Budget Committee June 10, 2010

1. Budget Committee June 10, 2010 Jim Langstraat Chief Financial Officer 503-353-6021 langstraat@nclack.k12.or.us

2. Welcome • I think a hero is an ordinary individual who finds strength to persevere and endure in spite of overwhelming obstacles. Christopher Reeve

3. Budget Parameters • Support the Strategic Plan actions. • Provide essential core services to students. • Provide essential and required business and operations services. • Maintain essential operations and maintenance of facilities. • Begin to rebuild a fund balance, over time, that is at least 5% of planned expenditures. • Eliminate General Fund accruals within 4 years and move to the GAAP method of accounting.

4. Reminders • Much of this information is based on estimates and the data we have available at this point in time. • The materials presented reflect District administrations objective of delivering a balanced budget. However, collective bargaining is ongoing and expenditures may be reallocated between salaries and benefits as we conclude these negotiations. • We give thanks for the feedback we have received from the Budget Committee, staff, and community members as we have prepared this budget.

5. Enrollment • Budget built on weighted enrollment of 20,188. • Enrollment declined by 85 students in the month of May 2010 down to 17,205. This amount includes students enrolled in charter schools. • Enrollment down over 300 students from the end of September and over 200 students from the end of December. • Declining enrollment might lead to a shortfall for 2010-11 as 2010-11 funding will likely be based on 2009-10 enrollment.

6. Revenue • Budgeted at $131,975,350 for 2010-11. • $4.5 million than projected revenue for 2009-10. • Lower than 2007-08 level of funding. • Includes transfers in from Facility Grants, E-Rate, and Medicaid of $3,000,000 which will not be available for 2011-12. • State funding includes $1,917,860 of Federal Stimulus Funds which are not guaranteed beyond the 2010-11 year.

7. Expenditures • Currently based on: • $1.9 million of non salary and benefit accounts. • Reduction of over 100 staff. • Freezing salaries and granting no step movement. • The reduction of 10 instructional days and the related pay for all staff. • The restoration of days reduced from the certified and classified staff in 2009-10. • The maintenance of insurance benefits and a projected 15% increase.

8. Expenditures • Negotiations remain ongoing and could change the allocation between salaries and benefits but not the overall expenditure budget. • Expenditures are budgeted at $131,975,350 and are equivalent to revenues. • Expenditures will be nearly $8 million below 2009-10 and nearly $9.5 million below 2008-09. • Salaries budgeted at $7.5 million below 2009-10 projected and more than $11.5 million below 2008-09. • Benefits budgeted $475,000 above 2009-10 projected.

9. Expenditures • Instructional Professional Services budget decreased by $700,000. • Repairs and Maintenance budget decreased by $300,000 • Supplies and Materials budget decreased by $900,000

10. Fund Balance • Latest projection is to end the year with a fund balance of $ 2,532,268. • Reflects fund balance consistent with Generally Accepted Accounting Principles. • No budgeted change for fund balance for the 2010-11 year. • Fund balance will be 1.92% of budgeted revenues or expenditures. • Targeted level is at least 5%. • Provides minimal protection for future uncertainties.

11. Items for Ongoing Review • Changes to enrollment projections. • Changes to State Economic Revenue Forecast. • Intervention at the State or Federal level. • State budget shortfall. • Resolution of negotiations with bargaining units. • Health insurance plan and rate increases. • Pending PERS rate increase. • Loss of one-time funding sources and transfers. • Reinvestment in infrastructure (textbooks, repairs, technology, buses).

12. State & Federal Programs Detail

13. State & Federal Programs Detail

14. Debt Service Fund • Includes General Obligation bonded debt principal and interest payments of $21,915,969 funded by property tax collections. • Includes PERS principal and interest payments of $7,525,910 funded as a percentage of salaries. • Includes lease payments of $1,810,001 for past equipment purchases, primarily school buses and modular classrooms.

15. Capital Projects Fund • Includes Bond Projects budget of $30 million funded by the bond issuance and investment proceeds. • Includes non bond projects of $6,515,000. Small projects such as moving modular buildings, roof repairs, bus purchases, etc.

16. Community Services Fund • Includes Drivers Education, Facility Rental and Daycare Operations. • Budget of $1,222,504.

17. Self Insurance Funds • Includes Health Insurance and General Insurance. • Health Insurance has $35,490,000 budgeted for expenditures with a reserve balance of $3.3 million. • This fund includes contributions not only from the General Fund but from other funds such as Food Service, Title I and IDEA. It also includes the employee share of contributions and retiree payments. • General Insurance is primarily Worker’s Compensation coverage and claims and has a budget of $1.5 million

18. Trust and Agency Funds • Includes the Charter School Budgets, The Azar Land Purchase and Scholarship Fund. • Milwaukie Academy of the Arts with a budget of $557,717. • Azar Land Purchase with a budget of $2,210,931. Funded by bond with monies held in reserve per conditions of purchase agreement. • Clackamas Charter Alliance with a budget of $4,275,827. • Scholarship Fund with a budget of $230,000.

19. Important Dates • June 24-Board meeting-Board to enact resolutions adopting budget and making appropriations. • June 30-End of fiscal year. • August 25, 2010-Next Economic & Revenue Forecast released. • August 31, 2010-Unaudited financial figures available for 2009-10 fiscal year. • September 2010-Updates for budget committee, union leadership, and other interested parties.