1. Art and Diseño

Resource Alignment Review
Monterey Peninsula Unified School District
Prepared By:
Ann Hern
Jannelle Kubinec
Dr. Barry R. Groves
Maria Phillips
January 2015
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Table of Conttents
Executtive Summ
mary ............................................................................................... 1
Introdu
uction ............................................................................................................ 3
ogy .............................................................................. 3
Approa
ach and Methodol
M
Finding
gs and Recommendations......................................................................... 4
Conditions Affecting Ressource Alig
gnment ............................................................... 6
Expe
enditure Analysis...................................................................................................... 8
C
Comparison
ns to Other Districts .......................................................................................... 10
Prac
ctices to Su
upport Alig
gnment ............................................................................... 13
Siite and Fed
deral Fundin
ng Allocatio
ons .............................................................................. 15
Tiitle I ....................................................................................................................................... 16
Elligibility ................................................................................................................................. 16
D
Distribution
............................................................................................................................ 17
U
Uses
........................................................................................................................................ 18
C
Carryover
.............................................................................................................................. 19
Title II and III .................................................................................................................. 19
Summa
ary of Find
dings ........................................................................................... 19
Recom
mmendatio
ons and Options
O
to
o Consider.................................................. 20
Executive Summary
With respect to its budget and leadership, 2014-15 was a year of many firsts for the Monterey
Peninsula Unified School District (District). The school year began with a new superintendent
and several new cabinet-level staff. This was also the first year the District operated under
California’s Local Control Funding Formula with net growth in funding following several years
of no change or drops in funding. The Board of Education also established the first District
Budget Advisory Committee (DBAC) to advise the District’s leadership regarding strategic
priorities and investments.
The District requested that WestEd provide a review and analysis of its budget and related
systems to address specific DBAC recommendations and provide an assessment and
recommendations for improving how resources are used and aligned to meet current and
emerging goals, objectives, and desired outcomes for students. This review also provides
recommendations that identify opportunities to optimize how resources are aligned to improve
student outcomes and, very importantly, to assist the District in determining whether and how to
best implement recommendations identified in the review. As one of several studies
commissioned by the District, this review considers findings and recommendations included in
the District’s 2014 Curriculum Audit to ensure consistency and coherence.
This report can be used by District leaders and the DBAC to inform changes to the District’s
culture, policies, and processes that take advantage of the state’s increase in funding and
flexibility to address locally determined needs. The District starts with a relatively sound
foundation for budget management, which situates it well to make changes that result in routines
and processes that evidence strategic alignment of resources.
Following are key findings from this review:

The District’s budget assumptions for 2014-15 appear to be reasonable, but there is a
history of the ending fund balance increasing between what is estimated at budget
adoption and what the actual amount is when the District’s fiscal year is closed in
September.

The District has similar expenditure patterns for certificated salaries, materials and
supplies, and contracted services, but the classified and employee benefit expenditures
are higher and teacher salary profiles is lower than expected when compared to districts
in the comparison group.

The District has a budget development system in place, but it appears that financial
performance rather than student performance has been the primary driver.

The District’s 2014-15 LCAP reflects that a significant investment of supplemental and
concentration funds (25%) will be allocated to sites to serve the unique needs of students.
The District has the opportunity and responsibility to build capacity amongst site level
leadership on how to better align site level resources to support improving student
outcome.
1
The report offers the following recommendations:

Develop a clear vision for instruction within Monterey Peninsula Unified School District
to add depth to existing goals and actions. For the District to support resource alignment,
a clear vision for instruction must be present around which goals, initiatives, and actions
can be aligned. As this begins to emerge, deliberate attention should be given to
instituting management practices that reinforce resource alignment.

Use regular Executive Cabinet meetings and time with site administrators to improve
resource planning, adherence with budget procedures, and progress monitoring. The
District may want to consider creating a standing resource alignment item for its
strategically oriented cabinet and site meetings with a clear agenda for the year as to how
this strand of dialogue will contribute to evidence of improved practice.

Revise or eliminate the eight period day. The District’s curriculum audit identified
concerns regarding the effectiveness of the eight period day, which merit consideration.
The District should consider the cost-effectiveness of this approach as it assesses how it
aligns resources to strategic priorities.
Complete a more in-depth study of the Special Education Program to identify practices
that contribute to unpredictable costs and overall costs of the program, and those that
impair or contribute to program quality.


Improvement alignment of classified staff to District priorities and needs. As the District
increases its investments in positions it should carefully current classified staffing levels
and structures to ensure that existing and new positions are in alignment with the
District’s strategic objectives.

