District listens to budget forecasting

RANCHO SANTA FE — At the monthly Rancho Santa Fe School District board meeting, director of finance Bradley Johnson shared with the board some forecasting based on a chart by Capitol Advisors.

According to Johnson, the organization is made up by a group of experts in California who mainly focus on education policy, finance, politics, administrative analysis, and other services.

“What’s great about their organization is they partner with the state of California, all of the local county, and also school districts to discuss impacts as the governor’s budget is released on an annual basis. So in January we get the preliminary budget from the governor, the proposed budget, and then again we get the many revised,” Johnson said. “And with that, Capital Advisors combs through the budget and they present impacts, whether they’re positive or negative associated with how it will affect a school’s budget.”

Johnson wanted the board to know that one of the topics that emerged was the CalSTRS and CalPERS contribution rates; and, raising the rates that both employees and employers pay towards retirement.

Each school board member had a chart to follow as Johnson explained the topic. He shared how the chart represented what the school district would pay on an annual basis.

“And based on some of the assumptions moving forward, in both retirement systems either for teachers or for classified staff and administrators, there’s been lower than forecasted investment returns and also more retirees taking benefits,” he said. Johnson added, “So they are projecting a higher cost on both the CalSTRS and CalPERS, and that will affect how we budget moving forward for the employers’ contribution rates. So we just want to present this to you just to give you an idea of what’s in the forecast.”

Johnson said the percentages would not go up quickly.

“But you can see between now and 2024 CalPERS goes up more than double and CalSTRS goes up just over 60 percent,” he said.

Johnson then noted that while these were based on projections, he would continually stay in touch with Capital Advisors to get the latest information. Board President Todd Frank asked Johnson if he could somewhat confirm if there would be approximately a $100,000 additional staffing each year going forward over the next six years.

“So that six years out, we’ll probably have an additional incremental cost of $600,000 that we need to build into the budget for that year,” Frank said.

Johnson confirmed that was correct.

“So it’s all based on the salaries that are paid out and then any increase of that will be affected by these percentages,” he said.

During the course of the discussion, Superintendent David Jaffe said how the fiduciary management of the school budgets was one of his primary goals and he was happy to have Johnson on board to help with that process.

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