Budget Adoption 2012-2013

1. Budget Adoption 2012-2013 Ramona Unified School District June 7, 2012

2. Opening Comments • Ramona Unified is facing an unprecedented financial crisis • Projected ending fund balance below or at 0% • A cash crisis may occur which would result in a state loan unless this scenario changes

3. 2012-2013 July 1st Numbers • Revenues $42,219,398 • Expenses $47,887,523 • Difference (structural imbalance) ($ 5,668,125) • Projected Beginning Balance $ 4,232,257 (June 30, 2012) • Ending Balance ($ 1,349,867) (Projected for June 30, 2013) • Fund 17, Special Reserve Fund, houses the 3% reserve -- or $1,490,000 -- which is not reflected in the above number or in the multi-year projections

4. Structural Problem Projected ending balance is ($1,349,867) The lack of ongoing revenues, plus the inability to reduce ongoing expenditures fast enough, has created the structural imbalance ($5,668,398) is the projected structural deficit This imbalance is projected to increase each year as revenue increases are unable to keep pace with increases in expenditures Thus, each year without a permanent solution creates a larger financial problem

5. Loss of Revenues • Current year revenues are $46.5 million and next year projected revenues drop to $42.2 million • In 2007-2008 revenues were $55 million • In 2008-2009 revenues increased to $56.4 million • In 2008-2009, $4.87 million in revenues came from the Federal stimulus, or ARRA • In 2010-2011, $1.2 million in additional Federal dollars came from the Jobs Bill

6. Projections Are Based Upon Assumptions • Assumptions are used for key measures • Based upon past history, trends, proposed legislation • Based upon direction from SDCOE, advice from School Services of California, Inc., and information from Legislative Analyst’s Office, etc. • Assumptions are used in our formulas • The formulas with the assumptions results in the projections • As assumptions change, projections change

7. Assumptions For 2012-2013 • A key assumption is that the new taxes to be voted on in November will not be approved • A reduction to Ramona of $441 per ADA, or $2.5 million, is included • Even with successful passage of the tax measure, the structural budget imbalance will not be solved

8. Assumptions For 2012-2013 • Revenue • Current year P-2 ADA for revenue limit • No COLA increase • Transportation is fully funded, but flexible • Categorical flexibility is part of the weighted student formula (funding same for 12-13 due to hold harmless) • K-3 class size penalties is flexible with new funding formula • Expenses • 10% increase in health benefits • Servicing all salary schedules • Savings from classified and certificated layoffs • Savings from retirees • Assuming dollars budgeted in 2011-2012 are spent

9. Multi-Year Projection

10. Reductions That Have Already Been Made • This projection is based on factoring in the following actions and scenarios • Reduction of funding and carryover for sites and departments • Layoff of classified staff members • Layoff of certificated staff members • Elimination of positions through retirement or resignation • Three unpaid furlough days for all classified and administrative employees • Reduction of high school summer school program • Buy-up option for administrative employees who choose Health Net • Increase in student bus fees • Other reductions, transfers, and flexibility

11. Reductions That Have Not Yet Been Made • Employee Concessions for 2012-2013 • Administrators • Teachers • Classified Employees

12. Cash For 2011-2012 • Ramona will not have sufficient cash in the General Fund to meet payroll for June 30, 2012 • On May 31, after payroll, only $88,000 of cash remains in the General Fund • Internal borrowing will be just enough to meet June 30, 2012 payroll

13. Cash For 2012-2013 • With current projections, RUSD will NOT have enough cash to meet June 30, 2013 obligations • Dollars in other funds will not be sufficient to meet demands • With the passage of AB 103, Ramona does not qualify for a Tax and Revenue Anticipation Note (TRAN) • A Temporary Transfer Agreement is being sought to ease the district’s cash flow issues (see Agenda item B-7) • At this time, unsure if the loan from San Diego County will occur • Even if it does occur, staff is uncertain if this loan will solve the June 30, 2013 cash shortfall

14. Cash For 2013-2014 In 2013-2014, Ramona will not have enough cash to meet its obligations, nor will it have the ability to borrow the cash With current projections, Ramona Unified is, at most, 12 months away from a NEGATIVE certification

15. Cash Flow Projections Before AB 103

16. Cash Flow Projections Before AB 103

17. Cash Flow Projections After AB 103

18. Cash Flow Projections After AB 103

19. Conclusion Under the current scenario, Ramona Unified is facing a financial crisis Concessions from employees is clearly the only way out

20. What Is Next? • Many changes can occur at the State • Actual adoption of the State budget • On time in June? • What will the outcome be for initiatives such as weighted student formula or the transitional kindergarten program • What will be the reduction to revenues if the November ballot fails

21. What Is Next? • November ballot measure • Will it pass? • What happens if it does not pass? • Closes the presentation prior to the Public Hearing • Item B-6, the Governing Board may ask questions and hear comments from San Diego County Office of Education