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2008/09 FINANCIAL PLANNING

2008/09 FINANCIAL PLANNING. Board Meeting January 13, 2009. Prepared by: Douglas Barge. Y:Business Services/Budget/2009-10/Adopted/Reductions/Strategies for Moving Forward B01-13-09. Executive Summary.

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2008/09 FINANCIAL PLANNING

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  1. 2008/09 FINANCIAL PLANNING Board Meeting January 13, 2009 Prepared by: Douglas Barge Y:\Business Services/Budget/2009-10/Adopted/Reductions/Strategies for Moving Forward B01-13-09

  2. Executive Summary • On December 31, 2008, the Governor took the unusual step of introducing an 18 month budget plan for the Legislature to consider • His proposal has considerable negative impact on our District both this year and next • This year the problem will start with “Cash” • Next year the problem will be a budget shortfall of $19,670,660 • Work has begun on reducing expenses this year and next i

  3. Table of Contents DESCRIPTION PAGE # A1 • Introduction • Governor’s Budget Proposals • 2008/09 State Midyear Reductions • Modeling the Impact of Governors 2009/10 Budget Plans • District Budget Reduction Planning • Next Steps for Moving to Phase III • Appendix B1 – B3 C1 D1 – D8 E1 F1 ii

  4. Lodi Unified School District Introduction Status • It’s worse • Still declining • Done • Good, if we had cash • Now it’s time to stop • Bad news, we were right In November • We reported that the economy was in poor shape • Student enrollments were significantly below projections • The Board also asked for additional studies and reporting • Our cash investments were reported to be in good hands • We talked about the need to slow down expenditures • The State was supposed to be working on fixing their budget problem. We predicted they would not be successful A1

  5. $1.1B Owed 2002/03 & 2003/04 Fiscal Years Prop 98 Funding Governor ProposesRe-Benching Prop 98 Funding $1.1 B of expenses 2008/09 Fiscal Year 2009-10 Fiscal Year Prop 98 Funding After Redesign. Prop 98 Funding Currently *Net result is a permanent loss in on-going funding B1

  6. Governor’s Budget Proposal • Even more deferred cash payments • The State has no time to generate cash this year • There are problems with Revenue Anticipation Warrants (RAWs) – I.O.U.s B2

  7. Cash Flow - Doomsday B3 State Controller John Chiang – 12/22/08, “State will run out of cash in less than 70 days”

  8. 2008/09State Mid-Year Reductions C

  9. A. Structural Balancing (Prior) ($2,167,436) $2,167,436 ($9,876,432) $3,503,883 ($6,372,549) D. Total Overall 2008/09 Balancing One- Time On- Going Description Total B. Funding Sources/Uses (*) ($6,865,112) (8,201,559) 1,336,447 C. Funding Uses (*) 492,563 492,563 * See the Appendix for further details. C1

  10. Modeling the Impact of Governors 2009/10 Budget Plans D

  11. 2009/10 Enrollment Projections 2008/09 CBEDS (*) PROJECTED STUDENTS GROWTH ADA A. PROGRAMS 15,354 1. Regular K-6 15,122 (232) (220) 2. Regular 7-8 4,262 4,235 (27) (25) 7,961 7,787 (174) (160) 3. Regular 9-12 4. All Other Programs 2,071 2,071 5. Serna Charter School 297 297 6. Total K-12 Increases 29,945 29,512 (433) (405) * Enrollment as of October 2, 2008 D1

  12. 1. Teacher Staffing (19.15) ($1,538,993) 2. Special Ed. Staffing (Cert. & Class.) (5.66) (315,303) 3. Custodial Support & Bus Drivers (115,953) (2.47) 4. Site Clerical, Noon Duty & Campus Supv. (1.44) (51,220) 6. Total Growth Expenses ($2,050,768) (28.72) 5. Per-Pupil Allocations (29,299) Summary of Growth Expenses(There is declining enrollment this year) DESCRIPTION F.T.E BUDGET D2

