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Impact of the Governor’s Proposal and State Budget Issues on Lodi Unified

Impact of the Governor’s Proposal and State Budget Issues on Lodi Unified. Board Study Session January 26, 2010. Table of Contents. DESCRIPTION. PAGE #. Opening Comments Considerations The State Budget Building the Budget Defining the Problems Key Dates Recommendations. 1 1 1 - 5

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Impact of the Governor’s Proposal and State Budget Issues on Lodi Unified

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  1. Impact of the Governor’s Proposal and State Budget Issues on Lodi Unified Board Study Session January 26, 2010

  2. Table of Contents DESCRIPTION PAGE # Opening Comments Considerations The State Budget Building the Budget Defining the Problems Key Dates Recommendations 1 1 1 - 5 1 - 9 1 1 1 ii

  3. Opening Comments • The budget shortfall at the State level is expected to be $19.9 billion • For 2009/10 the Governor will call for another special session of the Legislature and ask for reductions totaling $6.6 billion • $2 billion hit to education will be from unspent funding sweeps • If cuts are not made in the special session the budget problem will grow • In 2010/11 the Governor will fully fund the Cola • Great, except the Cola is expected to be negative (.38%) an expected loss of $840,120 to our District • He proposes to target reductions in the same areas we’ve been targeting for the last two years • He is not funding the maintenance factor payback as he promised A1

  4. Considerations • The Board has a fiduciary responsibility to keep the District running for our students • The Board wishes to approach reductions in a Fair and Equitable manner • Weigh efforts against the highest probability for success • Don’t sacrifice income to retain support programs • Recognize with reductions in expenditures comes a reduction in services B1

  5. The State Budget C.

  6. The State’s Budget Gap C1

  7. Cola (.38%) 18.355% 18.355% 2009-10 Fiscal Year K-12 Revenue Limits $655,464 COLA Deficit Deficit 2009/10 Adopted Governor’s Proposal For 2010/11 C2

  8. Revenue Limit Deficit 2008/09 2009/10 2010/11 C3

  9. Other Cuts From the Governor • Targeted cuts of $1.2 billion aimed at “school district administration costs” (which is not clearly defined) • Recaptured savings of $.3 billion from “elimination of barriers to contracting out” • Reductions of $1.5 billion would cost the District $201 per ADA • This is over and above the negative Cola and deficit factor • It amounts to another $5,489,511 of lost Revenue Limit income • Authorization for the shorter school year remains C4

  10. Aug 10 Aug 10 Apr 10 Mar 10 Feb 10 Jul 10 Jan 10 Jun 10 Jan 10 Nov 09 Oct 09 Sept 09 Aug 09 July 09 Oct 09 Oct 09 May 10 Dec 09 Dec 09 2010/11 Cash FlowState Delays Paying Schools Change C5

  11. Building the Budgetfor 2010/11 D.

  12. Enrollment Projections 2009/10 CBEDS PROJECTED STUDENTS CHANGE ADA PROGRAMS 15,172 1. Regular K-6 15,023 (149) (141) 2. Regular 7-8 4,222 4,185 (37) (34) 7,862 7,763 (99) (91) 3. Regular 9-12 4. All Other Programs 2,138 2,138 - - 5. Serna Charter School 290 290 - - 6. Total K-12 Increases 29,684 29,399 (285) (266) Enrollment is projected to continue declining D1

  13. Summary of Growth ExpensesJanuary 26, 2010 DESCRIPTION F.T.E BUDGET 1. Teacher Staffing (11.12) ($696,553) 2. Special Ed. Staffing (Cert. & Class.) 3. Custodial Support & Bus Drivers 4. Site Clerical, Noon Duty & Campus Supv. 5. Per-Pupil Allocations (18,911) 6. Total Growth Expenses ($715,464) (11.12) There is more declining enrollment projected for 2010/11 D2

