Governors 2010 May Revise & Districts Proposed 2010-11 Budget June 22, 2010 Steven Lawrence, Ph.D., Superintendent Bryan Richards, Director, Fiscal Services.

Governor’s 2010 May Revise & District’s Proposed 2010-11

BudgetJune 22, 2010

Steven Lawrence, Ph.D., SuperintendentBryan Richards, Director, Fiscal Services

Negative COLA & Deficits

A 0.39% DECREASE in funding; ($25) per ADA (which works out to about ($19.45)/ADA when deficited)

Starting next year it will become ongoing and be 3.85% * undeficited revenue limit (including Beginning Teachers and Meals for Needy Adjustments and COE ADA, but with the cut not passed through to the COE for an effective cut of $247.00/ADA)

Funded Revenue Limit 2009-10 vs. 2010-11

Graph courtesy of School Services of California, Inc.

Mt. Diablo Unified School District

2009-10 2010-11

$6,371.02 $6,346.02

$4,947.49 $4,936.51

Loss due to Deficit Factor and $254-per-ADA

one-time cut

Loss due to Deficit Factor and 3.85% per-

ADA Reduction

Funded Revenue Limit Funded Revenue Limit

$1,409.51$1,423.53

What does a 22.21% cut look like? School year is 180 days 22.21% of school year is 40 days To cut school by 22.21% we would have

closed after school ended on April 16th

A 22.21% reduction of the school day would equal about 1 ½ hours less instruction daily

10/11 revenue limit cut deepens to $1,409/ADA

MDUSD Revenue Limit Funding per ADA

6,803

6,617

6,4616,3466,371

6,109

5,125

5,528

5,647

5,482

5,348

5,227

5,079

5,780

5,303

5,1625,041

4,9374,947

5,630

4,750

5,250

5,750

6,250

6,750

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14

Year

Do

llar

s $

per

AD

A

Revenue Limit

Actual 09-10Budget

May 2010 Revise

Declining Enrollment Less Steep than projected at P-1

At adoption we projected a decline of 184.23 ADA

At P-1 we were down 719.95 ADA For P-2 we are down 550.58 ADA We are down 1.66% from 2008/09

MDUSD Enrollment Declining!P-2 ADA

29,500

30,000

30,500

31,000

31,500

32,000

32,500

33,000

33,500

34,000

34,500

35,000

P-2 ADA

How does revenue limit funding look?Revenue Limit

160,000,000

165,000,000

170,000,000

175,000,000

180,000,000

185,000,000

190,000,000

195,000,000

200,000,000

Revenue Limit

MDUSD

Revenues

Estimated Actuals Proposed Projected

Unrestricted 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Revenue Limit 185,833,596 187,893,543 182,218,757 159,012,690 156,460,391 157,660,440

Federal 221,236 605,858 402,858 225,054 232,231 229,989

State 17,346,231 17,404,849 16,894,600 31,683,519 31,510,175 32,031,067

Local 7,750,756 5,667,289 4,524,339 3,490,005 1,123,770 1,123,770

Total Unrestricted 211,151,819 211,571,539 204,040,555 194,411,268 189,326,567 191,045,266

Restricted 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Revenue Limit 6,927,065 7,450,041 7,189,798 6,815,118 6,797,720 7,287,766

Federal 16,888,400 15,055,764 28,266,945 35,444,678 20,276,395 20,080,659

State 53,977,961 54,769,197 54,986,527 37,607,078 36,219,630 35,869,987

Local 5,863,773 5,495,204 5,602,383 9,749,285 7,180,556 7,111,239

Total Restricted 83,657,199 82,770,206 96,045,653 89,616,159 70,474,301 70,349,651

Combined 294,809,018 294,341,745 300,086,208 284,027,427 259,800,868 261,394,917

-

20,000,000.00

40,000,000.00

60,000,000.00

80,000,000.00

100,000,000.00

120,000,000.00

140,000,000.00

160,000,000.00

180,000,000.00

200,000,000.00

220,000,000.00

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Year

MDUSD Unrestricted Revenue 2006/07 - 2011/12

Local

State

Federal

Revenue Limit

`

-

10,000,000.00

20,000,000.00

30,000,000.00

40,000,000.00

50,000,000.00

60,000,000.00

70,000,000.00

80,000,000.00

90,000,000.00

100,000,000.00

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

Year

MDUSD Restricted Revenue 2006/07 - 2011/12

Local

State

Federal

Revenue Limit

-

50,000,000.00

100,000,000.00

150,000,000.00

200,000,000.00

250,000,000.00

300,000,000.00

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

Year

MDUSD General Fund Revenue 2006/07 - 2011/12

Local

State

Federal

Revenue Limit

Unrestricted General Fund Revenues Without Negotiable With

Negotiable Budget Items Budget Items

Revenue Limit Sources $ 156,460,391 $ 156,460,391

Federal Revenue 232,231 232,231

Other State Revenue 31,510,175 31,510,175 Other Local Revenue 1,123,770 1,123,770 Total Revenue 189,326,567 189,326,567 Less: Contribution to RGF (39,730,919)