Transition the work of the District Budget Advisory Committee to support LCFF and
LCAP planning.
2
Introduction
With respect to its budget and leadership, 2014-15 was a year of many firsts for the Monterey
Peninsula Unified School District (District). The school year began with a new superintendent
and several new cabinet-level staff. This was also the first year the District operated under
California’s Local Control Funding Formula with net growth in funding following several years
of no change or drops in funding. The Board of Education also established the first District
Budget Advisory Committee (DBAC) to advise the District’s leadership regarding strategic
priorities and investments. The DBAC made several recommendations including:
 Recommendation A: Study spending compared to similar sized districts with similar
English Learner populations.
 Recommendation B: Analyze Unrestricted Expenses for MPUSD for three years and
comparable districts, 2011-12, for specific observations.
 Recommendation C: Implement a zero-based budget process as soon as possible for the
2015-16 school year.
 Recommendation D: Consider programs and positions on the Priority List in the stated
order of importance when budgeting decisions are made.
The District requested that WestEd provide a review and analysis of its budget and related
systems to address specific DBAC recommendations and provide an assessment and
recommendations for improving how resources are used and aligned to meet current and
emerging goals, objectives, and desired outcomes for students. This review also provides
recommendations that identify opportunities to optimize how resources are aligned to improve
student outcomes and, very importantly, to assist the District in determining whether and how to
best implement recommendations identified in the review. As one of several studies
commissioned by the District, this review considers findings and recommendations included in
the District’s 2014 Curriculum Audit to ensure consistency and coherence.
This report can be used by District leaders and the DBAC to inform changes to the District’s
culture, policies, and processes that take advantage of the state’s increase in funding and
flexibility to address locally determined needs. The District starts with a relatively sound
foundation for budget management, which situates it well to make changes that result in routines
and processes that evidence strategic alignment of resources.
Approach and Methodology
This review focused on how the District allocates its resources to support its vision for providing
high quality instruction and student support. Effective resource alignment ensures that resources
are directed to support indentified needs through quality programs, services, and actions that are
focused on District goals and priorities.
An important function of this review is to provide the District’s superintendent and leadership
with a strategic analysis of budget information and context to address improvements in resource
3
alignment. The review includes consideration of how the District’s current allocation
plans/formulas, policies, procedures, and structures impact the alignment, availability,
effectiveness, and efficiency of resources.
Information and feedback was gathered through interviews with the superintendent, cabinet
members, and site leaders. In addition, policies and procedures, as well as fiscal and program
data available from the District and the California Department of Education (CDE), were
reviewed. This report includes references to comparison districts, which were selected based on
their similarities in size, grade levels served, percentage of English learners and academic
performance. Figure 1 provides an overview of the selected comparison districts.
Figure 1: Comparison Districts
District Name
Azusa Unified
Kings Canyon
Joint Unified
Lompoc Unified
Woodland Joint
Unified
Los Banos Unified
San Jacinto
Unified
Monterey
Peninsula Unified
Pittsburg Unified
9,566
%
English
Learners
32.0%
% Free/
Reduced
Meals
84.9%
96.2%
Academic
Performance
Index (API)
736
% Schools
Meeting
API Target
5.9%
9,879
33.1%
80.0%
89.7%
783
30.0%
9,914
23.1%
64.8%
73.2%
772
18.8%
9,991
27.7%
68.5%
75.1%
767
35.7%
10,065
30.3%
74.6%
84.8%
762
16.7%
10,301
22.6%
77.9%
82.6%
754
35.7%
10,768
30.5%
62.9%
77.9%
763
25.0%
10,769
33.2%
84.3%
94.1%
738
33.3%
Enrollment
%
Minority
Note: All data is from EdData. Enrollment and demographic data is from 2013-14, and academic performance data is
from 2012-13.1 Enrollment includes charter school enrollment.
Findings and Recommendations
As noted earlier, the District has commissioned several studies to inform strategic planning and
improvement. Among these studies is a curriculum audit, which included a review of budget
practices. This review and report complement the curriculum audit by focusing on how the
District can align human and financial resources to support and evidence its goals and vision.
Aligning resources includes using strategic planning methods to optimize the impact of
allocation plans. Creating sustainable allocation plans includes establishing operational policies
and procedures to support the plan. Effective resource alignment ensures that resources are
directed to support indentified needs through quality programs, services, and actions focused on
District goals and priorities.
1
2012-13 is the most recent year for which statewide data are available. While funding levels have increased since
this time because the comparison districts share similar demographics such increases remain somewhat comparable
and support the relevant use of this comparison group for the purposes of this report.
4
Following are findings included in the curriculum audit that have bearing on resource alignment
and which have been substantiated in this review:

Information provided consistently pointed to a process that represents traditional, prioryear rollover budget planning with minimal guidelines for prioritization of requests and
needs-driven modification in response to data and program planning.

The practice of continually revising allocations during the operational year was found to
be detrimental to the stability in planning for educational programming.

It is challenging to identify the costs for a specific program to inform assessment of
impact and future planning.

The District has had substantial variances in the amount it estimated in initial budgets
when compared to actual revenues and expenditures.
The curriculum audit includes several criticisms of the level of precision and clarity of the
District’s budget documents. While we agree that the District’s budget documents can be
difficult to interpret and are subject to many cycles of revision, state requirements and structures
for financial reporting contribute to the identified challenge. The curriculum audit identified six
components of a curriculum-driven budget. In all but one area, priority setting based on input
from district stakeholders, the District was deemed inadequate. Following are the five areas
deemed inadequate:

Tangible, demonstrated connections are evident between assessment of operational
curriculum effectiveness and allocation of resources.

Each budget request or submittal shall be described so as to permit evaluation of
consequences of funding or non-funding in terms of performance or results of a given
activity or program.

Rank ordering of program components provided to permit flexibility in budget expansion,
reduction, or stabilization based on changing needs or priorities.

Cost benefits of components in curriculum programming are delineated in budget
decision-making.

Budget requests compete for funding based upon evaluation of criticality of need and
relationship to achievement of curriculum effectiveness based upon concrete and valid
data related to organizational quality.
The curriculum audit reflects standards for performance aligned to exceptional practice. For the
District to improve as the curriculum audit suggests, it must make incremental improvements in
several areas including culture and leadership, structure and staffing, and overall procedures that
support effectiveness and efficiency. In an effort to complement, and advance the findings from
the curriculum audit, the findings are organized into the following sections:

Conditions Affecting Resource Alignment. This section addresses factors such as budget
and financial practices that may serve as constraints or facilitating factors to attend to
resource alignment.
5

Expenditure Analysis. Understanding of current expenditures provides insights regarding
areas of current alignment and opportunities for improved resource alignment as well as
potential practices that may facilitate improvements.

Practices to Support Alignment. This section describes current practices and how they
can be transformed to make tangible improvements in the alignment of resources to goals
and objectives for student outcomes.
The findings and recommendations offered in this report are intended to serve as a resource to
the District superintendent and leadership team as they work to build a district culture focused on
student-level outcomes, a structure and staffing that aligns to this vision, and procedures and
policies that ensure that work efforts are efficient and effective.
Conditions Affecting Resource Alignment
Local educational agencies faced the most challenging financial period of the past 50 years
during 2008-13. Local educational agencies made budget reductions and relied on reserves (i.e.,
funding accrued from prior years) to accommodate the over 15 percent statewide reduction in
funding. This period highlighted the importance of accurate budgeting and sound financial
practices. There was little room for surprises or faulty adjustments.
During the current transition from a period of decline in funding to one with much needed
recovery and improvements, budget assumptions are critical to effective and efficient district
management. Examples of key assumptions in a school district budget include, but are not
limited to, the number of students (student counts are the primary driver of revenue), state
funding levels, and compensation (both the numbers of employees and salary and benefit costs).
When school districts adopt their budget, some assumptions are derived from known facts, such
as the level of funding from the state. Others, such as student enrollment, are estimated based on
prior trends and forecasting data. Budgets are created at the beginning of the fiscal year and are
updated periodically throughout the year.
To assess the District’s budget and financial management practices, we reviewed budget and
financial information for the District’s General Fund for the fiscal years 2012-13, 2013-14, and
the 2014-15 budget adoption. Below are the findings from this review:

