Steven Lawrence, Ph.D., Superintendent Bryan Richards, Chief Financial Officer November 21, 2011.

Steven Lawrence, Ph.D., SuperintendentBryan Richards, Chief Financial Officer

November 21, 2011

Erased the 2.24% COLA with increase in Deficit Factor Did not cut the additional $330 per ADA that was

believed to be at risk at May revise Instead, created trigger cuts if State revenues come in

below projections, cutting funding mid-year◦ Revenue limit up to 4%◦ Home-to-School and Special Education

Transportation approximately 50% If triggers activated, districts may negotiate up to

seven additional furlough days that reduce the school calendar up to a total of twelve days

Estimated UGF ending balance $ 33.0M Estimated undesignated balance $ 23.2M Projected deficit 11/12 $( 2.2M) State fiscal uncertainty 11/12 $(10.7M) Estimated unassigned 6/12 $ 10.3M Projected surplus 12/13 $ 7.1M Reduction of 2% reserve $ 0.5M State fiscal uncertainty 12/13 $(10.7M) Estimated unassigned 6/13 $ 7.2M Projected surplus 13/14 $ 8.7M State fiscal uncertainty 13/14 $(10.6M) Estimated unassigned 6/14 $ 5.3M

Actual UGF ending balance $ 45.5M Actual undesignated balance $ 30.8M Projected deficit 11/12 $( 2.2M) State fiscal uncertainty 11/12 $(10.7M) Estimated unassigned 6/12 $ 17.9M Projected surplus 12/13 $ 7.1M Reduction of 2% reserve $ 0.5M State fiscal uncertainty 12/13 $(10.7M) Estimated unassigned 6/13 $ 14.8M Projected surplus 13/14 $ 8.7M State fiscal uncertainty 13/14 $(10.6M) Estimated unassigned 6/14 $ 12.9M

• Full utilization of State Fiscal Stabilization Fund and Education Jobs Fund in 2010-11

• Tier 3 grants remain unrestricted• Their unspent balances and site carryovers

make up large part of ending balance

Tier 3 Program Carryovers$ 3,178,903 Site Carryovers $ 1,786,820 Inventory & Prepaid adj. $ (27,678) Fund Bal. Desig. Chgs $ 4,938,045 Undesignated is up by $7.6M due to one

time Special Disability Adjustment +$2M, Mandated Cost Reimbursement +$1.4M, CSR +$0.5M, State Fiscal Stabilization funds used for salaries +$1.6M and cost savings efforts

Higher deficit factor in 2011/12 (increased from 17.963% to 19.754% to offset COLA)

Base Revenue Limit = $6,489.02/ADA Deficited Revenue Limit = $5,207.18/ADA Deficit also applies to Meals for Needy and

Beginning Teacher Salary Adjustment Total deficit factor for 2011-12 =

$42,055,325 Equivalent to eliminating 35.6 days’

instruction

State Budget calls for graduated mid-year cuts if State revenues miss estimates. If it misses by $4 billion the following occurs:

Reduction of Revenue Limit (including MFN and BTS) by an additional 4% = $261.73 per ADA or $8,515,797

It will also reduce transportation funding by 50% = $1,129,707 or $34.72 per ADA

Total trigger cuts $296.45 per ADA or $9,645,504

Furlough Days: Budgeted at 7 days, yet to be negotiated with MDEA ($6M)

$6M x 3 years = $18M This is greater than the remaining

unassigned balance in the three year term of the projection

New dartboard: Loss of 12/13 COLA:•$- 5.4M Lose 3.2% COLA for 12/13•$- 5.4M Loss of 12/13 COLA in 13/14

County Guidance: Loss of 13/14 COLA:•$- 4.7M Loss of 13/14 COLA

Clayton Valley Charter High School• Loss of $11.4M in Revenue (less oversight $0.1M,

facilities use $0.2M)• School expenses $7M if they leave SELPA

Actual UGF ending balance $ 45.5M Actual undesignated balance 6/11 $ 30.8M Projected deficit 11/12 $( 8.2M) Reduction of 2% reserve $ 0.4M Trigger cuts 11/12 $( 9.6M) Estimated unassigned 6/12 $ 13.4M Projected deficit 12/13 $(10.1M) Reduction of 2% reserve $ 0.2M Trigger cuts 12/13 $( 9.9M) Estimated unassigned 6/13 $( 6.4M) Projected deficit 13/14 $(12.6M) Trigger cuts 13/14 $(10.0M) Estimated unassigned 6/14 $(29.0M)

2011/12 Furlough days $ 6.0M

2012/13 Furlough days $ 6.0M 2012/13 COLA loss $ 5.4M 2012/13 CVHS loss $ 4.2M

2013/14 Furlough days $ 6.0M 2013/14 COLA loss (2 yrs.) $10.1M 2013/14 CVHS loss $ 4.2M

In 2010/11 the District spent $6.7M unrestricted and $2.2M restricted general fund dollars at CVHS

The Site generated $9.0M in unrestricted revenue limit funding

The site’s unrestricted budget is currently $7.0M

The revenue the District must transfer to the charter school under the conversion scenario is $11.4M

The district can negotiate rent and receives a 1% oversight fee calculated on certain revenues of the school

LAO projects State revenues miss estimates by $3.7 billion. Under their projection the following occurs:Reduction of Revenue Limit by additional 2.9% +- $189 per ADA or $6,151,289 (less than the prorated percentage due to hitting proposition 98 floor)It will also reduce transportation funding by 51.693% = $1,167,958 or $35.89 per ADATransportation may be exchanged for revenue limit cut @ statewide average of $42 per ADA or $1,366,953Total trigger cuts $231 per ADA or $7,518,242The trigger cuts become ONGOING!

Why don’t costs track with revenue generated by site?◦ Declining enrollment – funded on higher of

current or prior year ADA district wide (not by site)

◦ Expenditure data based on Current Year Annual ADA

◦ General education programs support more costly programs such as Special Education Community Day School Continuation Education Home & Hospital

SARC collects data on expenditures, both unrestricted and restricted by site

Not all unrestricted dollars are revenue limit, but most are

Separate handout, you can see how much revenue limit was generated by each site versus expenditures

Non site-based expenditures are apportioned out based on Annual ADA

Remaining funds contribute toward categorical programs such as special education & transportation

We appreciate your taking time out of your autumn break to join us.