2 of 15

Proposed Goal: Average Salary Increases -

6.9% for Teachers & 6.5% for All Staff for 2023-24 SY

Why is this important?

Teacher retention is a key lever of long-term academic quality. Staff Retention will ensure our aligned academic direction, which is critical for our charter renewals in 2024, 2025, and 2026. Given the challenges in the Bay Area, this is an area of organizational risk that we must continue to manage.

On our Fall Staff Survey, our teachers and staff shared concerns about rising inflation and cost of living increases

Honoring teachers and staff and their incredible work during the last few years, and countering the “great resignation” trend we have seen locally and nationally

Seek to increase our market competitiveness for teachers, leadership and other staff roles where we have been under market and continue to compete with surrounding districts and charters that all have continued to increase comp

3 of 15

Timeline

Fall 2022: A compensation study was performed that resulted in identifying the need for a market adjustment pertaining to a subset of leadership positions that the board determined should be included in fiscal year 2024 increases.

January: Our Finance and HR teams thoroughly reviewed all existing positions, factored in step increases market data and COLA projections, and projected revenues to arrive at the proposed rates while staying within our budget

January 25^th: Finance Committee meets and reviews the compensation analysis

February 1^st: Present to the Board of Directors for compensation approval

February 13^th - March 8^th : HR preps Addendums and is provided to all staff to sign and return (Teachers by March 1st, All Other Staff by March 8th). The addendums will state that this is pending final approval of the Governor’s budget and education budget trailer bill in June.

4 of 15

Our Proposal for Teacher Compensation: 6.9% aggregate increase

Our Proposed Base Salary Increase:

5%+: Minimum 5% increase for All Teachers & Education Specialists
Teachers in year 2 to year 15: 6% to 8% increase (approximately 80% of our teachers fall into this category)
LCPS Average Salary Increases: from $70K to $74K
First year teacher salary: Just under $59K to just under $62K
Total Cost increase in Teacher Base Salary: ~$660K (including 2 new teachers added to Lodestar HS for 12th grade)

5 of 15

Our Proposal: LCPS to OUSD Comparison

Key Takeaways:

The proposed 5% scale increase places us in a competitive position with OUSD even when factoring in the impacts of current bargaining and possible scenarios of where they might land
We might have to catch up in future depending on how bargaining goes, but not making a more substantive increase now will likely put us behind again as early as this summer:

If OUSD successfully bargains for a substantive total salary increase, it will likely by implemented in stages over the duration of the contract, giving us time to respond
Area charters and districts are also at the table and one area district just added 12% in the fall.

6 of 15

Our Proposal: Surrounding District and Charter Comparisons

Key Takeaways:

The proposed 5% scale increase places us in a competitive position with our closest local competitors but still slightly behind the wider field of competing districts and charters in the larger Bay Area region
vs. Local Charter Peers: on average, our teachers would make $2100 more
vs. OUSD we remain highly competitive, but with other surrounding districts factored are not as competitive

Notes:

80% of LCPS teachers fall in Steps 1-15

*Area charters and districts are in active bargaining and are expected to end bargaining with substantive multi-year salary increases

**Note that our scale does not reflect Hard to Staff and additional certification add ons that LCPS applies to make our offers more competitive–so our offers, especially in harder to staff areas are typically higher than this

7 of 15

Key Metrics and Financial Variables for Teacher Compensation

How will LCPS afford these increases?

Enrollment increases by ~65 students (adding 12th grade at Lodestar); +2 in staff headcount (for Lodestar senior class addition), which translates to 58 ADA

Conservative COLA assumption of 5% increases revenue of approximately in 2024 would result in an increase of approximately $2MM; current Governor’s budget has this increase at 8.13%

ADA modeled conservatively at 90%

LCFF in 2025 and 2026 at estimated 3% increases revenue at $1.4MM and $600k respectively

8 of 15

Compensation Projections for 2024, 25, and 26

Assumes 6.9% and 6.5% increase for 2024; 3% COLA in 2025 and 2026

9 of 15

LCFF/Unrestricted Funded Compensation Analysis

136 of our projected 242 headcount are what we call “core” positions.
These roles are funded by LCFF, as this is consistent revenue based on our student enrollment and ADA.

10 of 15

Restricted/Grant Funded Compensation

106 of our projected 242 headcount are grant funded positions, and are contingent on the grant funding.
These roles are “restricted,” which means that they must fulfill a role aligned to the source of the funding or grant. Such examples include our Title funded roles (I and III), Special Education funding, CCSPP grant, Measure N/H and G1, and Strong Workforce, Expanded Learning, and After-School program grants (ASES and ASSETs)

11 of 15

From February 2022 Last Year - LCFF Analysis

Budgeted Enrollment

This time last year, we started our 22-23 Budget process with an assumption of 1561 students. Later in June, we did move our enrollment to 1600 students.
Looking back, we hit the “best case scenario” as our LCFF revenue of our current annual budget is $20.5MM

12 of 15

For 23-24 SY: Updated LCFF Assumptions and Feasibility with Budgeted Enrollment

13 of 15

SUMMARY: LCFF increases compared to compensation increases

SUMMARY: Restricted / Grant funding compared to compensation increases

Key Points:

Some grant funding lanes are fixed - as an example, those positions funding by our Strong Workforce grant and CCSPP grant will require compensation to increase within the grant terms. We would need to make some slight grant budget revisions within our fixed yearly award to adjust for compensation increases

Other grant funding lanes have COLA increases - for example, our After School program grants, measure N/H that funds our Career and Technical Education pathways in our high schools, and positions tied to state block grants will have an increase connected to the COLA and the CA state budgets.

14 of 15

Multi-Year P&L Model with Low Case Scenario (5% COLA + 90%ADA)

Revenue Assumptions in our Low Case Model:

Both Unrestricted and Restricted/Grant revenue increase of 5% in 2024, and 3% in 2025 and 2026.
Special Education Encroachment: Our unrestricted net income must be higher than our restricted net income loss (due to the cost of running our special education program); see blue markers in FY24 and FY25

Expense Assumptions in our Low Case Model:

Adjusting from inflation: Benefits, Supplies, Services and Operations (3000, 4000, 5000) increasing 3% each year (from our actuals last 6 months). Does not include rent, as that is fixed for next three years with our bond process.
Special Education Encroachment: In FY26 is when our low case model becomes very tight; See yellow marker
Capital Outlay: this will change with our upcoming facilities projects (assumed 3% increase for now).

Accounting Note: 1000/2000s are personnel costs; 3000s Benefits; 4000s books and supplies: 5000s services; 6000 Capital Outlay

15 of 15

Summary

Proposed compensation increase is $1.3MM in 2024 with a subsequent annual increase of $550K and we will hold headcount flat as we are not adding any more grades at Lodestar.

Projected LCFF increase is $2MM in 2024, $1.5MM in 2025, and $700K in 2026

The Proposed 2024 compensation increase is feasible vs. our conservative model with realistic Enrollment / ADA targets and the 23-24, 24-25, and 25-26 revenue projections and addresses the real cost of living and market competitiveness issues

Financial Safeguard in 2024 is that we budgeted with a low-case COLA scenario despite the Governor’s higher projections (5% vs. 8.13%)

In future years, we will have to continue to manage to shifting adjustments to the Governor’s budget accordingly.

In the event of a “worse than low case scenario,” much lower enrollment or ADA than anticipated, very low COLA, or loss of grant funding, we may need to reduce headcount as well as make revisions to grant budgets that are in play.