2010-11 2010-11 State Adopted State Adopted

BudgetBudget

Board of EducationBoard of Education

October 19, 2010October 19, 2010

LODI UNIFIED SCHOOL DISTRICTBusiness Services/Budget Department

Prepared by: Dr. Cathy Nichols-

Washer Douglas Barge

Carrie Hargis

Y:\Business Services\Budget\2010-11\Adusted\Meetings\B10-19-10\10-11 State Adopted B10-19-10.ppt

Table of Contents

DESCRIPTION

A. Opening Comments A1 – A2B. Revenue Limit B1 – B3 C. Cash Flow C1 – C3

D. Other Funds D1 – D4E. Budget Balancing Tools E1 – E2F. Categorical Programs F1 G. Wrapping it Up G1

PAGE #

i

i

Opening Opening CommentsComments

School District Governing Boards are required by Education Code 42127 to adjust their budgets within 45 days of the State adopting a budget plan

This report is the first step in the process Staff will be reporting the major elements of the State Adopted

budget that affect the Lodi Unified School District

On November 3, staff will report the impact of the State budget plan on the District and present recommendations for changing the District budget

Formal Board action to adjust the District budget will be presented on November 16

A1

Opening CommentsOpening Comments This report will focus on changes to the education budget based on

what the State has for us

As with any State budget there are significant pluses & minuses

Pluses: Fewer reductions than were being proposed back in May Some new funding (one-time)

Minuses, lots and lots of minuses: Retains huge deficits Suspends Prop 98 Sales of State assets to create one-time resources, which will require

on-going expenditures (rents) By all accounts the income assumptions have high risks Does not address the long term structural balancing at the State level

A2

The 2010/11 The 2010/11

Revenue Revenue LimitLimit

B

Revenue Limit Revenue Limit DeficitDeficit

-7.8

4%

11.0

10%

-7.8

4%

-13.

09%

-17.

967%

-18.

36%

-18.

36%

-18.

36%

-3.8

5%

-17.

96%

Januar

yMay

Adopted

Januar

yMay

Adopted

Januar

yMay

Adopted

2008/09 2009/10 2010/11

(.39%) Or $25

Adopted Change

#2

Adopted Change

#1

B1

Revenue Limit Revenue Limit Deficit FactorDeficit Factor

Revenue Limit is being increased by $1.5 B in 2010/11

This increase amounts to about $246$246 per student

This is a reversal of the Governor’s proposal made back in May

The question of one-time verses on-going is still being researched by staff

Deficit Factors Changes2009/10 2010/11

January 13.094% 18.355%

May Revision 17.967% 18.355%

State Adopted 18.355% 17.963%

(.39%) (.39%) Or $25Or $25

B2

K-12 Revenue K-12 Revenue LimitLimit

Governor’s Governor’s Jan. Proposal Jan. Proposal For 2010/11For 2010/11

Cola (.38%)

DeficitDeficit 18.355%

Governor’s Governor’s MayMay Proposal Proposal For 2010/11For 2010/11

Cola (.39%)

DeficitDeficit 18.355%

2010/11 State’s 2010/11 State’s AdoptedAdopted BudgetBudget

Cola (.39%)

DeficitDeficit 17.963%

GooGood d

StufStufff

($1,147)($1,147)

B3

Cash FlowCash Flow

C

2010/11 Cash 2010/11 Cash FlowFlowState Delays State Delays Paying SchoolsPaying Schools

July 10

Dec 10

Aug 10

Sept 09

Sept 10

Oct 10

Nov 10

Jan 11

Feb 11

Mar 11

Apr 11

Dec 10

May 11

Jun 11

Jul 11

Aug 11

Aug 11

C 1

Jul 11

25% of 25% of my cash my cash

next next year?year?

Apr 11

9%

9%

9%

9%

9%

5%

5%

9%

.5% 8.5%

9%

6%

4.5%

3%

4.5%

C1

State Funding State Funding AllocationsAllocations

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. April May June July Aug.

C2

The Cash Flow The Cash Flow ProblemProblem

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July

State Cash Property Taxes Cash At the Beginning of the Month

Panic

Time

C3

Other Other ProgramsPrograms

D

Special EducationSpecial Education

The budget plan restores the loss of funding resulting from a negative COLA (.38%)

Growth Funding is provided

Mandate turmoil related to mental health services continues at two levels

Who provides the services? How are they to be paid?

D1

Mandated Mandated ProgramsPrograms

These have historically been an extremely unreliable revenue stream

The May budget proposals contained only a few token dollars

This has changed with the new State Adopted budget for 2010/11

There is “Settle Up” funding for 2009/10 payments There is some funding for 2010/11 The amounts coming to the District are not known and should be

considered one-time resources

D2

Kindergarten Kindergarten Entry AgeEntry Age

SB 1381 (Chapter 705/2010) changes the date for students starting kindergarten – they must turn five on or before:

December 2 for the 2011/12 school year November 1 for the 2012/13 school year October 1 for the 2013/14 school year September 1 for the 2014/15 school year and each school year

thereafter

Requires school districts to offer a transitional kindergarten program, which is phased in over three years beginning in 2012/13

Defines transitional kindergarten as the first year of a two-year kindergarten program

Uses curriculum that is age and developmentally appropriateD3

PERS & STRS PERS & STRS CostsCosts

STRS

Program is actuarially out of balance over the long term

Rate increases are likely in the near future

There will be other changes to the program

Legislation will be required to increase contribution rates

PERS

Program is actuarially out of balance over the long term, as well

Rate are going up

D4

Budget Budget Balancing Balancing

ToolsTools

E

Flexibility AvailableFlexibility Available Expires January 1, 2012:

Proceeds from the sale of surplus property may be used in the General Fund – Ends June 30, 2012

Expires June 30, 2012: Minimum reserve requirements Reduced penalties for K-3 CSR

Expires June 30, 2013:

Standard aligned instructional materials sufficiency Base year of 2007/08 for ADA-Funded flexible programs (adult ed., ROP

& others)

8E1

Flexibility AvailableFlexibility Available Expires June 30, 2013 (cont.):

Routine Restricted Maintenance set aside reduced to zero (except for what is necessary for Williams compliance)

Deferred Maintenance hardship funding suspended

Suspension of Deferred Maintenance local match requirement

Tier III Categorical Program flexibility

Reduction of school year by up to five days and/or equivalent in instructional minutes

Suspension of instructional materials adoption requirement

8E2

Categorical Categorical ProgramsPrograms

F

Program ChangesProgram Changes Federal Jobs Program:

First 90% of funding has arrived Funding may be used to support educational programs and

related services It’s intended for staff

Remaining funding may not equal the full 10%

State Fiscal Stabilization Fund (SFSF)

Final allocation adjustments will be coming to the District Could be between $40 & $50 per ADA This is one-time funding

6F1

Wrapping It Wrapping It UpUp

G

ConclusionConclusion

Our next report will provide recommendations for adjusting our budget

State Categorical Tier III flexibility will be coming to an end soon There are a lot of unknowns Funding is not guaranteed Requirements may or may not change

Mandated income should not be budgeted until it arrives

Federal Job program provides only one-time resources A plan can be put together to fulfill our negotiated agreement with

LEA

10G1

The End!