fremont unified school district · 2018-09-05 · revenue enhancements and budget reductions . 12 ....

Fremont Unified School District Budget Update Budget Reductions and Revenue Enhancements Public Hearing

Information Item Wednesday, May 11, 2011 Updated

Presentation Items

1. What Has Happened to Our State And Federal Funding Over The Last Four Years?

2. How Have We Addressed The Deficits?

3. Challenges: Impact of No Election

4. Specific Challenges and Recommendations

5. Public Hearing

6. Next Steps

2

Revised

3

Section 1. What has happened to our State funding over the years?

4

1. What has happened to our state funding over the last four years? Change in Base Revenue Limit Since 2007-08

• The District has lost $2,791 per ADA in deficit factors from 2008-09 through 2010-11. This is

equivalent to over $87 million in revenue loss during this 3 year period.

• The District lost an addition $253 per ADA of one time funds in 2009-10 which is equivalent to an additional $7.8 million (on top of the $87 million).

2006-07 Base Revenue Limit per ADA

5,533.822007-08 Base Revenue Limit per ADA



6,376.82

Plus: 2007-08 COLA 4.53% 252.00

Plus: 2008-09 COLA 5.66% 329.00

Plus: 2009-10 COLA 4.25% 262.00

Plus: 2010-11 COLA -0.39% (25.00)

Plus:Estimated 2007-08 Equalization

0.00Plus:Estimated 2008-09 Equalization



0.00

2007-08 Base Revenue Limit per ADA




6,351.82

Less: Less: Less: Less:

Deficit factor 0 Deficit factor 7.844% (479.65) Deficit factor 18.3555% (1,170.50) Deficit factor 17.9630% (1,140.98)

0.000% 7.84400% 0.92156 18.35550% 0.81645 17.96300% 0.82037

Other Revenue Adjustment 0.00


Other Revenue Adjustment (252.99)


5,785.82 5,635.17 4,953.33 5,210.842010-11 Deficited Base Revenue Limit per ADA

2009-10 Deficited Base Revenue Limit per ADA



2007-08 2008-09 2009-10 2010-11

5

1. What has happened to our State funding over the last four years?

Deficit Factor Reductions from 2008-09 through 2010-11

Loss of Funding

Per ADAFremont USD

P-2 ADALoss of Funding for

Fremont USD

2007-08 0.00 30,690 0

2008-09 (479.65) 30,964 (14,851,774)

2009-10 (1,423.46) 31,086 (44,249,532)

2010-11 (1,140.98) 31,396 (35,822,127)

Total Actual Funding Loss (94,923,433)

The Deficit Factor reductions have resulted in a revenue limit loss to the District of approximately $95 million in a 3-year period, or about $31.6 million per year since 2008-09. In other words, if there had been no deficit factors nor the one-time revenue limit adjustment, the District would have received about $95 million

more in revenue during this 3-year period.

Revised

6

Fiscal Year 2007-08 2008-09 2009-10Statory Revenue Limit per ADA5,796.91 6,125.91 6,386.91Funded Revenue Limit per ADA5,796.91 5,645.39 5,214.59

Statutory Revenue Limit per ADA Deficit Factor

Revenue Limit Adjustmets

Funded Revenue Limit

per ADA

Loss of Funding Per

ADA

2007-08 5,785.82 0.000% 0.00 5,785.82 0.00

2008-09 6,114.82 7.844% 0.00 5,635.17 (479.65)

2009-10 6,376.82 18.355% 252.99 4,953.36 (1,423.46)

2010-11 6,351.82 17.963% 0.00 5,210.84 (1,140.98)

2011-12 6,457.90 19.608% 349.00 4,842.63 (1,615.27)

$5,785.82

$6,114.82

$6,376.82 $6,351.82$6,457.90

$5,785.82

$5,635.17

$4,953.36

$5,210.84

$4,842.63

$4,500

$4,900

$5,300

$5,700

$6,100

$6,500

$6,900

Reven

ue L

imit

Per A

DA

Statory Revenue Limit per ADA Funded Revenue Limit per ADA Total Loss of Funding

$1,423.46 per ADA

$479.65 per ADA $1,140.98

per ADA$1,615.27 per ADA


Change in Base Revenue Limit Since 2007-08 with Projected $349 Reduction in 2011-12

