent year, the LCAP must be adopted before the LEA adopts its budget

The county superintendent, or SPI, shall disapprove a budget that does not include the expenditures necessary to implement the LCAP


updated lcaps
Updated LCAPs

For 2015-16, and each subsequent year, the LCAP must be updated to include:

A review of LCAP goals, an assessment of progress toward the goals and the effectiveness of specific actions linked to those goals, and any changes to the goals and specific actions

A listing and description of expenditures (CSAM) for that fiscal year that implement the specific actions identified in the LCAP

A listing and description of expenditures that will serve students that generate supplemental and concentration grants


evaluation and technical assistance
Evaluation and Technical Assistance

  • SBE to adopt LCAP evaluation rubrics by October 1, 2015 that:
    • Assist LEAs in evaluating strengths and weaknesses and areas needing improvement
    • Assist county superintendents or the SPI to identify LEAs in need of technical assistance
    • Assist the SPI to identify LEAs for which intervention is warranted
  • California Collaborative for Educational Excellence (CCEE) - $10 million to create the CCEE to provide technical assistance to LEAs to meet the state priorities identified in each LCAP


oversight and intervention
Oversight and Intervention

  • LCAPs submitted to county superintendent (the SPI for COEs) for review, and shall be approved if:
    • LCAP adheres to SBE template, and
    • The budget includes expenditures sufficient to implement the specific actions identified in the LCAP
  • If LCAP is not approved, or if the LEA requests technical assistance, the county superintendent (or SPI) may:
    • Assist in identifying strengths or weaknesses related to the state priorities
    • Assign an academic expert or team to assist in implementing effective programs and improving student outcomes
    • Assign the CCEE to provide advice and assistance


oversight and intervention1
Oversight and Intervention

The SPI is authorized to intervene if both of the following criteria are met:

The LEA did not improve outcomes for three or more pupil subgroups (ethnic, socio-economically disadvantaged, ELs, special needs, foster youth) with respect to more than one state priority for three out of four years, AND

The CCEE has provided assistance and submits findings of failure to implement recommendations or persistent inadequate performance


oversight and intervention2
Oversight and Intervention

SPI intervention may include:

Modifications to the LCAP

Budget revisions to improve outcomes related to the state priorities

Stay and rescind any actions, other than those required by CBAs, if doing so will improve outcomes

Appoint a trustee to exercise this authority


lcap timeline
LCAP Timeline

  • January 31, 2014
    • SBE regulations on use of supplemental/concentration grant funds
  • March 31, 2014
    • SBE template for LCAPs
  • July 1, 2014
    • First LCAPs with 2014-15 budget expenditures aligned to the LCAP
  • July 1, 2015
    • First LCAP update with additional expenditure reporting
  • October 1, 2015
    • SBE evaluation rubrics


other major budget issues
Other Major Budget Issues


funding for common core
Funding for Common Core

  • $1.25 billion in one-time funds
  • Distributed based upon prior year enrollment (approx. $200 per pupil)
  • Goes to school districts, COEs, charter schools
  • May be used for professional development, instructional materials, and technology enhancement
  • LEAs may encumber funds in 2013-14 or 2014-15
  • Funds subject to annual audit
  • LEAs must:
    • Create plan for use of funds, describe and adopt at a public meeting
    • By July 1, 2015, report detailed expenditure information to CDE


proposition 39
Proposition 39

$2.5 billion over 5 years focused on K-14 exclusively

Starting in 2013‐14 - $381 million for K‐12

CA Energy Commission (CEC)to develop guidelines, application “form,” and approve applications. CDE to distribute funding.

Guidelines issues following “public input”

Funds allocated 85% on a per pupil basis and 15% on the basis of the number of NSLP eligible pupils

Goal to get funding out in the budget year.


proposition 391
Proposition 39

  • Multi-year project approval being considered
  • Grantees receiving more than $1 million must spend at least 50% on projects of $250K or more
  • Energy Conservation Assistance Account – Revolving loan program with low/no interest loans - $28M in 2013-14
    • Considerations for small LEAs
      • $15,000 minimum grant for small LEAs of 100 ADA or less
      • $50,000 minimum grant for ADA between 101 and 1,000
      • $100,000 minimum grant for ADA between 1,001 and 1,999
      • 2‐year advance on allocation available for districts with ADA 1,000 or less - August 1st Application to CDE


proposition 392
Proposition 39

Energy Commission Guidance Details To Come

  • Project Criteria Summary must:
  • Focus on energy efficiency & demand reduction first
  • Be cost-effective
  • Require contracts with specific project details (i.e. Energy calculations, specifications, & costs)
  • Submit annual financial audits
  • “Alternative energy generation projects and other innovative energy projects may be considered only if the LEA can document on their annual expenditure report that all other cost effective energy efficiency projects are already installed or have committed installation contracts.”


proposition 393
Proposition 39
  • Project Examples
    • Lighting Retrofits
    • Lighting Controls
    • Heating & Cooling Equipment
    • Heating & Cooling Controls
    • Water Heating
    • Building Envelope
    • Water Efficiency
    • Pool Equipment
    • Demand Response