  13. 1. Projected Step & Column Costs 2. Health & Welfare - Retiree $2,600,000 194,403 3. Utilities & Fuel 595,162 8. Re-Instate K-6 Teacher Reserve 7. Lockeford K-8 Conversion 458,328 218,378 3.00 6.50 4. Worker’s Compensation - .25% Increase 311,629 6. Supply Inflation – School Sites 161,305 5. Technology Maint. Agree. & New Systems 200,000 9. Re-Instate 7-12 Teacher Reserve 10. Routine Rest. Maintenance – 3% 4.00 245,133 124,007 11. Total On-Going Expenses $5,108,345 13.50 Summary of On-Going Expenses Descriptions F.T.E BUDGET D3

  14. 1. Construction – Replenish AB87 2. New Student Information System 3. General Reserve Requirement (3%) $1,000,000 200,000 124,007 -0- 4. Total One-Time Expenses $1,324,007 Summary of One-Time Expenses Descriptions F.T.E BUDGET D4

  15. C. One-Time Costs 1,324,007 A. Increased Mandatory Costs $5,108,345 13.50 (28.72) B. Growth Costs (2,050,768) D.Total Estimated Uses (15.22) $4,381,584 Summary of Increased Costs Description F.T.E Budget D5

  16. A. Net Growth Income ($2,217,699) B. Special Education Growth (220,198) F. Unrestricted Ending Fund Balance (6,372,549) G.Total Estimated New Income ($9,334,626) Estimate of Growth Income ( There is declining enrollment this year) Description Budget C. Class-Size Reduction – Grades K-3 (175,175) D. Interest Income (300,000) E. Lottery Income (49,005) D6

  17. $944,360 1. 08/09 Teachers Above Formula $944,360 2. Shock Absorbers from 08/09 1,312,283 $1,312,283 1,665,339 1,665,339 3. Superintendent’s Proposed Reductions within the JAESC (*) 4. Total Funding Sources $2,609,699 $3,921,982 $1,312,283 Other Funding Sources ONE- TIME ON- GOING Descriptions TOTAL * Unrestricted Reductions only D7

  18. A. Structural Balancing (Prior) ($9,876,432) ($9,876,432) B. Funding Sources/Uses (13,716,210) (6,019,654) ($7,694,556) C. Other Sources 2,609,699 1,312,283 3,921,982 Overall Balancing One- Time On- Going Description Total D. Total ($6,384,273) ($13,286,387) ($19,670,660) D8

  19. Phases for Budget Reduction Planning E

  20. Steps for Budget Planning Description • Phase I – Budget Reduction Plan for JAESC • Phase II – Brainstorming and Recommendation development • Administration • Superintendent’s Budget Advisory Committee • Phase III – Superintendent’s Recommendation to the Board • Phase IV – Board Approves a Plan E1

  21. Next Steps for Moving to Phase II • Administration will continue to work on developing recommendations • Superintendent’s Budget Advisory (SBAC) begins working on the brainstorming list • SBAC completes Phase II • We need to remember we have a $19,670,660 budget problem and will run out of “Cash” this year if we don’t take action now on things that we can control F1

  22. THE END iii

  23. Appendix • District Enrollment Trends • 2008/09 Financial Details iv

  24. District Enrollment Trends 1

  25. Elementary Enrollment 2

  26. Middle School Enrollment 3

  27. High School Enrollment 4

  28. 1. COLA Reserve – 0.68% ($800,463) 2. Teacher Staffing Reductions - Unused (0.68) (55,387) 3. Developer Fee Funded Positions 4.20 363,287 3.52 4. Total On-Going Expenses ($492,563) Summary of On-Going2008/09 Expenses Descriptions F.T.E BUDGET 5

  29. ($7,401,096) 1. Revenue Limit Reduction – Est. 4.5% ($7,401,096) 2. 08/09 COLA Reduction – 0.68% (800,463) (800,463) c. Transportation g. Lottery (Non-Prop 20) b. EIA a. AB825 Block Grants f. K-3 Class Size Red. d. School Safety e. Special Education (228,176) (33,779) 278,598 482,398 474,467 333,725 29,214 29,214 482,398 333,725 (228,176) $278,598 (33,779) 474,467 4. Total Funding Sources ($8,201,559) ($6,865,112) $1,336,447 Other 2008/09 Funding Sources ONE- TIME ON- GOING Descriptions TOTAL 3. State Categorical Reserves (6.50%) 6

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