The unrestricted ending fund balance for 2012-13 decreased by approximately $4.7
million from the 2012-13 estimated actuals to the actuals as reflected in the 2013-14
adopted budget. It appears that most of the variation can be attributed to underestimating
revenue and overestimating local contributions to restricted resources. Improvements
were noted in the estimation of the unrestricted ending funding for 2013-14, with the
difference from the estimated actuals to the actuals at approximately $1.4 million.

The budget for unrestricted and restricted General Fund salary expenditures shifted
significantly over the course of the 2013-14 budget from adoption to actuals. This is
likely due in part to the implementation of the Local Control Finding Formula and the
stipulated judgment agreement paid to Monterey Bay Teachers Association members.
6

The 2014-15 budget includes a significant increase, more than $3.2 million in local
contributions. Such contributions are made from the unrestricted general fund to
supplement specialized programs (i.e., special education, adult education).

The District uses state revenue assumptions commonly used by local educational
agencies. The District’s 2014-15 budget reflects such assumptions for state revenue with
federal and local revenue estimated based on historical trends and grant/entitlement
information. The District uses staffing allocations for certificated positions and for
essential classified positions. The above mentioned practices conform with generally
accepted and recommended practices.
As noted above, state revenues for education are increasing after several years of decline. Modest
increases were provided in 2013-14 and 2014-15. Furthermore, the District projects continued
increase in its forecast for 2015-16 and 2016-17, which appear reasonable considering the
Governor’s 2015-16 proposed budget.
While statewide funding is increasing, positively affecting the District’s financial outlook, most
funding provided to local education agencies is linked to student enrollment. Countering the
overall growth in District revenues is a longstanding trend since 1994 of declining student
enrollment. While the state provides a one-year reprieve from the negative effect that declining
enrollment has on revenue, it does not provide any buffer for the many fixed costs that do not
decrease in direct proportion to the loss of revenue. For instance, a decline of 60 students across
a district will not reduce the need for facilities or operational costs, which creates a strain on
remaining resources.
Furthermore, the District has a history of deficit spending in the unrestricted General Fund and
the current budget and multi-year projection reflect that this trend will continue. There is likely
the opportunity to revise special education expenditure budgets, which will result in some
reduction in total expenses for the program (see Expenditure Analysis section for more details).
Similarly, the budget shows projects deficit spending from the restricted General Fund in 201415 and 2015-16. The 2014-15 restricted General Fund deficit appears to be due to planned
spending of carryover balances such as Medi-cal and Common Core State Standards funding.
This is consistent with state rules regarding the use of these funds. However, it important to note
that carryover funds are one-time dollars and the sustainability of efforts funded with carryover
funds need to be considered.
As the District emerges from the prolonged period of fiscal downturn, now is the ideal time to
evaluate policies and practices related to budget and financial management. It should be
remembered that policies and practices utilized to successfully manage through fiscal challenge
are not necessarily equally productive during fiscal growth. There are also several unique factors
that the District must account for as it considers how to approach new resources. This includes
declining or slow growth in enrollment, continued reliance on reserves to fully balance budgets,
and notable fluctuations between budget and actuals.
7
Expenditure Analysis
The District’s 2014-15 combined General Fund budget includes more than $95.3 million in
expenditures, or approximately $8,860 per pupil. The salaries and benefits account for $82.3
million, or more than 86 percent of the budget. On a programmatic basis, the District’s 2014-15
budget for the special education program accounts for more than $22.3 million, or 23 percent of
the budget, which is above the statewide average of approximately 20 percent. The 2014-15
adopted budget projects that more than $11.4 million will be contributed from the unrestricted
General Fund to fully fund the special education program, which is a significant increase over
the prior year’s contribution of $8.6 million. As of this review, the special education program
budget (Resource 6500) appears to have approximately $1.2 million in unencumbered (i.e.,
potentially over-budgeted) salary and benefit expenses, materials and supplies, and contracted
services budgets also appear to be over-budgeted. In most districts, special education programs
can be challenging to budget for, but the level of unencumbered funds suggests that practices
could be changed that would improve the accuracy of the budgeting process. In addition, changes
in practices could allow for better communication about the impact of decisions on resource use
within special education.
A more in-depth analysis of the largest expenditure area, salary and benefits, was completed to
address recommendations provided by the DBAC and to provide an assessment of how staffing
and other allocation policies affect resource alignment. The salary and benefit analysis is
completed for certificated and classified for the most recently completed fiscal year, 2013-14,
plus two prior years to aid in identifying trends.
On the natural, salary and benefit costs grow year-over-year as a result of longevity (i.e., length
of service, step increases, and salary schedule improvements). However, the period of funding
decline resulted in disruptions to normal trends as districts around the state reduced the quantity
of staff and also, in many cases, sought concessions to reduce overall compensation. Figure 2
below provides an overview of certificated and classified salary and benefits from 2011-12 to
2014-15. The amounts for 2011-12 through 2013-14 reflect unaudited actual, whereas 2014-15 is
from the 2014-15 preliminary budget. It appears from the data that compensation drops in 201415, but this is because the 2013-14 expenditure amount includes an extraordinary payment based
on a stipulated agreement between the District and its certificated collective bargaining unit.
Figure 2: Unrestricted and Restricted General Fund Compensation,
2011-12 through 2014-15 (dollars in millions)
Year
2011-12
2012-13
2013-14
2014-15 (est.)
