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Underlying Assumptions: Identification and Implications

Underlying Assumptions: Identification and Implications. Financial Plan and Budget FY 2010-11. CDE’s Financial Policies and Procedures Handbook.

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Underlying Assumptions: Identification and Implications

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  1. Underlying Assumptions:Identification and Implications Financial Plan and Budget FY 2010-11

  2. CDE’s Financial Policies and Procedures Handbook • Provide a framework to assist in the formulation of an integrated plan of operations and in the understanding of how each program’s activities contribute to the goals and educational needs. • Provide a means of communication through the budget process to school district staff and community by stating the objectives of each program and allocating the funds necessary to achieve them. • Provide a means for relating anticipated costs and actual costs to designated programs. • Provide the historical data required for realistic budget preparation and related planning decisions. • Provide budgeting and reporting consistent with federal and state requirements.

  3. Implications of Underlying Revenue Assumptions • Revenues ~ State Level: • State’s fiscal health remains weak. • Many of the state’s FY 2009-10 & FY 2010-11 budget measures are one-time in nature. • State’s revenue forecasts “do not incorporate expenditure pressures resulting from rising caseloads and inflation, constitutional requirements, or budget cliffs caused when federal stimulus dollars expire. • The state is predicting a general fund revenue shortfall FY 2011-12 between $148.7 M and $579.4M. • “The General Fund shortfall will increase to the extent these factors increase pressures for additional spending.”

  4. Implications of Underlying Revenue Assumptions • Revenues ~ District Level: • Forecast of General Fund’s Total Revenues: • FY 2011-12 is $19.9M less than FY 2010-11 • FY 2012-13 is $12.6M less than FY 2010-11 • FY 2012-13 is $7.3M greater than FY 2011-12 • Total Program Funding (TPF) as % of Total: • FY11: 85.04% FY12: 84.67% FY13: 84.81% • TPF w/ existing MLO as % of Total: • FY11: 92.71% FY 12: 92.71% FY13: 92.72% • Increasing reliance upon local sources • Future MLO Election Revenues and User Fees

  5. Implications of Underlying Expenditure Assumptions • Meaning of a Pay Freeze In addition, loss of one day’s pay per quarter in FY 2011-12; no restoration in forecast period.

  6. Implications of Underlying Expenditure Assumptions • Meaning of Hiring Freeze • Growth in caseload handled by then existing staff levels • Increase in class size per teacher, for instance • Loss of SBB $ ~ The loss of $250/student in FY11 and FY12 & $50/student in FY13 • Increasingly at the expense of FTE

  7. Implications of Underlying Expenditure Assumptions • Meaning of Hiring Freeze • Growth in caseload handled by then existing staff levels • Increase in class size per teacher, for instance • Loss of SBB $ ~ The loss of $250/student in FY11 and FY12 & $50/student in FY13 • Increasingly at the expense of FTE

  8. Implications of Underlying Fund Balance Assumptions • Each district is to set aside in a reserve 3% or more of its fiscal year spending as unrestricted emergency reserves unless BOE: • Secures an investment grade Letter of Credit or • Designates real property, in lieu thereof • LOC is in fact available • Emergency reserve is not cash funded • Cash funding TABOR’s Emergency Reserve $12M

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