impact of the state adopted budget
DESCRIPTION
Impact of the State Adopted Budget. Board Study Session March 9, 2009. Prepared by: Dr. Cathy Nichols-Washer Mr. Douglas Barge & Staff. Y: Business Services/Budget/2009/10//Adopted/Meetings/B03-09-09/Template for Presentation B03-09-09. Executive Summary. - PowerPoint PPT PresentationTRANSCRIPT
Impact of the State Impact of the State Adopted Budget Adopted Budget
Board Study SessionMarch 9, 2009
Prepared by: Dr. Cathy Nichols-Washer Mr. Douglas Barge & StaffY: Business Services/Budget/2009/10//Adopted/Meetings/B03-09-09/Template for Presentation B03-09-09
Executive Executive SummarySummary
The State has adopted budget plans for the remainder of 2008/09 and all of 2009/10
Does that mean all of the work is done at the State level– Probably not
The current State plan has more flexibility than we had seen in prior proposals
– Our strategies will take advantage of these opportunities– We will develop strategies to maximize the use of the Federal stimulus
resources when they arrive
Balancing the budget for 2009/10 will still require expenditure reductions of $9,450,332
– This is in addition to the cuts already approved by the Board
We must remain mindful of the structural balancing of our budget– The excessive use of one time solutions will be necessary
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Table of Table of ContentsContents
DESCRIPTIONDESCRIPTION Page #Page #
A.A. IntroductionIntroduction
B.B. What Have We DoneWhat Have We Done
C.C. Organizing the SolutionOrganizing the Solution
D.D. Redefining the Budget ProblemRedefining the Budget Problem
E.E. Restricted (Categorical) Program CutsRestricted (Categorical) Program Cuts
F.F. Moving Towards a Balanced Budget for Moving Towards a Balanced Budget for 2009/102009/10
G.G. Cash Flow & How it is ChangingCash Flow & How it is Changing
H.H. RecommendationsRecommendations
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11
22
33
4 – 84 – 8
9 – 159 – 15
16 – 2116 – 21
22 – 2522 – 25
2626
IntroductionIntroductionOn March 3, staff reported on the latest information coming to the On March 3, staff reported on the latest information coming to the District about the newly adopted State budget for the remainder of this District about the newly adopted State budget for the remainder of this year and all of nextyear and all of next
Staff will report on the estimated impact to the Lodi Unified School Staff will report on the estimated impact to the Lodi Unified School DistrictDistrict
An overall strategy is being developed for balancing the District’s An overall strategy is being developed for balancing the District’s budget over the coming monthsbudget over the coming months
The strategy will take advantage of both the State flexibility and The strategy will take advantage of both the State flexibility and Federal stimulus resourcesFederal stimulus resources
Setting the stage this year will be critical to the financial success of the Setting the stage this year will be critical to the financial success of the District now and into the futureDistrict now and into the future
1
What Have We What Have We Done?Done?
Withheld final apportionments for restricted (categorical) programs where possible
Placed COLA increases into reserve accounts pending final legislative reaction to the State’s fiscal crisis
Asked all site/departments to reduce spending
Began reviewing expenditures in much greater detail, questioning those that might be put off until later to preserve cash
Reviewing contract terms for changes that might help the District
2
Gathered massive amounts of community and employee input
The Superintendent’s Budget Advisory Committee is working on recommendations for the Superintendent
Organizing the Organizing the SolutionsSolutions
3
Problem & Solutions?Problem & Solutions?
INCOMEINCOME EXPENSEEXPENSE
UnrestrictedUnrestricted
RestrictedRestricted
One-timeOne-time
OngoingOngoingUnrestrictedUnrestricted
RestrictedRestricted
One-timeOne-time
OngoingOngoing
Redefining the Redefining the Budget ProblemBudget Problem
iii
Previously Previously ReportedReported
4
A. Balances Reported on 1/13/09 ($13,286,387) ($19,670,660)($6,384,273)
Description On-Going TotalOne-Time
B. Additional Income (Special Ed.) 373,371
C. Additional Income Loss (2.52%) (4,418,661)
D. Total Reduction Required ($17,331,677) ($23,715,950)($6,384,273)
373,371
(4,418,661)
Unrestricted General FundUnrestricted General Fund
Fiscal Year Fiscal Year BreakdownBreakdown
5
III. Total Reduction Required ($17,331,677) ($23,715,950)($6,384,273)
Description On-Going TotalOne-Time
I. 2008/09 Fiscal Year $3,503,883 ($6,372,549)($9,876,432)
II. 2009/10 Fiscal Year (9,888,156) (17,343,401)(7,455,245)
Unrestricted General FundUnrestricted General Fund
2008/092008/09 What Has What Has Changed?Changed?