Certificated
Classified
Benefits
Total
Compensation
$41.3
$41.2
$47.2
$42.4
$17.0
$17.8
$18.4
$18.5
$21.3
$21.2
$21.7
$21.5
$79.6
$80.2
$87.3
$82.4
Source: District Adopted Budgets, 2011-12 through 2014-15
As shown in Figure 2, there was negligible change in compensation expenditures from 2011-12
to 2012-13, with noted recovery and increases in 2013-14. While increases to compensation were
8
provided, a significant amount of the increase is accounted for in growth restoration of positions,
both classified and certificated. During this period there were also shifts in the amount of
unrestricted and restricted (i.e., categorical) funded positions. It is important to note that the
implementation of the LCFF in 2013-14 has impacted how districts in California receive funding
(most state categorical programs were eliminated and the majority of state funds are
unrestricted).
Notwithstanding the extraordinary payment made in 2013-14, expenditures for certificated staff
have followed expected patterns for natural salary and benefit cost growth. By comparison, there
were notable increases in the overall amount spent on classified staff, especially within the
unrestricted General Fund. Figure 3 shows by types of classified staff the change in expenditures
from 2011-12 to 2013-14.
Figure 3: Unrestricted General Fund Classified Employee Salary Expenditures
2011-12 through 2013-14
Year
2011-12
2012-13
2013-14
Classified
Instructional
Salaries
Classified
Support
Salaries
$116,251
$128,846
$245,497
$2,461,173
$2,973,089
$4,260,875
Classified
Supervisor
and
Administrator
Salaries
$772,318
$1,018,734
$1,114,231
Clerical,
Other
Total
Technical, Classified
and Office
Salaries
Staff
Salaries
$3,013,189
$507,064 $6,869,995
$3,340,779
$781,147 $8,242,595
$3,899,017 $1,014,666 $10,534,286
Source: District Budget Sources
Some expenditure categories such as classified instructional salaries and other classified have
more than doubled during this time period. While there was a significant increase in classified
support salaries, the increase is largely explained by shifting classified salaries that were
previously charged to restricted resources such as economic impact aid and home to school
transportation to the unrestricted General Fund.
Similar analysis was performed on the employee benefit expenditures and the year-over-year
increase from 2011-12 to the present. The changes appear to be reasonable for most of the
categories, and the District’s higher rate of expenditures for employee benefits appears to be an
historical trend. Keeping in mind the shift to LCFF in 2013-14, some of the increase is also
likely due to shifting restricted General Fund expenditures resources to the unrestricted General
Fund. It is important to note that while it appears that expenditures for the Public Employees
Retirement System (PERS) have experienced increases this is balanced by the
reduction/elimination of the expenditure for PERS Reduction. The rate of expenditures for other
benefits has decreased and could be attributed to changes in retirement incentive payments.
Our review notes that the classified and certificated collective bargaining agreements include
language that provides for retiree health benefits. While there are some variations between the
two agreements, retirement benefits can start as early as 55 years of age and continue on to age
65 or Medicare eligibility age (whichever comes first) and contain provisions to cover a
percentage of cost increases. According to a 2012 survey by the California State Teacher
9
Retirement System, approximately 69 percent of employers provided some form of insurance
premium support to retirees that are not yet eligible for Medicare.2 While not an uncommon
practice, it can represent a considerable cost to districts to provide this type of benefit, which is
often not considered when evaluating comparability in compensation between districts.
Additionally, the rate of expenditures for worker’s compensation appears to be higher than
expected, but this could be due to the manner in which the District secures its insurance (i.e., self
insurance; relation to a higher than average rate of workers compensation claims or settlements).
Comparisons to Other Districts
The DBAC recommended comparisons in expenditure analysis with other districts with similar
student demographics. Statewide data that compares expenditures is available through the 201213 school year. While this does not reflect recent increases, it does provide a basis for
comparison as it can be assumed that given the demographic similarities between districts that
they have seen comparable growth in funding since 2012-13.
As noted earlier, compensation expenses account for the largest share of a district’s expenditures.
As shown in Figure 4A and 4B, when compared to others in the comparison group, the District
ranks the lowest among the comparison districts for certificated expenditures and the highest for
classified salaries as a percentage of total expenditures. The District also ranks among the
highest in terms of per pupil spending for certificated and classified salaries and benefits, which
results in part from the addition of a period for all students grade 6 through 12 and provision of
other post-employment retirement benefits. The District estimates that this results in an
additional 22 full-time equivalent staff at an expense of $2.2 million.
Figure 4A: General Fund Expenditures per ADA
by Type of Expenditure (Salaries and Benefits), 2012-13
Cert.
Salaries
% of
exp
Classified
Salaries
% of
exp
Employee
Benefits
% of
exp
Los Banos Unified
Woodland Joint Unified
$3,501
47.7%
$1,172
16.0%
$1,772
24.1%
$3,912
51.4%
$1,342
17.7%
$1,201
15.8%
Lompoc Unified
San Jacinto Unified
Comparison District Average
$3,964
$3,713
51.6%
48.0%
$1,380
$1,143
18.0%
14. 8%
$1,474
$1,506
19.2%
19.5%
$3,997
48.2%
$1,361
16.4%
$1,651
19.9%
Pittsburg Unified
Kings Canyon Joint Unified
$3,917
46.3%
$1,225
14.5%
$1,767
20.9%
$4,065
47.5%
$1,287
15.0%
$1,736
20.3%
Azusa Unified
Monterey Peninsula Unified
$4,531
51.1%
$1,445
16.3%
$1,499
16.9%
$4,374
43.3%
$1,896
18. 8%
$2,255
22.3%
District Name
Source: EdData 2012-13
2CalSTRSEmployeeHealthBenefitStudy2012.Retrievedfrom
http://www.calstrs.com/sites/main/files/file‐attachments/employer_health_benefits_study_2012.pdf
10
Figure 4B: General Fund Expenditures per ADA by
Type of Expenditure (Books and Supplies, Services and Other Expenses), 2012-13
Books and
Supplies
% of
exp
Services
and Other
Expenses
% of
exp
Total
Expense*
Los Banos Unified
Woodland Joint Unified
Lompoc Unified
San Jacinto Unified
Comparison District Average
Pittsburg Unified
Kings Canyon Joint Unified
$341
$290
$257
$362
$267
$361
4.6%
3.8%
3.3%
4.7%
3.2%
4.3%
$560
$859
$613
$1,011
$919
$1,195
7.6%
11.3%
8.0%
13.1%
11.1%
14.1%
$7,346
$7,604
$7,687
$7,735
$8,296
$8,465
$550
6.4%
$921
10.8%
$8,559