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

7


Change in Base Revenue Limit Since 2007-08 with Projected $844 Reduction in 2011-12





per ADA

Loss of Funding Per

ADA

2007-08 5,785.82 0.000% 0.00 5,785.82 0.00

2008-09 6,114.82 7.844% 0.00 5,635.17 (479.65)

2009-10 6,376.82 18.355% 252.99 4,953.36 (1,423.46)

2010-11 6,351.82 17.963% 0.00 5,210.84 (1,140.98)

2011-12 6,457.90 19.608% 844.00 4,347.63 (2,110.27)

$5,785.82

$6,114.82

$6,376.82 $6,351.82$6,457.90

$5,785.82$5,635.17

$4,953.36$5,210.84

$4,347.63$4,250

$4,650

$5,050

$5,450

$5,850

$6,250

$6,650

Reven

ue L

imit

Per A

DA


$1,423.46 per ADA

$479.65 per ADA $1,140.98

per ADA

$2,110.27 per ADA

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

8

History of Revenue Limit Deficit Factors

1994-95 -11.0100%

2000-01 0.0000%

2001-02 0.0000%

2002-03 0.0000%

2003-04 -3.0020%

2004-05 -2.1430%

2005-06 -0.8920%

2006-07 0.0000%

2007-08 0.0000%

2008-09 -7.8440%

2009-10 -18.3550%

2010-11 -17.9630%

2011-12 -19.6080%

Deficit Factor The percentage by which an expected allocation of funds to a school district or county office of education is reduced. The State may apply deficit factors to revenue limits and categorical programs when the State appropriation is insufficient based on the funding formulas specified by law.

1. What has happened to our State funding over the last four years? Deficit Factor History

Section 2. How have we addressed the deficits?

9

10

2. How have we addressed the ongoing deficits? Revenue Enhancements and Budget Reductions

The District has made several Tier III Reductions and Unrestricted General Fund (UGF) Revenue Enhancements. Some of these include reductions to the following Tier III programs: Adult School Reductions Secondary Class Size Elimination Deferred Maintenance Art & Music Block Grant Instructional Materials Adoption Deadlines Delayed Others noted on the following page

The District has also implemented ongoing percent contributions

from Tier III programs to the UGF

Other Reductions and UGF Revenue Enhancements Routine Restricted Maintenance Account (RRMA). Reduced contributions

from 3% to approximately 2.5% (in 2010-11)

Other Reductions Increased Grade K-3 Class Size Transportation Operations and Grounds Custodial

11

Board Approved Tier III Amount

One-Time or

Ongoing**

Tier III - Art & Music Block Grant Yes $437,000 Ongoing

Tier III - Adult School Reductions Yes $1,500,000 Ongoing

Tier III - Secondary CSR Elimination Yes $1,400,000 Ongoing

Tier III % Contribution / Tier III Multiple Accounts Yes $494,758 Ongoing

Tier III - Deferred Maintenance Yes $200,000 Ongoing

Flexibility - Routine Restricted Maintenance (RRMA) $845,000 Ongoing

Flexibility - IMFRP $1,000,000 Ongoing

Flexibility - Increase Grade K-3 Class Size 28:1 $3,794,760 Ongoing

Operations & Grounds Department Reductions $215,756 Ongoing

Custodial Reductions $251,070 Ongoing

Elementary Transportation Reduction $122,000 Ongoing

Subtotal $10,260,344

Negotiated

FUDTA, SEIU, FSMA, CSEA 3.21% WYR $6,015,919 1-Time *

Supt. and Asst. Supts. 5% WYR $45,080 1-Time *

FUDTA Schedules B,C,D,E $200,000 1-Time *

Elementary PREP reduced by 50% $3,000,000 1-Time *

Subtotal $9,260,999

Total $19,521,343

2. How have we addressed the ongoing deficits? Revenue Enhancements and Budget Reductions

12

Section 3. Challenges: Impact of No Election

Revised

13

The following assumes (1) $349 per ADA Revenue Limit Loss, (2) MOUs Expire on June 30, 2011 and (3) Tax Initiative Fail or No Tax Initiatives.

In the current 2010/11 year, the Administration has implemented expenditure delays to help minimize the amount of required reductions.

The Administration is analyzing DO discretionary multi-year budgets and making adjustments where appropriate.

