2008/09 2008/09 FINANCIAL FINANCIAL PLANNINGPLANNING

Board MeetingBoard Meeting

January 13, 2009January 13, 2009

Prepared by: Douglas Barge

Y:\Business Services/Budget/2009-10/Adopted/Reductions/Strategies for Moving Forward B01-13-09Y:\Business Services/Budget/2009-10/Adopted/Reductions/Strategies for Moving Forward B01-13-09

Executive SummaryExecutive Summary On December 31, 2008, the Governor took the On December 31, 2008, the Governor took the

unusual step of introducing an 18 month budget unusual step of introducing an 18 month budget plan for the Legislature to considerplan for the Legislature to consider

His proposal has considerable negative impact on His proposal has considerable negative impact on our District both this year and nextour District both this year and next

This year the problem will start with “Cash”This year the problem will start with “Cash”

Next year the problem will be a budget shortfall of Next year the problem will be a budget shortfall of $19,670,660$19,670,660

Work has begun on reducing expenses this year Work has begun on reducing expenses this year and nextand next

i

Table of ContentsTable of ContentsDESCRIPTION PAGE #

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

A1

ii

B1 – B3C1

D1 – D8

E1F1

IntroductionIntroduction In NovemberIn November

We reported that the economy was in poor We reported that the economy was in poor shapeshape

Student enrollments were significantly Student enrollments were significantly below projectionsbelow projections

The Board also asked for additional studies The Board also asked for additional studies and reportingand reporting

Our cash investments were reported to be in Our cash investments were reported to be in good handsgood hands

We talked about the need to slow down We talked about the need to slow down expendituresexpenditures

The State was supposed to be working on The State was supposed to be working on fixing their budget problem. We predicted fixing their budget problem. We predicted they would not be successfulthey would not be successful

LodiUnified School District

It’s worseIt’s worse

Still decliningStill declining

DoneDone

Good, if we had Good, if we had cashcash

Now it’s time to Now it’s time to stopstop

Bad news, we Bad news, we were rightwere right

StatusStatus

A1

Governor ProposesGovernor ProposesRe-Benching Prop 98 Re-Benching Prop 98

FundingFunding

$1.1B Owed$1.1B Owed

Prop 98 Funding Prop 98 Funding CurrentlyCurrently

2008/09 2008/09 Fiscal Fiscal YearYear

** NetNet result is a permanent loss in on-going funding result is a permanent loss in on-going funding

Prop 98 Prop 98 FundingFunding

2002/03 & 2002/03 & 2003/04 2003/04

Fiscal YearsFiscal Years

$1.1 B of $1.1 B of expensesexpenses

Prop 98 Funding Prop 98 Funding After Redesign.After Redesign.

2009-10 2009-10 Fiscal Fiscal YearYear

B1

Governor’s Budget Governor’s Budget ProposalProposal

Even more deferred cash payments Even more deferred cash payments

The State has no time to generate cash this The State has no time to generate cash this yearyear

There are problems with Revenue Anticipation There are problems with Revenue Anticipation Warrants (RAWs) – I.O.U.sWarrants (RAWs) – I.O.U.s

B2

Cash Flow - DoomsdayCash Flow - Doomsday

($30,000,000)

($20,000,000)

($10,000,000)

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. April May June

1st Interim No State Action Governor 12/31/08

State Controller John Chiang – 12/22/08, “State will run out of cash in less than 70 days”State Controller John Chiang – 12/22/08, “State will run out of cash in less than 70 days” B3

2008/092008/09State Mid-Year ReductionsState Mid-Year Reductions

C

Overall 2008/09 Overall 2008/09 BalancingBalancing

DescriptionDescription TotalTotalOne- One- Time Time

B. Funding Sources/Uses (*) ($6,865,112) (8,201,559)

On-On-GoingGoing

1,336,447

D. TotalD. Total ($6,372,549)($6,372,549)($9,876,432)($9,876,432) $3,503,883$3,503,883

C1

A. Structural Balancing (Prior) ($2,167,436) $2,167,436

C. Funding Uses (*) 492,563 492,563

* See the Appendix for further details.