(36,721,363) Net Available Revenue $ 149,595,648 $ 152,605,204

Mt. Diablo Unified School District Unrestricted General Fund Revenues Before Contributions

Without Negotiable Items 2010-11 Total = $189,326,567

Local Revenue0.6%

State Revenue16.6%Federal Revenue

0.1%

Revenue Limit Contributed to

Restricted20.7%

Revenue Limit61.9%

Mt. Diablo Unified School District Unrestricted General Fund Revenues Before Contributions

With Negotiable Items 2010-11 Total = $189,326,567

Local Revenue0.6%

State Revenue16.6%Federal Revenue

0.1%

Revenue Limit Contributed to

Restricted19.4%

Revenue Limit63.2%

Health rates skyrocketing!Kaiser Rates

0

500

1,000

1,500

2,000

2,500

Year

Mo

nth

ly P

rem

ium

1 party

2 party

3 party

Compounding rate increasesKaiser % Increase

0.0%0.0%

10.0%10.0%10.0%10.0%6.8%23.3%

4.8%8.0%9.2%10.7%9.8%16.1%17.8%

296.4%

260.3%

227.6%

197.8%170.7%

45.3%

68.8%85.3%

105.2%123.9%

141.9%153.4%

0.0%

50.0%

100.0%

150.0%

200.0%

250.0%

300.0%

CY 2002

CY 2003

CY 2004

CY 2005

CY 2006

CY 2007

CY 2008

CY 2009

CY 2010

CY 2011

pro

j

CY 2012

pro

j

CY 2013

pro

j

CY 2014

pro

j

CY 2015

pro

j

Year

Per

cen

t In

crea

se

y/yinc

incsince02

MDUSD Benefit CostsHealth, Dental, Vision & Post Retirement Benefits

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

Year

Am

ou

nt

General Fund

Unrestricted Expenditures Without Negotiable With Negotiable Budget Items Budget Items

Certificated Salaries $ 90,791,443 $ 87,431,235 Classified Salaries 20,344,861 19,522,530 Employee Benefits 33,148,724 31,940,756 Books & Supplies 4,572,599 4,572,599 Services & Operating 12,579,787 12,470,786 Capital Outlay 86,707 86,707 Other Outgo 926,781 926,781 Interfund Transfers Out 3,486,037 3,486,037 Total Expenditures 165,918,823 160,437,431 Less: Indirect Cost Xfrs In (4,489,912) (4,489,912) Net Expenditures $ 161,447,026 $ 155,947,519

Mt. Diablo Unified School DistrictUnrestricted General Fund Expenditures and Transfers Out

Without Negotiable Items 2010-11 Total = $165,918,823

Services & Operating

7.58%Capital Outlay

0.05%

Other outgo0.54%

Interfund Transfers Out

2.10%Books and Supplies

2.76%

Employee Benefits19.98%

Classified Salaries12.26%

Certificated Salaries54.71%

Mt. Diablo Unified School DistrictUnrestricted General Fund Expenditures and Transfers Out

With Negotiable Items 2010-11 Total = $160,437,431

Services & Operating

7.77%Capital Outlay

0.05%

Other outgo0.54%

Interfund Transfers Out

2.17% Books and Supplies

2.85%

Employee Benefits19.91%

Classified Salaries12.17%

Certificated Salaries54.50%

Unrestricted Bottom Line

Without Negotiable With Negotiable

Budget Items Budget Items

Net Available Revenue $ 149,595,648 $ 152,605,204 Net Expenditures 161,447,026 155,947,519 Net (decrease) fund bal. (11,851,378) (3,342,315) Beginning Balance, July 1 18,725,556