*Based on Governor Brown’s 2011-12 January State Budget with no Tax Extensions, $349 per ADA loss, Measure K PT revenue at $3.3 Million **$9.3 Million MOUs expire on June 30, 2011 (see slide 11), Librarians, LMTs, and Counselors funded by ARRA Funds added back to UGF

(In $ Millions) Actual Projected Projected Projected

Major Category 2009/10 2010/11 2011/12 2012/13

Revenues/Sources * $185.9 $195.1 $186.3 $191.0

Expenditures / Uses ** $191.9 $192.5 $205.9 $209.3

Surplus (Deficit) ($6.0) $2.6 ($19.6) ($18.3)

Ending Balance $23.3 $25.9 $6.3 ($12.0)

Designated Balance (includes 2% State Mandated

Reserves, Revolving Cash Reserves, Stores, etc)$6.8 $5.9 $5.7 $5.8

Undesignated Balance $16.5 $20.0 $0.6 ($17.8)

3. Challenges: Impact of Election vs. NO Election Plan B –Estimated

14

3. Challenges: Impact of Election vs. NO Election Plan C – Estimated

*Based on Governor Brown’s 2011-12 January State Budget with no Tax Extensions, a $844 per ADA loss, Measure K PT revenue at $3.3 Million **$9.3 Million MOUs expire on June 30, 2011 (see slide 11), Librarians, LMTs, and Counselors funded by ARRA Funds added back to UGF


Major Category 2009/10 2010/11 2011/12 2012/13



Surplus (Deficit) ($6.0) $2.6 ($35.6) ($34.3)

Ending Balance $23.3 $25.9 ($9.7) ($44.0)



Undesignated Balance $16.5 $20.0 ($15.4) ($49.8)




The Administration is:

Maintaining unfilled vacant positions unless they are absolutely

necessary

Delaying discretionary purchases

Reviewing every current year 2010-11 discretionary account at the DO, and redirecting unused amounts to help balance the District’s budget (and minimize reductions)

Analyzing prior year actual expenditures for each Discretionary and Tier III account, and based on actuals, the Administration is revising multi-year budget allocations for each Discretionary and Tier III budget

15

3. Challenges: Impact of Election vs. NO Election Current Actions to Prepare…

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2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 * 2010-11

Total Unrestricted $5.9 $7.4 $10.4 $17.5 $19.4 $28.3 $23.3 $26.0

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

FUSD Total Unrestricted Ending Fund Balance

(in Millions) Amounts include 2% Reserves for Economic Uncertainties, Revolving Cash, Store, and 1-Time Dollars

* Estimated: Given recent discretionary budget adjustments, actual amount may increase to help minimize reductions.

3. Challenges: Impact of Election vs. NO Election Current Actions to Prepare: Reserves

17

$0.0

$0.0 $3.1

$6.0 $8.4

$0.7 $9.0

$9.9

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 * 2010-11

Designated SFSF(One-Time) $8.4 ARRA (One-Time) $1.7 Undesignated 1 Time $252.99 per ADA Cut (Designated)

FUSD Unrestricted Ending Fund Balance

(in Millions)

How Are Reserves Accounted and How Have They Been Used?



18

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 * 2010-11

Undesignated $0.0 $0.0 $3.1 $6.0 $8.4 $0.7 $9.0 $9.9

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

FUSD Undesignated - Unrestricted Ending Fund Balance

(in Millions)

What’s Really Left?



One-time remaining Federal Jobs Bill Funds

Must be spent by September 2012

One-time remaining SFSF General Use Funds Must be spent by September 2011

Partial Redirection of Discretionary Fund Balances –District Office Only, 2010-11 and

in the Multi-Year Budgets

Partial Redirection of Tier III Program Ending Balances

Use of Unrestricted General Fund Reserves

Use of Federal Title II Funds

One-time Mandated Cost revenue Other Incorporated Measure K Parcel Tax revenue in multi-year budgets

19


Revised

20

Section 4. Specific Challenges and Recommendations


Challenge of adopting a budget before the State does

Uncertainty regarding final State Budget

Volatility with State Budget

Assumptions need to be thoroughly assessed

Staffing commitments (March and April notices) prior to knowing final State budget

21

Mid-year cuts and other budget busters “Structural deficit” and the implications for long-term stability