Modeling the Impact of Modeling the Impact of Governors 2009/10 Budget Governors 2009/10 Budget

PlansPlans

D

2009/10 Enrollment 2009/10 Enrollment ProjectionsProjections

A. PROGRAMS

PROJECTEDSTUDENTS GROWTH

2008/09CBEDS (*) ADA

1. Regular K-6 15,354 (232)

2. Regular 7-8 (27)4,262

3. Regular 9-12 (174)7,961

15,122

4,235

(220)

(25)

(160)7,787

4. All Other Programs 2,071 2,071

5. Serna Charter School 297 297

6. Total K-12 Increases 29,512 (433)29,945 (405)

D1* Enrollment as of October 2, 2008

Summary of Growth Summary of Growth ExpensesExpenses

(There is declining enrollment this (There is declining enrollment this year)year)

DESCRIPTION F.T.E BUDGET

1. Teacher Staffing ($1,538,993)(19.15)

4. Site Clerical, Noon Duty & Campus Supv. (51,220)(1.44)

3. Custodial Support & Bus Drivers (115,953)(2.47)

2. Special Ed. Staffing (Cert. & Class.) (315,303)(5.66)

5. Per-Pupil Allocations (29,299)

6. Total Growth Expenses6. Total Growth Expenses ($2,050,768)($2,050,768)(28.72)(28.72)

D2

Summary of Summary of On-GoingOn-Going ExpensesExpenses

Descriptions F.T.E BUDGET

3. Utilities & Fuel 595,162

6. Supply Inflation – School Sites 161,305

2. Health & Welfare - Retiree 194,403

11. Total On-Going Expenses11. Total On-Going Expenses $5,108,345$5,108,345

13.5013.50

4. Worker’s Compensation - .25% Increase.25% Increase 311,629

1. Projected Step & Column Costs $2,600,000

D3

5. Technology Maint. Agree. & New Systems 200,000

7. Lockeford K-8 Conversion 218,3783.00

8. Re-Instate K-6 Teacher Reserve 458,3286.50

9. Re-Instate 7-12 Teacher Reserve 245,1334.00

10. Routine Rest. Maintenance – 3%3% 124,007

Summary of One-Time Summary of One-Time ExpensesExpenses

Descriptions F.T.E BUDGET

1. Construction – Replenish AB87Replenish AB87 $1,000,000

4. Total One-Time Expenses4. Total One-Time Expenses $1,324,007$1,324,007-0--0-

D4

2. New Student Information System 200,000

3. General Reserve Requirement (3%) 124,007

Summary of Increased Summary of Increased CostsCosts

DescriptionDescription F.T.EF.T.E BudgetBudget

B. Growth Costs (2,050,768)(28.72)

D. Total Estimated Uses $4,381,584$4,381,584(15.22)(15.22)

C. One-Time Costs 1,324,007

13.50A. Increased Mandatory Costs $5,108,345

D5

Estimate of Growth Estimate of Growth Income Income

( There is declining enrollment this ( There is declining enrollment this year)year)

A. Net Growth Income ($2,217,699)

B. Special Education Growth (220,198)

Description Budget

C. Class-Size Reduction – Grades K-3 (175,175)

G. Total Estimated New Income ($9,334,626)

F. Unrestricted Ending Fund Balance (6,372,549)

D. Interest Income (300,000)

E. Lottery Income (49,005)

D6

Other Funding SourcesOther Funding Sources

DescriptionsDescriptionsON-ON-

GOINGGOING TOTALTOTALONE-ONE-TIMETIME

1. 08/09 Teachers Above Formula $944,360 $944,360

2. Shock Absorbers from 08/09 $1,312,283 1,312,283

3. Superintendent’s Proposed Reductions within the JAESC (*)

1,665,3391,665,339

4. Total Funding Sources4. Total Funding Sources $2,609,699$2,609,699 $3,921,982$3,921,982$1,312,283$1,312,283

D7* Unrestricted Reductions only

Overall BalancingOverall Balancing

DescriptionDescription TotalTotalOne- One- Time Time

On-On-GoingGoing

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 3,921,9822,609,699 1,312,283