Azusa Unified
Monterey Peninsula Unified
$293
$479
3.3%
4.7%
$1,104
$1,091
12.4%
10.8%
$8,873
$10,096
District Name
Source: EdData 2012-13
As shown in Figures 5 and 6, teacher salary profiles based on information from the CDE’s 201213 J-90 (most current year available) reflect that the District’s lowest and average salaries for
teachers are the lowest across the comparison districts, however, the District’s highest salary is
ranked second among the comparison districts. Furthermore, when comparing salary profiles in
Monterey County, the District ranks 11 out of 18 for both the lowest and average salary, and 9
out of 18 for the highest salary. It is important to note that the District’s salary schedules do not
account for the additional compensation provided to middle school and high school teachers for
the additional 8th period. Furthermore, as noted earlier the District provided post-employment
retiree health benefits, which increase benefit costs, but do not appear on the salary comparisons.
Figure 5: 2012-13 Teacher Salary-Comparison Districts
District
Total Salary
Schedule FTE
Lowest
Salary
Average
Salary
Highest
Salary
San Jacinto Unified
Los Banos Unified
Lompoc Unified
Kings Canyon Unified
Azusa Unified
Pittsburg Unified
Woodland Unified
Monterey Peninsula Unified
358.50
405.00
428.68
451.55
471.72
504.90
507.41
530.17
$42,433
$38,907
$40,034
$38,672
$45,017
$41,429
$40,134
$38,200
$68,868
$63,331
$63,948
$63,621
$71,930
$60,839
$61,900
$57,950
$86,187
$82,033
$79,240
$82,268
$81,588
$76,884
$76,742
$84,034
Source California Department of Education 2012-13 J -90
11
Figure 6: 2012-13 Teacher Salary-Monterey County Districts*
District
Total Salary
Schedule FTE
Lowest
Salary
Average
Salary
Highest
Salary
Graves Elementary
San Lucas Union Elementary
Mission Union Elementary
San Antonio Union Elementary
Spreckles Union Elementary
Washington Union Elementary
South Monterey Joint Union High
Gonzales Unified
Pacific Grove Unified
King City Union Elementary
Greenfield Union Elementary
Carmel Unified
North Monterey Unified
Soledad Unified
Alisal Union School District
Salinas City Elementary
Monterey Peninsula Unified
Salinas Union High
2.50
5.00
7.90
10.00
41.85
45.00
76.00
111.60
114.10
146.00
151.00
160.00
214.00
225.00
307.00
373.71
530.17
659.32
34,291
35,874
43,400
37,896
39,448
41,583
33,231
41,214
42,300
34,303
36,000
52,167
39,807
42,047
37,743
40,110
38,200
38,933
52,295
45,040
53,544
50,746
52,273
60,893
74,902
62,837
78,457
56,349
54,320
89,303
61,377
63,059
64,853
64,012
57,950
69,356
64,297
69,174
69,500
64,949
78,101
74,410
102,188
88,046
98,168
81,059
84,679
107,138
83,485
90,568
84,569
80,067
84,034
91,524
* Data excluded for non-reporting districts – Big Sur Unified, Bradley Union, Chualar Union, Lagunita, San Ardo Union,
and Santa Rita Union.
Source California Department of Education 2012-13 J -90
As noted earlier, the District’s expenditures for employee benefits is above most districts in the
comparison group. There are many components to a district’s benefit expenses. Figure 7 shows a
breakdown for the District and comparison group of the various benefit expenses by type. As
shown, the District’s Post-Employment Benefits are a factor of two to three times that of most
districts in the comparison group when compared based on amount per student.
12
Figure 7: 2012-13 Unrestricted General Fund Employee Benefit Expenditures Per ADA
District
State
Teachers
Retirement
System
Public
Employees'
Retirement
System
OASDI/
Medicare/
Alternative
Health &
Welfare
Benefits
State Unemployment
Insurance
Workers'
Comp.
Insurance
$4
$74
$86
$267
$46
$56
$239
$80
$96
$75
$42
$226
$87
$98
$440
$263
$95
$111
San Jacinto
Unified
Azusa Unified
$238
$116
$290
Kings Canyon
Joint Unified
Pittsburg Unified
Monterey
Peninsula
Unified
Woodland Joint
Unified
Los Banos
Unified
Comparison
District Average
Lompoc Unified
PostEmployment
Benefits
PERS
Reduction
Other
Benefits
Total
$42
$6
$33
$615
$41
$47
$5
$0
$624
$44
$102
$62
$7
$24
$477
$46
$57
$58
$8
$7
$88
$414
$44
$109
$55
$4
$66
$83
$103
$397
$45
$136
$30
$7
$47
$254
$76
$94
$663
$42
$73
$79
$7
$0
$253
$76
$94
$660
$47
$142
$45
$5
$0
$263
$94
$110
$566
$43
$199
$139
$13
$37
$1,0
89
$1,1
22
$1,1
36
$1,1
38
$1,2
88
$1,3
22
$1,4
65
Source ; EdData
Practices to Support Alignment
Budgeting has been part of education since the first public investments were made to educate
students. Many people think of budgets as pages filled with numbers, and while they can take
that form, a budget is much more than numbers. Good budgets begin with an understanding of
needs and then show how the available resources can be deployed to address identified needs.
Budgets developed with this approach can tell the story of how all available resources support
desired student outcomes.
The implementation of LCFF calls for local education agencies to make a mindset shift when
creating their budgets. Budgets need to migrate from the past practice of largely reflecting inputs,
reinforced by how the state provided funding, to a performance-based approach reflecting
outcomes and outputs. Figure 8 provides an overview of many of the major shifts underway
throughout California as districts move from focusing on compliance requirements to being
performance focused.
13
Figure 8: Overview of Performance Focused Shifts
Responsibility for the Plan
Stakeholder Involvement
Approach to the Money
Time
Measure of success/results
Orientation
Scope and Approach
COMPLIANCE
Lowest level staff write and
complete the Plan
Invite and inform required
stakeholders
Submit a rollover budget
Episodic, aligned to required
timelines
Compliant plan, signed off by
the approving entity
Equity
Communication
Extra work
Components/silos (program,
resource, req. office)
Equal funding
Rules and regulations
Data
NCLB disaggregation
PERFORMANCE
Leadership function with
Superintendent buy-In
Seek critical stakeholder input (know who needs to be
involved)
Resources are aligned to goals
Ongoing, continuous
improvement cycle
Plan implemented that
positively impacts student
outcomes
Is the work
System
Equal outcomes
Capacity development (basic
understanding of the
relationship to the whole)
Deeper analysis that is locally
meaningful
Source: WestEd
Under LCFF, student needs should drive spending decisions rather than grant requirements and
specific programs. While local educational agencies are expected to meet various state priorities
associated with LCFF, it is up to each district to specify how they will meet these metrics, what
measurements they will use, and how resources will be allocated to support goals, actions, and
services. In other words, the shift in state policy under LCFF is very compatible with the
District’s objective to make improvement in how it aligns resources.
The District’s LCAP has five overarching goals that are based on identified student needs. The
goals include:

All students, including all subgroups, will make academic progress in the core academic
areas of Mathematics, English/Language Arts, Science, Social Science, and Visual and
Performing Arts. Monterey Peninsula Unified School District (MPUSD) students will
meet or exceed state averages when state Smarter Balanced test scores are available in
2015.

All students and all subgroups will engage their individual learning styles and interests to
acquire 21st century skills and passion for continuous learning as they pursue higher
education or career technical pathways, technological infrastructure and support will be
developed to meet the needs of students.

By year three of LCAP all teachers in MPUSD will meet the federal standard for highly
qualified teachers (HQT), and opportunities for high quality professional development.
14
MPUSD will recruit and retain HQT teachers.

All students, including all subgroups, will have equal access to a broad course of study,
including but not limited to Advanced Placement classes, visual and performing arts, and
Common Core aligned core academic instruction.

All students, including all subgroups, will be provided a safe and healthy environment to
achieve social, emotional, academic success.
The District’s LCAP also contains a variety of actions, services, and resources as well as
expected outcomes to support the goals identified above. A critical step in the implementation of
LCFF is the Annual Update. Each year the District will complete an Annual Update and will
measure the progress toward expected outcomes against actual outcomes and perform an
assessment of effectiveness of specific actions and services. Based on this information, the
District will determine if any changes in goals, actions, or services or allocation of resources are
needed to achieve expected outcomes.
The District has included a curriculum audit as an action to support Goal 4 of its LCAP for 201415. This information will be a valuable resource as the District works on its Annual Update to
determine if programs, actions, and services are aligned to needs and goals and services/actions
are creating improved opportunities, outcomes, and outputs for all students.
If it is determined that changes are needed, it will be critical to identify and prioritize
new/different/improved actions or services that will be responsive to achieving the goals. When
prioritizing actions and services, questions that are helpful to the process include, “Will
implementing this activity directly address improving student outcomes? Does this activity
address the most critical needs of our students or which group of students will this activity
impact?” After new actions/services have been determined, the budget will need to be adjusted
to provide allocations to support the changes.
The District has a longstanding practice of allocating resources to its school sites. As the District
works to align resources, it should not only revisit the underlying formulas to make allocations,
but also refine guidance and support for sites to maximize the use of resources. Following is
background and analysis that may help the District assess its existing allocation practices.
Site and Federal Funding Allocations
There are two parts to any school district budget. The unrestricted General Fund comprises
nearly 85 percent of the District’s General Fund. Most of this revenue goes towards paying
operational costs, including teacher and administrator salaries. The other type of funding is
restricted, or categorical funding. This includes federal programs, such as Title I, Title II, and
Migrant Education. Since the implementation of LCFF, there are just a handful of state
categorical programs left such as special education and restricted lottery.
The District shared that there are several restricted funding sources that they no longer receive
such as California Clean Energy Job Act and Federal Character Education, and it appears that the
revenue and expenditure budgets reflect the discontinuation of funding. Additionally, District
15
documentation for restricted resources reflects that there were no carryover funds for Economic
Impact Aid at the close of the 2013-14 fiscal year.
Title I
Title I, Part A, was initially funded in 1965 as part of the Elementary and Secondary Education
Act (ESEA). Over the years, ESEA has been reauthorized by Congress, most recently as the
2001 No Child Left Behind Act. The purpose of Title I is to provide additional support to
supplemental core or base educational programs targeted at low-income and low-performing
pupils.
The amount of Title I funds provided to local educational agencies (LEA) is determined based on
the numbers of low-income pupils in the area of residence of the LEA. In recent years, the
amount of Title I funding provided to LEAs can vary from year to year due to reductions in
funding for the program by Congress, increases in state and local set asides for charter schools
and other designated purposes, and fluctuations in counts of low-income pupils.
There are several areas to consider when optimizing Title I funds.

Eligibility—The process and selection of schools to provide funding to based on meeting
ranking and selection criteria

Distribution—The amount of funds allocated to district-directed initiatives and school
site discretion

Uses—The manner in which funds are used against fiscal management standards
Eligibility
Any school that is at or above the districtwide rate of poverty and/or exceeds 35 percent poverty
is eligible to receive Title I funding. An LEA may determine “poverty” levels based on a variety
of data, but the most commonly used data are free and reduced-priced meal counts. Generally,
each LEA lists schools, in rank order (high to low), by the percent of students enrolled who are
deemed low-income based on student eligibility for free and reduced-priced meals. Based on this
ranking, schools are selected for funding. It is not necessary that all schools that are above the
districtwide average poverty level or 35 percent poverty be provided with Title I funding, but it
is necessary that schools with higher poverty rates be funded before those with relatively lower
poverty rates. There are a few areas of discretion allowed for LEAs when making selection
decisions including:

Alternative Data—In addition to free and reduced-priced meal eligibility data, other data
that may be used for rankings includes Census data, Temporary Assistance for Needy
Families (TANF) eligibility, Medicaid eligibility, or some composite of these data
sources.