6
Description On-Going TotalOne-Time
I. 2008/09 Fiscal Year $3,503,883 ($6,372,549)($9,876,432)
II. Income Changes
$4,013,142$4,013,142 A. Base Revenue Limit(500,000)(500,000) B. Interest Income
($1,116,004) (1,116,004) C. Planned Sweeps
($1,116,004) $2,397,138$3,513,142 D. Total Income Changes
III. Expense Changes
($4,435,266) ($5,060,266)($625,000)A. Second Interim
($4,435,266) ($5,060,266)($625,000)B. Total Expense Changes
$6,823,145 $1,084,855($5,738,290) IV. Total Revised Estimate
2009/102009/10 What Has What Has Changed?Changed?
7
Description On-Going TotalOne-Time
I. 2009/10 Fiscal Year ($9,888,156) ($17,343,401)($7,455,245)
II. Income Changes
$2,246,147$2,246,147 A. Base Revenue Limit
$0 $2,246,147$2,246,147 B. Total Income Changes
III. Expense Changes
($ 80,287) ($ 80,287)A. Staff Reductions138,526138,526B. Utilities/Trans. Fuel
$4,156 $ 66,551$ 62,395 E. Total Expense Changes
($9,892,312) ($15,163,805)($5,271,493) IV. Total Revised Estimate
4,1564,156C. Routine Rest. Maint.$4,156 4,156D. General Reserves
Summary Revised Summary Revised EstimatesEstimates
8
Description On-Going TotalOne-Time
I. 2008/09 Fiscal Year $6,823,145 $1,084,855($5,738,290)
(9,892,312) (15,163,805)(5,271,493) II. 2009/10 Fiscal Year
($3,069,167) ($14,078,950)($11,009,783)III. Total Revised Estimate
Unrestricted General FundUnrestricted General Fund
* Note Structural Balance
Restricted (Categorical ) Restricted (Categorical ) Programs CutsPrograms Cuts
v
Tier ITier I – – NoNo Funding Funding CutsCuts
No program flexibility & No ability to waive statutory requirements
Programs are:
1. Economic Impact Aid (EIA)
2. K-3 Class Size Reduction
3. Prop 49 After School Programs (Bridge)
4. Special Education
5. Quality Education Investment Act (QEIA)
6. Transportation
7. Child Nutrition
8. Child Development
9
Description
Tier IITier II – Funding – Funding CutsCuts
Funding will be reduced 15.38% in 2008/09 & 4.46% in 2009/10
No current year or future flexibility
Programs current available to Lodi USD:
1. Ag – Vocation Education (Lodi High)
2008/09
($3,851)
(1,372)
(59,946)
(40,219)
($101,388)
2. Ag – Vocation Education (Tokay)
3. English Language Acquisition Program
4. Partnership Academies
5. Total Tier II
10
2009/10
($945)
(337)
(13,483)
(10,115)
($24,880)
Description
Tier IIITier III – Funding – Funding CutsCuts
Funding will be reduced 15.38% in 2008/09 & 4.46% next year
Up to 100% flexibility is permitted
Programs will be cut:
2007/08 End Fund Balances from most programs may be swept
($2,439,491)
11
2008/09 2009/10
($581,818)
Description
* General Fund Programs only
All Categorical All Categorical Funding CutsFunding Cuts
1. Tier I
2008/09
($0)
(101,388)
(2,439,491)
($2,937,844)
2. Tier II
3. Tier III
5. Total Restricted Program Cuts
12
2009/10
($0)
(24,880)
(581,818)
($704,108)
Description
(396,965)4. Other Funds (97,410)
K-3 Class Size K-3 Class Size ReductionReduction
20.5 No Penalty
21.0 5.0%
21.5 10.0%
22.0 15.0%
25.0 20.0%
Over 25.0 30.0%
21.9 10.0%
Student/Teacher
New
No Penalty?
20.0%
40.0%
80.0%
PriorUp To
* Funding will be based on a class size of 20 students. District would not receive any funding for excess students.