  14. 2. Health & Welfare - Retiree 1. Projected Step & Column Costs $2,504,031 145,721 4. Elect., Gas, Heat, Disposal & Sewage 210,541 3. Worker’s Compensation - .25% Increase 163,814 5. Phone & Wide Area Network Services 6. Technology Maint. Agree. & New Systems n/c n/c 7. Total Mandatory On-Going Expenses $3,024,107 Mandatory On-Going ExpensesJanuary 26, 2010 Descriptions F.T.E BUDGET D3

  15. 1. Contingency Reserve – Replenish 2. General Reserve Requirement (3%) $104,195 52,491 -0- 3. Total Mandatory One-Time Expenses $156,686 Mandatory of One-Time ExpensesJanuary 26, 2010 Descriptions F.T.E BUDGET D4

  16. 2. Tier III 1. Categorical Programs that Encroach 2,334,011 $940,049 3. Federal ARRA Expenses 6,279,706 4. Total Discretionary On-Going Expenses $9,553,766 Discretionary of On-Going ExpensesJanuary 26, 2010 Descriptions F.T.E BUDGET D5

  17. 1. General Reserve Requirement (3%) $ 286,613 -0- 2. Total Discretionary One-Time Expenses $ 286,613 Discretionary of One-Time ExpensesJanuary 26, 2010 Descriptions F.T.E BUDGET D6

  18. D. Additional Discretionary On-Going Costs E. Additional DiscretionaryOne-TimeCosts C. Increased Mandatory One-Time Costs 9,553,766 286,613 156,686 B. Increased Mandatory On-Going Costs 3,024,107 (11.12) A. Growth Costs ($ 715,464) F.Total Estimated Uses (11.12) $12,305,708 Summary of Increased CostsJanuary 26, 2010 Description F.T.E Budget D7

  19. A. Net Growth Income ($1,378,612) B. Special Education Growth (123,336) F.Total Estimated New Income ($1,606,115) Estimate of Growth Income January 26, 2010 Description Budget C. Class-Size Reduction – Grades K-3 (74,907) D. Interest Income E. Lottery Income (29,260) There is declining enrollment this year D8

  20. ($ 655,464) 1. Revenue Limit COLA (-.38%) ($ 655,464) 2. Revenue Limit Reduction ($201) (5,489,511) (5,489,511) (113,166) (113,166) 3. Other Program COLAs (-.38%) 4. A.R.R.A. – Title I Carryover (est.) 588,337 $ 588,337 5. A.R.R.A. – IDEA Carryover (est.) 1,747,112 1,747,112 6. Reduce 3% General Reserve 944,281 944,281 7. Total Funding Sources ($6,258,141) ($2,978,411) $3,279,730 Other Funding SourcesJanuary 26, 2010 ONE- TIME ON- GOING Descriptions TOTAL D9

  21. Defining the Problemfor 2010/11 E.

  22. A. Structural Balancing (Prior) ($13,641,534) ($13,641,534) B. Funding Sources (1,606,115) (1,606,115) C. Estimated Uses ($ 443,299) (11,862,409) (12,305,708) D. Other Sources (6,258,141) 3,279,730 (2,978,411) Defining the ProblemJanuary 26, 2010 One Time On Going Description Total E. Total Problem $2,836,431 ($33,368,199) ($30,531,768) E1

  23. Key Datesfor 2010/11 F.

  24. January 26, Study Session February 16, Board Meeting May 7, Governor’s Revisions May 14, Board Meeting May 18, Board Meeting June 1, Board Meeting June 15, Board Meeting Report to the Board on Governor’s budget proposals for 2010/11 & the impact on Lodi USD Resolution for employee layoff notices Announcement of May revisions Final employee layoff notices Report on May revisions, Superintendent’s budget reduction recommendations & preliminary budget plan Discussion of 2010/11 Budget Plan Adoption of 2010/11 Budget Key Dates in the Process Date Activity F1

  25. Acknowledge the severity of the financial problem Begin preparations for reduction in personnel of approximately 464.70 FTE (includes 11.12 FTE reduction due to enrollment decline) Continue negotiating with the bargaining groups which could minimize the number of employees that would lose their jobs Slowing down the ship Continue to adjust strategies as future events warrant Recommendations G1

  26. The End iii

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