Local Control Funding Formula 101 presentation by the Santa Clara County Office of Education. The presentation was provided at the Local Control Funding Formula 101 Community Forum and Discussion held on October 29, 2013, at James Lick High School in San Jose, CA.

1. Community Presentation
Alum Rock, Franklin McKinley and Mt. Pleasant
Local Control Funding Formula 101 For School Districts
October 29, 2013
5:30 PM

2. Presentation Items
1. Overview of Governor’s 2013-14 Budget
2. Programs Consolidated into Local Control Funding Formula
3. Local Control Funding Formula (LCFF) Calculations
4. Other LCFF Program Requirements
5. LCFF Transition Funding Protection
6. Areas of Concern with LCFF
7. Sample District
8. Questions
2

3. Overview
• On Thursday, June 27th, 2013, Governor Jerry Brown signed
the 2013-14 State Budget Bill (AB 110)
• On July 1, 2013, the K-12 Local Control Funding Formula
(LCFF) and AB 97, the corresponding clean-up bill were signed
into law
• This enacted trailer bill is the biggest change to California’s
school finance system since SB 90 more than 40 years ago
• LCFF completely changes the way revenue and categorical
program funding is distributed to school districts and County
Offices of Education (COEs)
3

4. Overview
 LCFF replaces the existing revenue limit funding system and
more than 40 categorical programs by consolidating them into
one revenue stream on a permanent basis
 The LCFF time frame for full implementation is eight years
 The plan calls for the state to allocate an estimated $25B toward
funding the LCFF over the next eight years (through 2020-21)
 The 2013-14 Budget provides the following for the first-year
implementation:

$2.1B for School Districts and Charter Schools
 $32M for County Offices of Education
4

5. Overview
 LEAs will receive roughly the same amount of funding they
received in 2012-13 plus an additional amount each year to
bridge the gap between the current funding levels and the new
LCFF target levels
 Fiscal year 2013-14 will be an important transition year
 Many areas of the LCFF are still being worked out
 This update and presentation are based on the information that
is currently available. However, there are still many unanswered
questions.
5

6. Programs Consolidated Into LCFF
Administrator Training Program
Adult Education
Advance Placement Fee Reimbursement
Arts and Music Block Grant
Bilingual Teacher Training
California Association of Student Councils
California High School Exit Exam
California School Age Families Education
Center for Civic Education
Certificated Staff Mentoring
Charter School Categorical Block Grant
Class-size Reduction (K-3 and 9th Grade)
County Office of Education Fiscal Oversight
Community Based English Tutoring
Community Day School Additional Funding
Supplemental Instruction
Deferred Maintenance
Economic Impact Aid
Education Technology
Gifted and Talented Education
Instructional Materials Fund Realignment Program
International Baccalaureate
Math and Reading Professional Development
Math and Reading Professional Development-EL
Middle and High School Counseling
National Board Certification
New Charter Supplemental Categorical Block Grant
Oral Health
Peer Assistance and Review
Physical Education Teacher Incentive
Professional Development Block Grant
Pupil Retention Block Grant
Reader Services for Blind Teachers
Regional Occupational Centers/Programs (ROC/P)
School and Library Improvement Block Grant
School Safety (and Competitive) Block Grant
Small District/COE Bus Replacement
Teacher Credentialing Block Grant
Valenzuela County Oversight
Williams County Oversight
6

7. LCFF-School Districts and Charter Schools
• LCFF for school districts and charter schools is calculated in
the following order:
 Base Grant
 Augmentation to the Base Grant
 Supplemental Grant
 Concentration Grant
 Add-ons to the formula
• The budget projects the time frame for full implementation of
the LCFF to be eight years
• On the following slides, we will explain the calculation
7

8. LCFF-School Districts and Charter Schools
• Base grant per ADA by grade span
Factors
Base Grant per ADA
K-3
4-6
7-8
9-12
$6,845
$6,947
$7,154
$8,289
 Instead of funding based on revenue limits and categorical programs,
districts and charter schools are provided Base grants
 The are four Base grants per ADA, one fore each of the four grade
spans list above
 Grade span per-pupil grants are increased annually for a COLA
 For 2013-14, the COLA is 1.565%
8