18,725,556 Projected Ending Balance $ 6,874,178 $

15,383,241

Components of Ending Balance Without Negotiable With Negotiable

Budget Items Budget Items

Revolving Cash $ 300,000 $ 300,000

Stores Inventory 536,118 536,118

Economic Uncertainties (2%) 5,438,064 5,267,883 IRS Audit 533,500

533,500 Undesignated Balance 66,496 8,745,740 Ending Balance $ 6,874,178 $ 15,383,241

Restricted Revenue

Without Negotiable With Negotiable

Budget Items Budget Items

Revenue Limit Sources $ 6,797,720 $ 6,797,720

Federal Revenue 20,276,395 20,276,395

Other State Revenue 36,219,630 36,219,630 Other Local Revenue 7,180,556 7,180,556 Contribution from UGF 39,730,919

36,721,363 Total Revenue $ 110,205,220 $ 107,195,664

Mt. Diablo Unified School DistrictRestricted General Fund Revenue

2009-10 Total = $110,205,220

Interfund Transfers0.00%

Local Revenue6.52%

State Revenue32.87%

Federal Revenue18.40%

Revenue Limit6.17%

Contribution from Unrestricted

36.05%

Mt. Diablo Unified School DistrictRestricted General Fund Revenue

2009-10 Total = $107,195,664

Interfund Transfers0.00%

Local Revenue6.70%

State Revenue33.79%

Federal Revenue18.92%

Revenue Limit6.34%

Contribution from Unrestricted

34.26%

Restricted Expenditures

Without Negotiable With Negotiable

Budget Items Budget Items

Certificated Salaries $ 33,678,278 $ 32,447,599 Classified Salaries 18,950,519

18,307,785 Employee Benefits 22,472,480

19,904,284 Books & Supplies 7,754,201

9,186,256 Services & Other Operating 22,075,003 22,075,003 Capital Outlay 216,000 216,000 Other Outgo 1,560,284 1,560,284 Indirect Costs Xfr Out 3,749,404 3,749,404 Total Expenditures $ 110,456,169 $

107,446,615

Mt. Diablo Unified School DistrictRestricted General Fund Expenditures

Without Negotiable Items 2010-11 Total = $110,456,169

Interfund Transfers

0.00%

Indirect Costs Xfr Out

3.39%

Books & Supplies7.02% Employee

Benefits20.35%

Classified Salaries17.16%

Certificated Salaries30.49%

Capital Outlay0.20%

Other outgo1.41%

Services & Other Operating

19.99%

Mt. Diablo Unified School DistrictRestricted General Fund Expenditures

With Negotiable Items 2010-11 Total = $107,446,615

Interfund Transfers

0.00%

Indirect Costs Xfr Out

3.49%

Books & Supplies8.55%

Employee Benefits18.52%

Classified Salaries17.04%

Certificated Salaries30.20%

Capital Outlay0.20%

Other outgo1.45%

Services & Other Operating

20.55%

Restricted Bottom Line

Without Negotiable With Negotiable

Budget Items Budget Items

Total Revenue $ 110,205,220 $ 107,195,664 Total Expenditures 110,456,169

107,446,615 Net (decrease) in fund bal. (250,949)

(250,951) Beginning Balance, July 1 1,892,665

1,892,665 Projected Ending Balance $ 1,641,716 $ 1,641,714

Multi Year Projection Without Negotiable With Negotiable Budget Items Budget Items

Undesignated + Tier 3 @ 6/10 $ 11,888,492 $ 11,888,492 Operating Deficit 2010/11 (11,851,378) ( 3,342,315) Adjustment in 2% reserve 170,181 Eliminate Prepaids 29,382 29,382 Unappropriated Balance 6/11 66,496 8,745,740 Operating Deficit 2011/12 (10,695,771) ( 894,845) Adjustment in 2% reserve (3,750) 22,087

Unappropriated Balance 6/12 $ (10,633,025) 7,872,982

Note: Both scenarios assume that bonds are sold prior to the 2011/12 COP and LPP payments

The end of flexibility is a big problem

Without Negotiable With Negotiable Budget Items Budget Items

Unappropriated Balance 6/12 $(10,633,025) $ 7,872,982 Projected Deficit in 2012/13 (17,520,091) (5,894,546) Unappropriated Balance 6/13 (28,153,116) 1,978,436 Projected Deficit in 2013/14 (24,478,957) (11,104,134) Unappropriated Balance 6/14 (52,632,073) ( 9,125,698) Projected Deficit in 2014/15 (25,992,314) (10,865,983) Unappropriated Balance 6/15 $(78,624,387) $ (19,991,681)

Average deficit is $18,108,452 per year without negotiable itemsAverage deficit is $ 6,381,911 per year with negotiable items

How much less must we spend?