  • Project Design Recommendations
    • Benchmarking
    • Sequencing of facility priority
    • Surveys and assessments


child nutrition
Child Nutrition

  • COLA on state programs funded at 1.565% ($2.438 million)
  • Decrease in projected meals served led to “growth” funding decrease of -$1.331 million
  • Increased federal funds to CDE:
    • $1.0 million to increase the frequency of compliance reviews as a result of new federal requirements
    • $200,000 to increase technical assistance on new federal requirements under the Healthy, Hunger-Free Kids Act of 2010


special education
Special Education

2013-14 COLA funded at 1.565%

Protects Necessary Small Special Education Local Plan Areas

Does not backfill $61 million federal sequestration cut

Governor vetoes $30 million for equalization

Debate over re-appropriation begins

Consolidates various programs


child care and preschool
Child Care and Preschool

Backfills $15.9 million in sequestration cuts ($11.1 million-General Child Development; $4.2 million-Alternative Payment programs; $.6 million-Migrant Day Care)

Authorizes transfer of unused CalWORKs Stage 2 funds to Stage 3, if needed

Re-appropriates $10 million in unused 2012-13 funds to establish new slots ($7 million-General Child Development; $2.6 million-Alternative Payment programs; $.4 million-Migrant Day Care)


school facilities changes
School Facilities Changes

  • Eliminates minimum contribution for routine restricted maintenance
  • Eliminates state funding for deferred maintenance, makes it a local discretion with no match
  • Allows LEAs to use proceeds from the sale of surplus property for any one-time general fund use through 2016
  • Makes permanent the requirement that a school district give first call on surplus property to charter schools (sale or lease)
    • Revises to only apply to charters with at least 80 units in-district ADA for the following fiscal year


school facilities program
School Facilities Program

  • State facilities bond funds mostly exhausted
  • OPSC no longer processing applications for eligibility, modernization, and new construction
  • Applications are checked for appropriate state approval and indexed by date order
  • Expect OPSC to resume processing some applications as we get closer to state bond approval



County Office of Education

    • $28 per K-8 ADA
    • $56 per 9-12 ADA
    • $1 per countywide ADA

School District

    • $28 per K-8 ADA
    • $56 per 9-12 ADA

Charter School

    • $14 per K-8 ADA
    • $42 per 9-12 ADA
  • Block Grant increased by $50 million for inclusion of Graduation Requirements
  • No funds for filed claim reimbursement
  • Amends Behavioral Intervention Program to essentially define away the state mandate – CSBA remains concerned
  • Block Grant election - August 30


governor s vetoes
Governor’s Vetoes

  • The Governor vetoed funding for
    • federal funds support ($225,000) by eliminating the requirement to develop a child care preschool plan for a universal preschool program
    • federal funds support ($225,000) by eliminating the requirement to translate parent notifications and templates
    • Prop 98 support ($30,000,000) of Special Education by deleting the proposed equalization of special education funding
    • Prop 98 support ($5,000,000) of State Preschool by deleting some of the proposed increase in preschool slots
  • The Governor sustained funding, but provided comments on the future of the California Collaborative for Educational Excellence, Specialized Secondary Programs, and the Agricultural Career Technical Education Incentive Program


other issues
2014 Policy and BudgetOther Issues


school facilities bond in 2014
School Facilities Bond in 2014?

  • Governor doesn’t support status quo, wants simplification and more local control
  • Potential conflict with 2014 water bond
  • Potential bond language being discussed
  • 2014 state bond probably $5-7 billion
  • Supported by SPI and education community


parcel taxes
Parcel Taxes


Expect discussions in early 2014

Dems control 2/3 needed to place Constitutional Amendment on ballot

Lowering vote threshold from 2/3 to 55%

Polling trending down

Assembly working on alternative to allow school boards to levy different types of taxes

cabs legislation
CABs Legislation

AB 182 (Buchanan)moving through Senate

  • Limiting CABs to Ed Code and financings to 25 years with max 8% interest rate
  • LEAs may use Gov. Code for standard bonds with financing at 30 years (down from 40)
  • Requiring a 4 to 1 repayment
  • All CABs must be callable
  • Requires two public presentations, financial analysis of the CAB, rationale for it, comparison with standard bond, and info about the underwriter


local bond campaign reform
Local Bond Campaign Reform

AB 621(Wagner) prohibits an LEA from entering into a financial advisory, legal advisory, underwriting, or other similar relationship with an individual or firm if that individual or firm provided, or will provide, bond campaign services to the bond campaign

Would take effect January 1, 2014

Bill pending in the Senate


cost pressures
Cost Pressures

Common Core Standards – Professional Development, Instructional Materials and Technology

CalPERS Contributions

CalSTRS Contributions

Affordable Care Act

Return to 180 Day

Return to 24:1

Employee Salaries and Benefits

Energy Costs


collective bargaining
Collective Bargaining

Expenditure, program and accountability rules are yet to be developed, so do not go beyond 2013-14

Maintenance of Effort requirements

Make management decisions within new accountability framework

Consider 2014-15 and following year obligations before finalizing agreements


the budget act and trailer bills
The Budget Act and Trailer Bills

AB 110 - Budget Bill - The 2013‐14 State Budget

SB 73 - Proposition 39 implementation- Implements the California Clean Energy Jobs Act (Proposition 39) by allocating energy efficiency funds, and providing grants to K‐12 and Community Colleges

AB 86 - K‐12 Education – Main education trailer bill; includes retiring deferrals, $1.25 billion for Common Core, and $250 million for CTE grants

AB 97 - Local Control Funding Formula - Implements the LCFF; includes LCFF grants, LCFF transition, ERT, LCFF accountability, and MOEs for ROCPs and adult education

SB 91 - Local Control Funding Formula – Enacts amendments to AB 97


thank you
Thank You

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Questions? Please contact Kristie Rucker at [email protected], or (916) 557-9745