D. TotalD. Total ($19,670,660)($19,670,660)($13,286,387)($13,286,387) ($6,384,273)($6,384,273)

D8

Phases for Phases for Budget Budget

Reduction Reduction PlanningPlanning

E

Steps for Budget Steps for Budget PlanningPlanning

Phase I – Budget Reduction Plan for JAESCPhase I – Budget Reduction Plan for JAESC

Phase II – Brainstorming and Recommendation Phase II – Brainstorming and Recommendation developmentdevelopment

AdministrationAdministration Superintendent’s Budget Advisory CommitteeSuperintendent’s Budget Advisory Committee

Phase III – Superintendent’s Recommendation to the Phase III – Superintendent’s Recommendation to the BoardBoard

Phase IV – Board Approves a PlanPhase IV – Board Approves a Plan

E1

DescriptionDescription

Next Steps for Moving to Next Steps for Moving to Phase IIPhase II

Administration will continue to work on Administration will continue to work on developing recommendationsdeveloping recommendations

Superintendent’s Budget Advisory (SBAC) begins Superintendent’s Budget Advisory (SBAC) begins working on the brainstorming listworking on the brainstorming list

SBAC completes Phase II SBAC completes Phase II

We need to remember we have a $19,670,660 We need to remember we have a $19,670,660 budget problem and will run out of “Cash” this budget problem and will run out of “Cash” this year if we don’t take action now on things that year if we don’t take action now on things that we can controlwe can control

F1

THE THE ENDEND

iii

AppendixAppendix

District Enrollment TrendsDistrict Enrollment Trends

2008/09 Financial Details2008/09 Financial Details

iv

District District Enrollment Enrollment

TrendsTrends

1

Elementary EnrollmentElementary Enrollment

14,700

15,000

15,300

15,600

05/06 Budget 05/06 Actuals 06/07 Budget 06/07 Actuals 07/08 Budget 07/08 Actual

08/09 Budget 08/09 Actual

2

Middle School Middle School EnrollmentEnrollment

4,200

4,250

4,300

4,350

4,400

4,450

1st W

eek

2nd W

eek

3rd W

eek

4th W

eek

5th W

eek

6th W

eek

7th W

eek

8th W

eek

9th W

eek

CBEDSNov.

Dec.

Feb.April

May

05/06 Budget 05/06 Actuals 06/07 Budget 06/07 Actuals 07/08 Budget 07/08 Actual

08/09 Budget 08/09 Actual

3

High School High School EnrollmentEnrollment

7,600

7,800

8,000

8,200

8,400

1st W

eek

2nd W

eek

3rd W

eek

4th W

eek

5th W

eek

6th W

eek

7th W

eek

8th W

eek

9th W

eek

CEBDSNov.

Dec.

Feb.April

May

05/06 Budget 05/06 Actuals 06/07 Budget 06/07 Actuals 07/08 Budget 07/08 Actual

08/09 Budget 08/09 Actual

4

Summary of Summary of On-GoingOn-Going 2008/09 Expenses2008/09 Expenses

Descriptions F.T.E BUDGET

4. Total On-Going Expenses4. Total On-Going Expenses ($492,563)($492,563)

3.523.52

1. COLA Reserve – 0.68%0.68% ($800,463)

2. Teacher Staffing Reductions - Unused (55,387) (0.68)

3. Developer Fee Funded Positions 363,287 4.20

5

Other 2008/09 Funding Other 2008/09 Funding SourcesSources

DescriptionsDescriptionsON-ON-

GOINGGOING TOTALTOTALONE-ONE-TIMETIME

1. Revenue Limit Reduction – Est. 4.5%Est. 4.5% ($7,401,096) ($7,401,096)

2. 08/09 COLA Reduction – 0.68%0.68% (800,463) (800,463)

3. State Categorical Reserves (6.50%)

4. Total Funding Sources4. Total Funding Sources ($8,201,559)($8,201,559) ($6,865,112)($6,865,112)$1,336,447$1,336,447

6

a. AB825 Block Grants $278,598 278,598b. EIA 474,467 474,467c. Transportation 333,725 333,725d. School Safety 29,214 29,214e. Special Education (228,176) (228,176)f. K-3 Class Size Red. 482,398 482,398g. Lottery (Non-Prop 20) (33,779) (33,779)