Rankings Districtwide or Grade Span—Any school above 75% poverty must receive
first priority for funding, but once such schools are funded, LEAs may decide to rank
based on districtwide listing of schools or grade span. If grade span is selected, it is
possible to include a subset of schools (e.g., elementary only and no high schools).
16

Skipping—An otherwise eligible school may be skipped if the district can demonstrate
that a comparable amount of state or local funds provided in lieu of Title I (e.g., Quality
Education Investment Act (QEIA) funding for selected school sites could be argued to
meet this criteria, or alternative education programs that receive Pupil Retention and
Community Day School support).

Feeder School Data—Poverty data from feeder schools may be used to calculate the
poverty rate of a high school. The purpose of this option is to offset underreporting of
free and reduced priced meal eligibility that tends to occur at high schools because
students prefer to remain unidentified.

Grandfathering—If a school drops out of eligibility for a one year period based on its
poverty counts, it may continue to receive funding.
Of the District’s 20 schools in 2013-14, ten were considered eligible based on the District’s
criteria to receive Title I funds. However, 12 schools did not receive funding in 2013-14 because
among the potentially eligible schools, two were skipped because they were provided other state
or local funds.
Distribution
Title I laws and regulations call for each LEA to determine how to allocate funding to meet
required set-asides, district administrative requirements, district-directed needs/initiatives, and
site level support. The distribution of Title I funds may only be to Title I-eligible sites and
generally targeted to Title I-eligible students3. There are a number of required and optional setasides that are to be made from Title I funds “off the top,” or before determining the amount
allocated to eligible school sites. The following depicts these set-asides.
3
Title I-eligible students include any student who is low-income or low-performing. By default, when a school
receives Title I funds, it is considered for uses that are “Targeted Assistance,” which means limited to compensatory
support for eligible students alone. Any school with at least 40 percent of its student population eligible based on
poverty data may elect to be a “schoolwide” Title I school provided that the local site council elects to be in
schoolwide status and CDE is notified through the Consolidated Application process. Schoolwide schools receive
the flexibility to direct Title I resources to the schoolwide strategies that may benefit any student, provided the use
offers supplemental support.
17
Category
Administration, including indirect costs
Highly qualified teachers
Professional development, for school or LEA
in program improvement
Supplemental education services, LEAs with
one or more schools in program improvement
Parent involvement
Homeless
Teacher incentives
Set-Aside
15%
5%
10%
Up to 20%
At least 1%
LEAs need to reserve the amount equal or
comparable to those provided to
Title I schools for (1) homeless children who
do not attend Title I schools and (2) children in
local institutions for neglected children
Up to 5%
In addition to the set-asides listed above, LEAs are permitted to direct Title I resources to
centralized services, such as preschool, summer school, school improvement, and coordinated
services. Funds may also be reserved for district-directed services, provided that the activities are
allowed under Title I. In other words, services are supplemental, address the needs of Title Ieligible students and are aligned to goals and services included in the LCAP. LEAs should
ensure that such uses are identified within the LEA’s Local Education Agency Plan (LEAP) and
school site Single Plans for Student Achievement (SPSA). Additionally, LEAs should consider
including Title I resource information in their LCAPs to provide transparency on the continuum
of services and actions for students.
Funds that that remain after allocation for set-asides are for site direction and inclusion in SPSAs
to all eligible schools. There are several specific rules that may apply when determining the sitelevel allocations that include priority for high poverty schools, concentrated funding for high
poverty schools, differential amounts and inclusion of private schools.
The District’s allocation formula includes set-asides for supplemental educational services,
parent involvement, homeless, and administration are taken before all other allocations are made.
Once the set-asides are made, the District divides remaining funds by a formula that provides a
set amount per low-income student per eligible site. Carryover funds are retained by each site up
to District defined threshold, after which the carryover is centralized.
Uses
The District’s documentation regarding its allocation plan indicates that there are centralized
services included within the allocation plan and it appears that the services are likely direct
services. Site expenditure documentation reflects that expenditures are heavily weighted towards
employee compensation. There is little differentiation between site expenditure patterns; the
majority of sites appear to have both teacher and a combination of classified support.
18
Carryover
No more than 15 percent of Title I funds may be carried over in any given grant award period.
The calculation of carryover is based on expenditures at the end of June 30 of the fiscal year, but
also may be counted through September 30 if by June 30 the 15 percent limit is exceeded. Since
most LEAs allocate the vast majority of Title I funds to sites, often when there are issues with
carryover, they are due to site administrators not fully understanding the rules and requirements
related to Title I.
Based on data provided by the District, carryover balances for 2013-14 for the majority of the
sites were under well under the 15 percent limit, however, there were two sites that had carryover
balances of more than 40 percent of their allocation. The District’s overall carryover appears to
be within the 15 percent limit when considering the September 30 cutoff.
Title II and Title III
The purpose of Title II, Part A is to increase the academic achievement of all students by helping
schools and LEAs ensure that all teachers are highly qualified as well as improve teacher and
principal quality through professional development. This resource can also be used to reduce
class sizes. District documentation reflects that there is a significant investment in certificated
administrators and other certificated employees with approximately 63 percent of 2013-14
expenditures directed towards these categories.
The purpose of Title III is to support English language learner students acquire English and
achieve grade-level and graduation standards. This resource can be used to support a number of
services and actions such as English language development instruction, high quality professional
development, community participation in programs, and coordinating language instruction
programs with other programs, e.g. Title I and Migrant Education. District documentation
reflects that this resource is not as heavily invested in staff, however, there appear to be a trend
of adopting budgets that are not reflective of actual expenditures. For instance, in both 2012-13
and 2013-14 when the budget was adopted, there was a significant amount of funds budgeted for
professional services which were subsequently re-allocated to other budget categories
throughout the year, which maybe an indication that there isn’t an aligned plan in place.
While there are no carryover limitations for Title II or Title III, funds need to be expended within
the grant award period. There are fluctuations in carryover amounts for both resources on a yearover-year basis that are related to planned expenditures, which do not materialize as planned
initially.
Summary of Findings

The District has a history of deficit spending in the unrestricted General Fund and the
current budget and multi-year projection reflect that this trend will continue, but there
appears to be an opportunity to reduce the projected deficit by revising special education
expenditure budgets. Additionally, there is a projected deficit for the restricted General
Fund deficit that appears to be related to expending carryover balances for Common Core
State Standards and mental health services.
19

The District’s budget assumptions for 2014-15 appear to be reasonable, but there is a
history of the ending fund balance increasing between what is estimated at budget
adoption and what the actual amount is when the District’s fiscal year is closed in
September.