9. LCFF-School Districts and Charter Schools
• Augmentation to the Base Grant
 K-3 Class Size Reduction (CSR) and 9-12 Career Technical Education
(CTE) are additions to the base grant
 K-3 CSR funding augments the K-3 grade span base grant - 10.4% or
about $712 per ADA
 Districts must make progress in reducing its class-size to qualify
 Career Technical Education (CTE) funding augments the 9-12 grade
span base grant – 2.6% or about $216 per ADA
9

10. LCFF-School Districts and Charter Schools
• Supplemental grant
 Equal to 20% of the (1) Base Grant for each English Language Learner
(ELL), student eligible for free or reduced price meal, and/or foster
student (unduplicated count) and (2) Augmentation to Base Grant
 Each school district and charter school must report an unduplicated
count of eligible pupils annually using the California Longitudinal Pupil
Achievement Data System (CALPADS)
 The County Office of Education is required to review and validate
certified counts of eligible pupils for each school district and charter
school to ensure data is reported accurately
 The percentage of pupils eligible for Supplemental grants is based on a
three-year rolling average
10

11. LCFF-School Districts and Charter Schools
•Concentration grant
 Equal to 50% of the (1) Base Grant for each ELL, student eligible for
free or reduced price meal, and/or foster child above 55% of the total
enrollment (unduplicated count) and (2) Augmentation to Base Grant
 Reporting and oversight is same as Supplemental grant
•Add-ons to formula
 Transportation
 Targeted Instructional Improvement Block Grant (TIIBG)
 Districts and County Offices of Education that receive Transportation
and TIIBG funding will continue to have that funding capped at
2012-13 levels, as an addition to their LCFF base grant
11

12. LCFF-School Districts and Charter Schools
Revenue Limit vs. LCFF Funding
Add-on
Concentration Grant
Supplemental Grant
CSR & CTE Augmentation
Tier III & Categorical
Revenue Limit
Revenue Limit (Pre 2013-14)
Base Funding
LCFF (2013-14)
12

13. LCFF-School Districts and Charter Schools
Revenue Limit vs. LCFF Funding
Add-on
Concentration Grant
Supplemental Grant
CSR & CTE Augmentation
Tier III & Categorical
Revenue Limit
Revenue Limit (Pre 2013-14)
Base Funding
LCFF (2013-14)
13

14. K-3 Class Size Reduction Funding
• LCFF provides a 10.4% increase to the K-3 Base Grant or $723 per ADA
• To received these additional funds, districts must make progress toward
the 24 students per class enrollment target
• Districts are expected to reach the maximum average enrollment of no
more than 24 students:
 At each school site
 By the time the LCFF is fully implemented (planned for 2020-21)
 Unless an alternative is locally negotiated
14

15. K-3 Class Size Reduction Funding
• Annual progress toward the goal of 24:1 is required
• Required progress toward the 24 students per class target in proportional
to the statewide funding provided to implement the LCFF
 For 2013-14, this is 11.78%
 For 2014-15, this is projected at 16.49%
• Failure to meet the annual enrollment target at any site results in the loss
of the K-3 adjustment funding for the entire district
• Significant penalty for missing the enrollment target at just one school site
15

16. Deferred Maintenance & RRMA
Deferred Maintenance (DM)
• DM is now included in the LCFF Base Grant
• Districts must continue to make budget planning decisions to include
expenditures for DM
• Set aside ongoing funds within the LCFF for Deferred Maintenance needs
Routine Restricted Maintenance Account (RRMA)
• Flexibility to set aside 1% of total General Fund expenditures or less expires
in 2014-15
• The 3% set aside will be required after June 30, 2015
• Requirements for the following continues:
 Williams requirement
 Safe, clean, functional instructional environments for student success
16