Enrollment declines projected to continue through 2014 at rates between 0.78% and 1.43% per year

We must decrease ongoing annual spending by a minimum of $18.1M by 7/1/2010 for the 2010/11 school year to fully address the problems including flexibility loss in 2013/14 OR,

Cut at least $40.1M plus a cushion over three years by 1st interim and plan for substantially deeper cuts to solve the structural deficit as K-3 CSR returns and flexibility goes away.

What if we cannot get negotiable items in mediation? Additional Cuts to M&O (19.625 FTE)

1 FTE Carpenter (currently vacant) 2 FTE Painter (currently vacant) 6 FTE Night Custodian (1 @ each High School) 0.625 FTE Night Custodian @ Olympic 1 FTE Night Custodian (RMS/SAES split) 1 FTE Equipment Mechanic 1 FTE General Maintenance Worker 1 FTE Equipment Operator 2 FTE Network Technician I 3 FTE Groundskeeper/Gardener 1 FTE Sprinkler Technician

What if we cannot get negotiable items in mediation? Additional Cuts to CST

29 – 0.875 FTE (7 hr/day) Elementary Secretary reduced by half to 0.4375 FTE (3 ½ hr/day) each

16 – 0.875 FTE (7 hr/day) Secretary (one at each Middle & High School) reduced by half to 0.4375 FTE (3 ½ hr/day) each

Additional Cuts to CSEA Approximately 100 – 0.8125 (6.5 hr/day), 0.75

FTE (6 hr/day) or 0.625 FTE (5 hr/day) reduced to 0.4375 FTE (3 ½ hr/day) each or less and creation of additional 0.4375 FTE positions as needed to continue services, fewer positions reduced if hours not needed to be covered

What if we cannot get negotiable items in mediation? Additional Cuts to MDEA

Increase minimum class sizes Other cuts or adjustments to be determined

Additional Cuts to MDSPA All current positions that are less than 1.0 FTE will

be consolidated into whole FTE to eliminate extra fully-benefited but part-time worked positions

What about management?

DMA has already accepted: 3-4 unpaid furlough days in 2009/10 (waiving

rights to prior year March 15th notice) 7-9 unpaid furlough days in 2010/11 Cap of district contribution to health benefits at

2010 Kaiser rates Reduction of post retirement health coverage from

two-party to employee only for new retirees effective July 1, 2011

No vacation payoffs beyond carryover limits effective July 1, 2010 (use it or lose it)

Other Funds Funds for special purposes excluded from the

General Fund Special Revenue Funds

Charter School – Form 09 Adult Education – Form 11 Cafeteria – Form 13 Deferred Maintenance – Form 14

Capital Projects Funds Building (Local bond for construction) – Form 21 Capital Facilities (Developer Fees) – Form 25

Other Funds Capital Projects Funds (continued)

County School Facilities (State allocation of funds for construction) – Form 35

Capital Project for Blended Component Units (Mello-Roos) – Form 49

Debt Service Funds Bond Interest and Redemption – Form 51 Debt Service for Blended Component Units (Mello-

Roos) – Form 52 Foundation Private-Purpose Trust Fund

(Scholarship Fund) – Form 73 All “Other Funds” projecting positive fund

balances

What next?More from

Sacramento

Both houses of legislature sent their versions of the State budget to conference committee

Legislature did NOT finish by June 15, still not finished

Governor’s signature due June 30, but unlikely

Meanwhile back in Concord… We must adopt a budget tonight We must prepare an additional contingency if

the State doesn’t fund the COLA 2011-12 (an additional $3,420,000 ongoing cut based on May revise estimates)

Season Finale…

PERS announced the 2011 insurance rates and benefit changes (some co-pays are increasing, Kaiser rates up 6.84%)

The State Legislature did not pass a revised budget

Events to watch for next season… Will we have a budget out of the legislature by the time school starts?

Will the Governor sign it? The end of ARRA We must conquer our deficit

spending or find new revenue sources

Have a great summer!

Starring:

ARNOLD SCHWARZENEGGER

the Governor

MARIA SHRIVER

the State’s First Lady

DARRELL STEINBERG

the Senate President

JOHN PÉREZ

the Assembly Speaker

MAC TAYLOR

the Legislative Analyst

JOHN CHIANG

the State Controller

and

JACK O’CONNELL

the Superintendent of Public Instruction