Compensation is the largest area of District expense. While the District is generally
comparable to other Districts, there are some differences in the amount and level it
spends on classified salaries and employee benefits. The District ranks within the
comparison group as spending among the lowest percentage of its budget on certificated
salaries, but spends more per student on certificated salaries than other districts in the
comparison group. Also the District’s teacher salary profiles is lower than expected when
compared to districts in the comparison group. This suggests that the District may not be
as successful retaining staff and/or that the District tends to have larger class sizes.
o Specific comparison points (lowest and average salary) on the teacher salary
profiles are amongst the lowest in the comparison group and when compared to
districts in Monterey County, the District’s lowest, average, and highest teacher
salaries for 2012-13 ranks in the middle of the group.
o Multi-year analysis reflects that there have been significant increases in classified
support, classified administrator, and other classified expenditures that are likely
due to additional positions being added in recent years.
o Multi-year analysis for benefit expenditures reflects that the higher than average
expenditures for other post retirement benefits and worker’s compensation is a
historical trend.

The District’s collective bargaining agreements for classified and
certificated employee groups contain language for retirement benefits
which present a challenge in allocating resources to fund the future
liability for other post retirement employee benefits.

The District has a budget development system in place, but it appears that financial
performance rather than student performance has been the primary driver. While there
cannot be a diminished focus on the importance of accurate revenue forecasts, historical
trends, and patterns, LCFF presents both the opportunity and an imperative to use
performance-based budgeting to better align all resources to support improvement in
student outcomes.

The District’s 2014-15 LCAP reflects that a significant investment of supplemental and
concentration funds (25 percent) will be allocated to sites to serve the unique needs of
students. The District has the opportunity and responsibility to build capacity among its
site level leadership to better align site level resources to support improving student
outcomes.
Recommendations and Options to Consider
1) Develop a clear vision for instruction within Monterey Peninsula Unified School District to
add depth to existing goals and actions. This District has begun a comprehensive analysis and
planning process with studies and reviews of the District’s curriculum, facilities, and
20
finances. There are also relatively recent Board goals and a process for updating such goals.
For the District to support resource alignment, a clear vision for instruction must be present
around which goals, initiatives, and actions can be aligned. As this begins to emerge,
deliberate attention should be given to instituting management practices that reinforce
resource alignment. Following are several examples of promising practices:
a) With the vision for instruction in mind, clearly identify objectives for sites and a
multi-year plan to shift and/or clarify site allocation and planning practices. There
should be processes recommended or mandated that support sites in effective
planning for school site needs that align to District priorities with routine progress
monitoring and support for outcomes. Such a plan should also provide sites with a
clear understanding of how budgets will grow and be related to needs and outcomes.
b) Improve budget transparency and communication. The District budget documentation
is inherently complex and lacks clear explanation of how resources connect to District
goals. The District should work to develop the budget to explain how resources are
related to goals. The LCAP currently requires a reporting of resources for each
specific action/service. A summary showing a resource summary with emphasis on
alignment towards outcomes would reinforce for stakeholders the value and
importance of resource alignment.
c) Create a data display or dashboard that includes key indicators for routine progress
monitoring of District goals and priorities with resources noted. This will aid in
communication and transparency, as well as ongoing planning and attention to the
importance and value of resources.
d) Revisit site allocation to balance site-specific autonomy to address needs with District
identified vision. Current allocation practices reflect historical precedent and in some
cases lack a clear rationale. As the District clarifies its vision, it should consider how
to engage sites in needs assessment, planning, and accountability as a means to
develop a performance focused culture. This could include initiating changes with
specific funds (e.g., Title I, LCFF) as a means to pilot before scaling districtwide.
2) Use regular Executive Cabinet meetings and time with site administrators to improve
resource planning, adherence with budget procedures, and progress monitoring. The District
has lacked strong connections between curriculum planning and budget management. The
process for developing more robust systems to support resource alignment require intensive
teaming between the various District departments (e.g., Educational Services, Human
Resources, Fiscal) and the District with sites. The District may want to consider creating a
standing resource alignment item for its strategically oriented cabinet and site meetings with
a clear agenda for the year as to how this strand of dialogue will contribute to evidence of
improved practice. Areas of focus/attention could include: instructional priorities and
expectations for resource alignment, fiscal management practices, progress monitoring
metrics including resource considerations, needs analysis and relationship to allocations, and
stakeholder communication regarding resources and impact on students.
3) Revise or eliminate the eight period day. The District’s curriculum audit identified concerns
regarding the effectiveness of the eight period day, which merit consideration. The District
21
should consider the cost-effectiveness of this approach as it assesses how it aligns resources
to strategic priorities.
4) Complete a more in-depth study of the special education program to identify practices that
contribute to unpredictable costs, overall costs of the program, and impair or contribute to
program quality. The overall costs of the District’s special education program are above that
of statewide averages. There have also been significant increases and variances within the
program’s budget. Areas to consider include individualized education program (IEP)
development process with attention to criteria for goal setting and service provision, staffing
approach and alignment to student needs, organizational structure, and relationships with
parents and quality of communication.
5) Improvement alignment of classified staff to District priorities and needs. As the District
increases its investments in positions it should carefully current classified staffing levels and
structures to ensure that existing and new positions are in alignment with the District’s
strategic objectives.
6) Transition the work of the District Budget Advisory Committee to supporting LCFF and
LCAP planning. The DBAC should be viewed as one of the groups consulted in the budget
and plan development process. The DBAC can complement other voices in this process such
as the parent advisory group, English learner advisory group, site councils, and staff and
students. Potential areas of focus for the DBAC could include informing district
prioritization and being an outreach to others to support communication about the budget as a
resource to achieve District goals for students.
22