$0
$702,576
$865,368
$2,230,893
$3,170,160
$4,129,776
$1,456,560
Funding Loss
13
Categorical Categorical SweepsSweeps
2007/08 Ending Fund Balances from “some” categorical programs is permitted to be swept by the State:
1. Tier I
2. Tier II
3. Tier III
4. Other Categorical Programs
5. Total Carryover Sweeps
14
June 30, 2008
($0)
(572,295)
(4,080,749)(1,605,571)
($6,258,615)
Descriptions
Other FlexibilityOther FlexibilityAdult Education
– 15.38% cut in 2008/09 resulting a loss of $228,347– The same 4.46% cut, as other restricted program, in 2009/10 for another hit
of $56,033– There is provisions for 2.50% growth if funding is available
Routine Maintenance Reserves
– Only required to set aside 1% vs. 3% of the General Fund• For 2008/09• Next Four years• Program would have to be built back up over time
Deferred Maintenance
– No local contribution required (0.5%) for 2008/09– Next Four years
15
Moving Towards a Moving Towards a Balanced Budget for Balanced Budget for 2009/102009/10
iv
16
Closing the Final Closing the Final GapGap
The Resource vs. Expense gap can be closed considerably using:
– Categorical flexibility– Increased funding to the base revenue limit– Previously approved reductions
The remaining gap will have to be eliminated using budget reductions
– Those reduction will be presented to the Board after the Superintendents Budget Advisory Committee and Administrative team have completed their recommendations
Categorical Categorical Program StrategyProgram Strategy
17
Categorical Categorical Operations
2009/10 Reductions
2008/09 Reductions
Flexibili
ty
A Possible A Possible StrategyStrategy
New Resources
Unrestriced General Fund
Flexibility
Board Action
Additional
Cuts
18
New
Res
ourc
es
Board ActionU
nres
tric
ted
Gen
eral
Fun
d
Add
ition
al C
uts
Flexibility
Moving Towards a Moving Towards a Balanced BudgetBalanced Budget
19
Description On-Going TotalOne-Time
I. 2008/09 Fiscal Year $6,823,145 $1,084,855($5,738,290)
II. Income Options
$1,883,878 $2,408,989$525,111 A. Categorical Flexibility
271,523 271,523 B. Other Flexibility
$2,155,401 $2,680,512$525,111 C. Total Income Options
III. Expense Options
A.
$0 $0$0 B. Total Expense Options
$8,978,546 $3,765,367($5,213,179) IV. Total 2008/09 Fiscal Yr.
Moving Towards a Moving Towards a Balanced BudgetBalanced Budget
20
Description On-Going TotalOne-Time
I. 2009/10 Fiscal Year ($9,892,312) ($15,163,805)($5,271,493)
II. Income Options
$ 123,442$123,442 A. Categorical Flexibility
$0 $ 123,442$ 123,442 B. Total Income Options
Moving Towards a Moving Towards a Balanced BudgetBalanced Budget
21
Description On-Going TotalOne-Time
I. 2009/10 Fiscal Year (cont.)
($311,629)($311,629)A. Workers Comp. Rate
III. Expense Options
($1,000,000) (1,000,000) D. Capital Projects Res.
($1,000,000) ($1,824,664)($824,664)E. Total Expense Options
($8,892,312) ($13,215,699)($4,323,387) IV. Total 2009/10 Fiscal Yr.
(161,305)(161,305)B. Site Supply COLA
(351,730)(351,730)C. Teacher Staffing Res.
Summary Revised Summary Revised EstimatesEstimates
22
Description On-Going TotalOne-Time
I. 2008/09 Fiscal Year $8,978,546 $3,765,367($5,213,179)
(8,892,312) (13,215,699)(4,323,387) II. 2009/10 Fiscal Year
$ 86,234 ($9,450,332)($9,536,566)III. Total Revised Estimate
Unrestricted General FundUnrestricted General Fund
Note the structural out of balance!Note the structural out of balance!