17. LCFF Transition Funding Protection
Funding model provides several means of protecting LEAs from
funding loss during the transition period
• Hold Harmless Provision
 LCFF provides a hold harmless protection for districts and charter schools
based on State Aid received in 2012-13
 State aid “hold harmless” test is applied annually, adjusted each year for
changes in ADA
• Adult Education MOE Requirement
 LEAs are required to maintain funding levels for Adult Ed based on the
amount expended for these programs in 2012-13 from the funds
received for this program
 The minimum funding level must be maintained for 2013-14 and 2014-15
 LEAs are not required to count any local contribution in establishing the
Maintenance Of Effort (MOE) level
17

18. LCFF Transition Funding Protection
• Transportation MOE Requirement
 Requires Transportation funds to be spent for the purposes of
transporting students, with spending to be no less than what
districts and COE’s spent in fiscal year 2012-13
 The funds are now unrestricted
 LEA’s are not required to count any local contribution in establishing
the Maintenance Of Effort (MOE) level
 COE’s and school districts receiving funds for transportation in 201213 are prohibited from redirecting that funding for another purpose
and must continue to provide the same amount to the Joint Powers
Agencies (JPAs) to maintain the transportation program
18

19. LCFF Transition Funding Protection
• Regional Occupational Center (ROP) MOE Requirement
 Of the funds that school districts and County Offices of Education
receive for purposes of ROP, they are required to maintain their
2012-13 level of spending for ROPs in 2013-14 and 2014-15 only
• Economic Recovery Targets (ERT)
 The ERT is designed to provide additional funding under for school
districts and charter schools that would not otherwise recover to
their pre-recession funding levels under the LCFF
19

20. Areas of Concern with LCFF
• Still many unknowns in the new LCFF
• No more statutory requirement on education funding
 Future state funding is dependent on the economy
 Statutory COLA not necessary correspond to the change in funding
 State determines how much to put toward LCFF each year
• Difficult to evaluate and compare Districts and COEs
 Every COE and District funding will be unique
• Impact of district ADA on COE base funding
 Declining enrollment in some districts
• Number of years to reach the targeted funding
 New Governor in the future
 Changes in the economy
 Proposition 30 Expiration Impact
20

21. Sample District
Best Case Scenario, But Cautions Remain
Funding Per ADA
$9,500
$9,000
$8,500
$8,000
$7,500
$7,000
$6,500
$6,000
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
21

22. Sample District
Best Case Scenario, But Cautions Remain
2010-11
Alum Rock
2012-13
2013-14
2011-12
1
COLA
1.565%
% of Gap Funding2
Gap Funding Increase
RL/LCFF
State
Total Revenue
2.300%
$62,851,189 $61,808,500 $60,838,474 $82,672,040 $89,344,262 $ 97,144,406
42,533,224
$
40,364,200
$
39,1 ,225
21
$25,214,938 $26,343,291 $26,317,394 $ 9,307,342 $ 7,525,166 $ 7,525,166
$88,066,127 $88,151,791 $87,155,868 $91,979,382 $96,869,428 $104,669,572
P-2 ADA4
Funding Per ADA
1.800%
2015-16
11.78%
16.490%
18.690%
$ 3,751,638 $ 5,251,656 $ 5,952,301
$
3
2014-15
12,222.67
$
7,205 $
12,028.66
7,328 $
11,614.53
11,375.11
7,504 $
8,086 $
11,375.11
8,516 $
11,375.11
9,202
Notes:
1 - per School Services of California Dartboard projection
2 - per Department of Finance estimate
3 - 2013-14 State Revenue includes one-time funding for Common Core
4 - ADA & Socio-Economic factor assumed to remain the same in out years
& reflects 2013-14 projection for a $-per-ADA comparison
22

23. Reminder: Areas of Concern with LCFF
• Still many unknowns in the new LCFF
• No more statutory requirement on education funding
 Future state funding is dependent on the economy
 Statutory COLA not necessary correspond to the change in funding
 State determines how much to put toward LCFF each year
• Difficult to evaluate and compare Districts and COEs
 Every COE and District funding will be unique
• Impact of district ADA on COE base funding
 Declining enrollment in some districts
• Number of years to reach the targeted funding
 New Governor in the future
 Changes in the economy
 Proposition 30 Expiration Impact
23

24. Questions?
24