2006/07FIRST INTERIM

FINANCIAL REPORT

December 12, 2006

2006/07FIRST INTERIM

FINANCIAL REPORT

December 12, 2006

Our Mission is to: Accelerate gains in student performance. Provide safe, orderly & well-maintained schools. Strengthen parent, community, business & higher education support. Boost employee morale. Secure adequate funding for our schools.

2

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Agenda

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Agenda

• Agenda

Purpose

Revenue Considerations … 2006/07

Expenditure Considerations … 2006/07

Major Assumptions … 2007/08 – 2008/09

Multi-Year Projections … 2006/07 – 2008/09

Targeted Ending Balance … 2006/07

Our Mission is to: Accelerate gains in student performance. Provide safe, orderly & well-maintained schools. Strengthen parent, community, business & higher education support. Boost employee morale. Secure adequate funding for our schools.

3

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Purpose

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Purpose

• The Board Must Approve the District’s First Interim Financial Report on the Budget Status as of October 31, 2006

California Education Code 42130 Requires Approval by December 15, 2006

• The Board is Also Required to Certify to the State That the District’s Projected Financial Condition is one of the Following:

Positive Certification ... will be Able to Meet Financial Obligations

Qualified Certification … may not Meet its Financial Obligations

Negative Certification … will be Unable to Meet its Financial Obligations

• Recommend Positive Certification

Our Mission is to: Accelerate gains in student performance. Provide safe, orderly & well-maintained schools. Strengthen parent, community, business & higher education support. Boost employee morale. Secure adequate funding for our schools.

4

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Revenue Considerations

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Revenue Considerations

• Actual Enrollment Declined Less Than Projected

Gained Back 580 Students

• Received the Planned State Funded COLA of 5.92%

• Obtained Additional Equalization Aid of $1.1m

• Unexpectedly Received Significant One-Time Mandated Cost Reimbursement Revenue of $39.0m

Our Mission is to: Accelerate gains in student performance. Provide safe, orderly & well-maintained schools. Strengthen parent, community, business & higher education support. Boost employee morale. Secure adequate funding for our schools.

5

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Expenditure Considerations

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Expenditure Considerations

• Provided for 5.78% Salary Increase Retroactive to 7/1/06

• Achieved .78% Mid-Year Health and Welfare Benefits Cost Savings

• Made Additional Bus Replacement Deposit of $1.5m Using One-Time Mandated Cost Reimbursement Revenue

• Set Aside Special Reserve for $30.0m Mandated Cost Reimbursement Revenue

Must Anticipate Possible State Controller’s Office Audit

Our Mission is to: Accelerate gains in student performance. Provide safe, orderly & well-maintained schools. Strengthen parent, community, business & higher education support. Boost employee morale. Secure adequate funding for our schools.

6

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Expenditure Considerations (Continued)

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Expenditure Considerations (Continued)

• Subsidizing Existing Programs - Unplanned Additional Needs

Special Education ………………………………………. $5.5m

Child Development ……………………………………... $2.0m

Community Day School (ALBA) ……………………….. $0.9m

• Funding Emergent Programs - New Requirements

School Site IT Support Teams ………………………….. $1.0m

Twain Satellite at Morse Site ............................................ $0.6m

Arabic Program at Carver Site ………………………….. $0.6m

Unbudgeted Expenditure Growth … $10.6m

Our Mission is to: Accelerate gains in student performance. Provide safe, orderly & well-maintained schools. Strengthen parent, community, business & higher education support. Boost employee morale. Secure adequate funding for our schools.

7

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Major Assumptions – 2007/08 & 2008/09

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Major Assumptions – 2007/08 & 2008/09

• Factored in Forecasted Enrollment Decline for Seventh (2007/08) & Eighth (2008/09) Consecutive years

• Considered Projected State Funded COLA

Applied Fall 2006 “School Services CA” Dartboard

* COLA Subject to Drop to 3% - 4% Range Based on new Dept. of Commerce Data

* Legislative Analyst Office November 2006 Report Projects 3.8%

Will Update as Appropriate in Second Interim Report

2007/08 2008/09 -2,000 -2,000

+4.7% * +2.8%

Our Mission is to: Accelerate gains in student performance. Provide safe, orderly & well-maintained schools. Strengthen parent, community, business & higher education support. Boost employee morale. Secure adequate funding for our schools.

8

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Major Assumptions – 2007/08 & 2008/09

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Major Assumptions – 2007/08 & 2008/09

• Planned for Annual Health & Welfare Cost Increase

Applied Inflation Factor to 2006/07 Actuals

• Continued Funding of 2006/07 5.78% Salary Schedule Increase

•Maintained Annual Salary Schedule Step Progression

Other Salary Adjustment Subject to Board/Superintendent Direction

Sustained 2006/07 Existing Program Subsidies & New Program Requirements (Refer to Page 5)

2007/08 2008/09 +10% +10%

Yes Yes

+1.5% +1.5%

$10.6m $10.6m

Our Mission is to: Accelerate gains in student performance. Provide safe, orderly & well-maintained schools. Strengthen parent, community, business & higher education support. Boost employee morale. Secure adequate funding for our schools.

9

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Major Assumptions – 2007/08 & 2008/09

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Major Assumptions – 2007/08 & 2008/09

• Increased Special Education Requirement

Subsidized Special Education Total Compensation

• Included Previous Board Approved Actions to Transfer Expenditures for Capital Outlays, Early Retirement Payments, School Police, & Non-Capital Equipment to Other Funds

• Key Take-Away: Continually Working With Operational and Instructional Staff to Understand, Assess, and Price out old Programs and new Initiatives … K – 8 Vision, Truancy Center, Custodial Services, etc.

2007/08 2008/09 $5.6m $3.6m

Yes Yes

Our Mission is to: Accelerate gains in student performance. Provide safe, orderly & well-maintained schools. Strengthen parent, community, business & higher education support. Boost employee morale. Secure adequate funding for our schools.

10

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Multi-Year Projection($ MILLIONS)

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Multi-Year Projection($ MILLIONS)

Our Mission is to: Accelerate gains in student performance. Provide safe, orderly & well-maintained schools. Strengthen parent, community, business & higher education support. Boost employee morale. Secure adequate funding for our schools.

11

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Targeted 2006/07 Ending Balances

2006/07 FIRST INTERIM FINANCIAL REPORTGeneral Fund – Unrestricted

Targeted 2006/07 Ending Balances