2010-2011 Unaudited Actuals

1. 2010-2011 Unaudited Actuals Ramona Unified School District Board Meeting August 25, 2011

2. Importance of End-of-Year Close • Staff has reported on the importance of the unaudited actuals • The ONLY time during the year when an accurate picture of the District’s finances can be seen • Shows the picture on one specific day -- June 30th • All revenues and expenses are accounted for • All other times are predictions of the finances • However, with the current fiscal crisis, end-of-year close is a piece of information which helps to determine the finances for future years

3. 2010-2011 Financial Highlights • Federal Jobs Bill • $1.19 million to RUSD, which has been spent • Federal Stimulus Dollars • Spent the remainder of these funds in the amount of $900,000 • State Budget Adoption (October 2010) • State budget was adopted with no anticipated reduction to revenues • No mid-year reductions • Remained on qualified status • Governor Brown took office, reduced non-education budget, and proposed an extension of temporary taxes

4. 2010-2011 Financial Highlights • School districts ended with a roller coaster ride of flat funding versus a reduction of revenue limits to their 2011-2012 budgets • Now, with a signed 11-12 budget, still uncertainty with: • World economy • National economy • State economy • The State budget has trigger language for mid-year reductions • Current State revenues are below projections for the triggers • Triggers could mean a mid-year cut of $2 million to Ramona

5. 2010-2011 Unaudited Actuals • Total Revenues $50,281,269.58 • Total Expenses $49,416,532.47 • Difference $ 864,737.11 • Shows both unrestricted side and restricted side of the financial picture • A transfer of $800,000 from Special Reserve, Fund 17, was part of the closing of 2010-2011

6. The Final 2010-2011 Outcome • Beginning Balance $ 7,329,657.65 • Ending Balance $ 8,194,394.76 • Unrestricted Ending Balance $ 6,908,672.50 • Restricted Ending Balance $ 1,285,722.26

7. Components of Ending BalanceUnrestricted • Revolving Cash $25,000.00 • Formerly Restricted Programs $1,214,769.74 • Site/Department Carryover $666,713.12 • Vacation Liability $720,064.00 • Remaining Balance for 2012-2013 $4,282,125.64 • Total $6,908,672.50 • Vacation Liability plus remaining balance means $5,002,189 will be carried over to 2012-2013 school year

8. Multi-Year Problem • 2011-2012 (current year), RUSD has the fiscal resources to meet obligations • 2012-2013 (only 10 months away), RUSD must realize significant reductions to meet its financial obligations • What could change the scenario?

9. No new Federal Money, if any, a reduction of Title I and Title II • The multi-year projections have cost of increases from the State • Health care and employee costs will not likely to go down • The State and National economy is sluggish • Is there, and in what form, a next silver bullet to help us out in the future? Multi-Year Projection 9

10. Multi-Year Problem - Conclusion • Ramona is facing a $1.9 million shortfall for 2012-2013 • Dollars in various funding sources, such as textbooks, ROP, and site/department carryovers, will help to fund this shortfall • However, this is not enough to eliminate the shortfall • Other reductions must happen to alleviate the shortfall • 2013-2014 year is projecting a $7.5 million shortfall • Must begin to plan for this sooner rather than later • 2014-2015 becomes the third year in the forecast, starting with the first interim report in December • Multi-year projections are constantly changing with new information

11. Loss of Federal Funding • In 2010-2011 Ramona received and spent: • $1,190,000 in Fed Jobs money • $900,000 in remaining ARRA funds • These Federal dollars (over $2 million) are not being replaced for 2011-2012 • Costs have gone up: • Over $500,000 in health care costs alone

12. Health Insurance Costs • Gap for Kaiser and Health Net insurance programs has increased significantly • Health Net increase is $507,000 • Kaiser increase is marginal • CSEA, RTA, and ALT have agreed to negotiate and/or discuss cost-savings ideas with the District by Sept. 7 • Open Enrollment has been delayed to determine if savings are possible for this year • May be possible to cut the 2012-2013 shortfall with creative solutions to control rising health care costs

13. Resolution 2010-11-21 • The Board adopted a resolution in June that identified the amount of budget reductions needed in future years • RUSD must submit a list of Board-approved budget reductions by the First Interim Report, December 15, 2011, which corrects the imbalance • RUSD must provide a list of the cuts that have already been made and a list outlining the timetable of remaining cuts and/or concessions

14. Other Funds • Fund 17 Special Reserve Fund • Revenues (Interest) $ 20,269.76 • Expenses (Transfers out) $ 820,269.76 • Ending Balance $2,395,945.55 • Note about the ending balance: • A 3% minimum reserve is $1,482,496 • $900,000 is budgeted to be transferred to general fund in 2011-2012 • $2,395,945 minus $900,000 leaves ONLY the 3% reserve

15. Other Funds • Cafeteria Fund • Revenues $1,932,726.91 • Expenses $2,003,614.77 • Ending Balance $ 688,705.29 • Self Insurance Fund • Revenues $577,225.74 • Expenses $719,617.56 • Ending Balance $209,580.49

16. Other Funds • Developer Fees • Revenues $ 141,926.27 • Expenses $1,076,290.91 • Ending Balance $7,266,061.99

17. Conclusion • Ramona Unified is facing a potentially devastating financial crisis in 2012-2013 and beyond • This is without any “triggers” happening • Downward world, national, and state economies could mean no growth for school funding and no “silver bullet” • Structural problem in our budget • Cash shortages and the inability to borrow the cash will become the problem