Background: Per Ed Code 42127(a)(1)the Board must conduct a Public Hearing before approving the Adopted Budget. The public hearing has been noticed appropriately in local newspapers by the Placer County Office of Education. School districts are required to adopt a budget by July 1 each year. The process of building the budget begins in the prior year when the Governor first releases the Proposed State Budget in January, then revises it in May. The final State Budget is then scheduled to be passed by the Legislature by 6/15, with final enactment by Governor's signature by June 30. The 2014-15 budget year marked the initial year that school budgets were required to be presented at the same public hearing as the new Local Control Accountability Plan (LCAP). Due to the new Local Control Funding Formula (LCFF) model, and related LCAP requirements, there are many new changes in the budget development processes, accounting methods, and appropriations. Since this is a new process that is continuing to be defined/clarified by the State, and developed at the local level, changes are anticipated over the next few budget cycles. A review of the attached PCOE Common Message gives a thorough overview of the many issues involved with the new funding model, as well as general assumptions used in budget development. The proposed Adopted Budget includes the existing and additional expenditures included in the draft LCAP for 2015-16, and the Multi-Year Projections include the proposed LCAP expenditures for Years 2 & 3.  A review of the attached PCOE Common Message gives a thorough overview of issues surrounding the May Revise for the  proposed 2015-16 state budget, as well as general assumptions used in budget development and  MYP.  The 2015-16 year brings substantial restoration of funding to schools, in both ongoing LCFF "gap" funding and one-time unrestricted funding related to outstanding Mandated Cost claims.  EUSD is expecting to receive approximately $3.3 million in restored funding for 2015-16, which will help to correct deficit spending and provide resources for LCAP implementation and recently negotiated district-wide salary increases. However, because a substantial portion of the funding restoration is one-time, the  MYP indicates that structural deficit spending will still exist due to ongoing expense increases such as step/column, STRS/PERS rate increases, and new/added LCAP measures, as well as continued declining enrollment.  Recommendation:  Staff recommends approval of the proposed 2015-16 Adopted Budget. There have been three LCAP public hearings conducted by EUSD which allowed proper revisions to be made in response to stakeholder input. Because the proposed budget documents are complete at this time, any revisions requested at time of approval would be made with the 1st Interim Budget (or 45-day revision, if substantial changes).