Cash Flow & How it is Cash Flow & How it is ChangingChanging
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Cash Flow Problems Cash Flow Problems ContinueContinue
23
•July Revenue Limit was deferred to September
2008/09 Fiscal Year
•A significant amount of the July & August apportionments will be deferred to October
2009/10 Fiscal Year
•January apportionment did not get deferred
•February Revenue Limit & K-3 CSR will get deferred to July
•Half of the February Revenue Limit & K-3 CSR will get deferred to July
* These are on-going changes* These are on-going changes
Revenue Limit Revenue Limit ApportionmentsApportionments
24
0%2%4%6%8%
10%12%14%16%18%
Original 2008-09 2009-10
1st
Ouch!
Royal
Pain!
2nd
Ouch!
Cash Flow Changes Cash Flow Changes ContinueContinue
($30,000,000)
($20,000,000)
($10,000,000)
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
July
Aug.
Sept. Oct.
Nov.
Dec. Jan.
Feb.
Mar.Ap
ril MayJu
ne
1st Interim No State Action Governor 12/31/08 Revised 2008/09 Adopted for 2009/10
25
Instructional Instructional Materials FundMaterials Fund
26
Under the current strategy this Tier III program will not be swept
The program carried over $2,922,586 into this year and retains a current balance of $2,898,261 at this time
Even with the Tier III reductions the program will have no problems with the estimated $300,000 of costs for adoptions in:
Geometry
Pre-Calculus
Algebra II
RecommendatRecommendationsions
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Onward & Onward & UpwardUpward
RecommendationsRecommendations– Expand the use of Tax/Revenue Anticipation Notes (TRANS) to
support the cash flow needs of the District
– Use the State authorized flexibility and carryover sweeps where possible to support unrestricted District operations
– Strategize the use of Federal stimulus (Title I) resources to support District class size reduction efforts
– Strategize the use of Federal stimulus (IDEA) resources to reduce the need for further reductions and staff cuts
– Take another look at the decline in student enrollment
– Continue the process of developing a balance budget plan for 2009/10
27
Good NewsGood News
We still have a heart beat
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AppendixAppendixA. Tier III Funding Cuts
ix
Tier IIITier III – Funding – Funding CutsCuts
Funding will be reduced 15.38% in 2008/09 & 4.46% next year
Flexibility is permitted
Programs are:
1. CSR 9th Grade
4. GATE
* Not continued into 2009/10* Not continued into 2009/10
($54,662)
2. Deferred Maintenance
3. Instructional Materials Fund
5. High Priority Schools & II/USP (*)
(168,618)
(320,249)
(40,165)
(68,472)
A1
2008/09 2009/10
($13,413)
(41,377)
(78,585)
(9,856)
Tier IIITier III – Funding – Funding CutsCuts
Programs are (continued):
6. Instructional Improvement Block Grant
7. Teacher Credentialing Block Grant
8. Professional Development Block Grant
9. Pupil Retention Block Grant
10.School Safety Consolidated (C. Wash.)
11.School & Library Improvement (SIP)
12.Administrator Training Program
13.Adult Education
14.Arts & Music Block Grant
(34,397)
(70,091)
(186,353)
(35,277)
(72,669)
(325,610)
(14,765)
(228,347)
(81,268)
A2
(8,441)
(17,199)
(45,729)
(8,657)
(17,832)
(79,900)
(3,623)
(56,033)
(19,942)
2008/09 2009/10
Tier IIITier III – Funding – Funding CutsCuts
Programs are (continued):
15.California High School Exit Exam (Interv)
16.Certificated Staff Mentoring Programs
17.Child Oral Health Assessment
18.Community Based Eng Tutoring (CBET)
19.Community Day Schools
20.Counselors, Grades 7-12 (SB 1802)
21.National Board Certification
22.Peer Assistance and Review
23.Regional Occupational Center/Programs
(12,454)
(994)
(664)
(10,972)
(64,782)
(37,502)
(377)
(5,310)
(68,124)
A3
2008/09 2009/10
(50,752)
(4,051)
(2,705)
(44,713)
(263,998)
(152,826)
(1,538)
(21,640)
(277,617)
Tier IIITier III – Funding – Funding CutsCuts
Programs are (continued):
26. Cal SAFE Academic & Suppt. Serv.
(19,225)
(272,545)
(7,327)
24. Specialized Sec. Prgms. – Health Care
25. Supplemental Hourly Programs
A4
2008/09 2009/10
(4,718)
(66,879)
(1,798)
27. Cal SAFE Child Care & Dev. Serv. (13,884) (3,407)
28. Alternative Credentialing (2,692) (660)
29. Total Tier III ($2,836,456) ($679,228)