Increased costs for seniority, step and column increases Increase in utilities costs Increased cost of possible borrowing due to increase in cash

deferral from State Increase in Transportation costs

Depletion of one time Federal Funds

Special Education –lack of adequate funding

Funding gap

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Recommendations

Given that currently: We have no idea what will happen with the tax extensions There are more discussions that the revenue limit loss may be much higher

than $349 per ADA We have a fiduciary responsibility and are required to submit a balanced

budget by 6/30/11

The Administration recommends:

Moving forward with budget reductions and revenue enhancements equivalent to $679 per ADA or approximately $21.3 million of ongoing revenue limit reductions

This amount is in addition to the $11 million of one-time MOUs and expenditures charged to one-time ARRA budget $9.26 million of $11 million was negotiated

23


Revised

24




*Based on Governor Brown’s 2011-12 January State Budget with no Tax Extensions, $679 per ADA loss, Measure K PT revenue at $3.3 Million **$9.3 Million MOUs expire on June 30, 2011 (see slide 11), Librarians, LMTs, and Counselors funded by ARRA Funds added back to UGF


Major Category 2009/10 2010/11 2011/12 2012/13



Surplus (Deficit) ($6.0) $2.6 ($29.9) ($28.5)

Ending Balance $23.3 $25.9 ($4.0) ($32.5)



Undesignated Balance $16.5 $20.0 ($9.7) ($38.3)

4. Specific Challenges and Recommendations Estimated Multi Year with Projected $679 per ADA Revenue Limit Loss

Deficit Spending

Revised

25

4. Specific Challenges and Recommendations Projected $679 per ADA Revenue Limit Loss





per ADA

Loss of Funding Per

ADA

2007-08 5,785.82 0.000% 0.00 5,785.82 0.00

2008-09 6,114.82 7.844% 0.00 5,635.17 (479.65)

2009-10 6,376.82 18.355% 252.99 4,953.36 (1,423.46)

2010-11 6,351.82 17.963% 0.00 5,210.84 (1,140.98)

2011-12 6,457.90 19.608% 679.00 4,512.63 (1,945.27)

$5,785.82

$6,114.82

$6,376.82 $6,351.82$6,457.90

$5,785.82$5,635.17

$4,953.36$5,210.84

$4,512.63

$4,250

$4,650

$5,050

$5,450

$5,850

$6,250

$6,650

Reven

ue L

imit

Per A

DA


$1,423.46 per ADA

$479.65 per ADA $1,140.98

per ADA

$1,945.27 per ADA

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

26

4. Specific Challenges and Recommendations Recommendations: Revenue Enhancements

Recommendations One-Time Solutions –Assuming $679/ADA Revenue Limit Loss Starting in 2011-12

One-time Reserves: Use remaining one-time Federal Jobs Bill Funds in 2011-12

$5.8 Million of Unrestricted General Fund expenditure reductions Expenditures would be transferred to the restricted side of the budget

One-time Reserves: Use remaining one-time ARRA-SFSF General Use Funds by

June 30, 2011 $2.45 Million of Unrestricted General Fund expenditure reductions Expenditures would be transferred to the restricted side of the budget

Undesignated Reserve: Use Undesignated GF Reserves over a 4 year period

Redirect Funds. Redirect some Tier III Program Ending Balances

Approximately $1.2 million over what was already redirected about 10 months ago

Revised

Recommendations One-Time Solutions-- Assuming $679/ADA Revenue Limit Loss Starting in 2011-12

Redirect Expenditures: Use Federal Title II Funds

$600K in 2011-12 Requires additional board action

Redirect Funds: Redirect Adult Education Tier III revenue

An additional $500,000

Redirect Funds: Redirect unspent District Office discretionary accounts

Spending Freeze: Implement spending freeze in 2011-12

27

4. Specific Challenges and Recommendations Recommendations: Revenue Enhancements

Revised

28

Recommendations Through 2013-14 Assuming $679/ADA Revenue Limit Loss Starting in 2011-12 Pursue the feasibility of Salary reductions for all bargaining units in the multi-year budget and/or Extend MOU that expires in June 2011, Negotiable, Approximately $9.2

million

For each 1% salary reduction applied to all units Approximately $1,406,448 in UNRESTRICTED expenditure reductions:

FUDTA: $1,070,383

SEIU: $88,771

CSEA: $115,461

FSMA: $125,134

Senior Management: $6,699

4. Specific Challenges and Recommendations Recommendations: Expenditure Reductions

Revised

29

Recommendations Through 2013-14 Assuming $679/ADA Revenue Limit Loss Starting in 2011-12 Pursue salary reductions for all bargaining units

For each 1% salary reduction applied to all units

Approximately $467,670 in RESTRICTED expenditure reductions:

FUDTA: $249,968

SEIU: $44,157

CSEA: $145,605

FSMA: $25,623

Senior Management: $2,317


Revised

30

Recommendations Through 2013-14 Assuming $679/ADA Revenue Limit Loss Starting in 2011-12 Increase Grades K-3 Class Size

K-3 class sizes have been budgeted at 28:1 in 2010-11, however, the majority of the classes are actually at 26:1

For 2011-12 through 2013-14 Staff classes at 30:1

Estimated annual savings is $1.4 million

No Change: Maintain Grades 4-6 at Current 30:1 Class Size Currently, grades 4-6 are staffed at 30:1 No additional savings


Revised

31

Recommendations Through 2013-14 Assuming $679/ADA Revenue Limit Loss Starting in 2011-12

Increase Grades 7-12 Class Size

Currently, Grades 7-12 are staffed at 28:1 For 2011-12 through 2013-14, increase class size by an average of 2

students making the ratio to 30:1 Estimated annual savings of $2.6 Million


Revised

32

4. Specific Challenges and Recommendations Summary of Recommendations: Expenditure Reductions

Estimated 2011-12 Structural Deficit $29,900,000 (Slide 24)

Reserves: Use Reserves/One-Time Funds, Board Action Required Total 2010-11 Use remaining ARRA-SFSF * $2,450,000 Redirect Unused Discretionary Funds in 2010-11 $2,000,000 Redirect 2010-11 Tier III Funds $1,200,000 Re-direct Adult Education Funds $ 500,000 2011-12 Use remaining Federal Jobs Bill – to be used in 2011-12 $5,800,000 Use Undesignated Ending Balance Over a 4-5 year period $4,000,000** Total: $15,950,000***

* To be used to make unrestricted expenditure transfer **Given the ongoing State Budget volatility, and to help protect the District from future crisis, amount noted is over a 5 year period. *** Expenditures would be reduced and revenues would be increased by about $15.95 million over this two year period. This one-

time action would help balance the multi-year budget through 2013-14.

New Assuming $679/ADA Revenue Limit Loss Starting in 2011-12

33

Estimated 2011-12 Structural Deficit $29,900,000 (Slide 24)

On-Going Funds Through 2013-14, Board Action Required Increase Grade K-3 Class Size 30:1 (with 93%-94% efficiency) $ 1,441,000 Increase Grade 7-12 Class Size to 30:1 $ 2,668,000 Revise and reduce Multi-Year Discretionary Accounts TBD Revise Multi-Year Use Federal Title II Funds $ 600,000 Total: $ 4,709,000 + TBD Negotiable Total Elementary PREP Reduction – 100% $ 6,000,000 District-Wide Pay Cut (4%) $ 5,626,000 + TBD District-Wide Work Year Reduction (5 Days) $ 3,761,000 + TBD Other Negotiable TBD

Total: $15,387,000 + TBD

Estimated Potential Budget Solutions: $36,046,000 + TBD

4. Specific Challenges and Recommendations Summary of Recommendations: Expenditure Reductions Assuming $679/ADA Revenue Limit Loss Starting in 2011-12 New

34 34

Other Ongoing Recommendations Being Analyzed Implement future spending freeze

Analyze multi-year discretionary accounts and make adjustments as

necessary Consider increasing facility use fees beginning in January 2012 (to

provide sufficient notification and planning to facility users)

Other items would require negotiations with collective bargaining groups

4. Specific Challenges and Recommendations Recommendations: Expenditure Reductions Assuming $679/ADA Revenue Limit Loss Starting in 2011-12 New

5. Public Hearing

35

New

Board of Education, Conduct Public Hearing May 11

Board of Education, Provide direction to staff regarding

reductions to pursue May 11

Administration, Makes recommendations regarding budget

reductions and revenue enhancements for Board action May 25

36

6. Next Steps

fremont unified school district · 2018-09-05 · revenue enhancements and budget reductions . 12 ....

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