The economic outlook for Pleasanton Unified School District in the near future is "much better" than when the COVID-19 pandemic started last year, according to a report on the district's budget for fiscal year 2021-22.
A combination of stimulus funding and improvement of the pandemic in recent months has made the state's economic forecast this year "much better than forecasted and projections for 2021-22 are also favorable," though a 45 Day budget revision is still expected. The Board of Trustees will discuss the projections at their regular meeting on Thursday night, starting 7 p.m.
PUSD was facing a potential reduction of 10% in their Local Control Funding Formula (LCFF) around this time last year. However, "once all the dust was settled" in June 2020 and the 2020-21 state budget had passed, the district saw no increase to their LCFF entitlement and instead received a number of one-time funds through state and federal resources "to navigate the new realities of educating students with a pandemic."
Because of a "much stronger than expected economic recovery," a 5.07% Cost of Living Adjustment (COLA) is included in Governor Gavin Newsom's May Revise budget, along with one-time pandemic-related funds and "a variety of proposed new initiatives and grants."
Though "the large COLA for 2021-22 is good news," staff said the district "is facing ongoing expenditure increases and declining enrollment which will erode into the additional LCFF funding."
PUSD experienced an enrollment drop in 2020 and lost about 400 more students this year. Staff said "much of the current enrollment reductions may be attributable to the pandemic effects," but that current enrollment projections for the 2021-22 school year indicate "an additional enrollment decline of 200-400 students."
"It is extremely difficult to anticipate how enrollment will change with improvements in the COVID pandemic situation," staff said, and noted an overall enrollment reduction of about 2.6% statewide.
Completed last year, the district's latest demographic report also shows an enrollment decline to 14,200 students, down from about 14,400. Each loss of 100 students equates to about $1 million in reduced LCFF revenues.
Staff said the establishment of PUSD's Virtual Academy in February "can help retain and attract new students thus reducing the impact from the current and projected enrollment loss," and recommended evaluating the program's initial cost "in light of its long-term goal to retain and attract new students who will benefit from this alternative educational model."
The 24-page report and accompanying budget documents also shows the district budget satisfying the 3% reserve requirement from the current fiscal year through 2024.
The district's general fund reserve including the unappropriated balance is 6.58% for 2021-22, 5.65% in 2022-23, and 5.19% the following year. Total proposed revenue for the district in 2021-22 is $180,278,313, with about $32.5 million in restricted revenues.
Staff noted PUSD "is heavily dependent on state funding," with LCFF and property tax revenue comprising about 79% of its funding.
"It is important to note that while our local property tax base is strong it does not translate to additional monies to PUSD because local property tax only provides 56-58% of the LCFF, with the state contributing the remaining portion," staff said.
General fund expenditures in the next year are expected to run around $185,819,744, with approximately $63 million in restricted expenditures. The majority of district expenditures --about 84% -- are allocated to personnel. Staff said a net $5.5 million of deficit spending is planned "partially as a result of carryover restricted funds from 2020-21 and ongoing increases in the unrestricted expenditures."
Some "significant one-time restricted state grants related to impacts from the pandemic" are also in the proposed budget," according to staff, who called the May Revise and "positive fiscal forecast" "a welcomed relief for our budget planning." Among other things, grant funds are earmarked for supplemental learning, support strategies, COVID testing, PPE, and salaries for staff providing in-person instruction or service.
While "intensive short-term support" is needed, staff said, "The district must be mindful of the medium and long-term expenditure planning as we will be facing increased costs from salaries, pension, and inflationary pressures, we will also be facing reduced revenues from declining enrollment."
Staff added, "As we move forward we must continue to be mindful and do right by our students and staff while ensuring the long-term financial stability of the district."
In other business
* The board will hold the first reading and a public hearing for the district's 2021-2024 Local Control Accountability Plan (LCAP) on Thursday.
Required under the LCFF, the LCAP is a document that outlines the district's plans to meet their annual goals for students, including actions and services to fulfill state and local priorities. The district's five organizational goals and the state's eight priorities "are connected to 'Conditions of Learning, Student Outcomes and Engagement,'" according to a staff report.
The most recent LCAP was developed following "a cycle of inquiry model" by the Local Control Accountability Council (LCAC). From September 2020 through January, the group learned in depth about the LCAP "and processed this information through group discussions using executive summaries for each action and/or service," followed by their annual Listening Campaign.
After reviewing and discussing the goals, actions and services for the new LCAP, a set of recommendations were developed for the Trustees. The council has recommended adopting the state's five organizational goals as their own, which "will increase our alignment across all district initiatives and will assist in the implementation of these efforts through cross divisional efforts," according to staff.
The top goal is "to leverage personalized learning strategies and growth assessments to close achievement and opportunity gaps," including the use of a district college and career readiness specialist and various supplemental academic programs such as summer school and College Boot Camp.
The district's second goal is "to improve student interventions and support structures through both on-site and virtual strategies" such as early literacy resources and digital resources for intervention, while their third goal aims "to continue to clarify and strengthen district policies and procedures."
To fulfill their third goal, the district will develop and put into effect a multiyear district equity plan and also work to maintain up-to-date board policies and administrative regulations.
Nearing the end of the list, the district's fourth goal is "to enhance employee recruitment, development and retention strategies" by providing professional development for certificated and classified staff "to provide instruction and support for Emerging Bilinguals, low income, foster/unhoused youth related to academic achievement, social emotional behavior, implicit bias and racial equity."
The district's fifth and final goal "to improve overall customer service and stakeholder engagement strategies" through interpretation services for parents, increasing and improving platforms for community engagement, and creating a series of parent/guardian and student engagement series targeting kindergarten transition.
A public hearing on the LCAP will also be held on Thursday, before submitting the document to the Alameda County Office of Education for review and approval.