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Enrollment & Budget Update

Jane A. Russo, SuperintendentJane A. Russo, Superintendent

Cathie Olsky, Ed.D., Deputy SuperintendentCathie Olsky, Ed.D., Deputy Superintendent

Michael P. Bishop, Sr., CBO, Associate Superintendent, Business ServicesMichael P. Bishop, Sr., CBO, Associate Superintendent, Business Services

Tony Wold, Ed.D., Director, Program Quality AnalysisTony Wold, Ed.D., Director, Program Quality Analysis

Swandayani Singgih, Assistant Director, Fiscal ServicesSwandayani Singgih, Assistant Director, Fiscal Services

April 26, 2011April 26, 2011

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Purpose of Today’s Presentation

• Current Enrollment and 2011-12 Projections

• State Budget Update

• District Budget Reductions

• Next Steps

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2010 – 11 Enrollment

2010 – 11 Projected

Enrollment

Actual Enrollment

as of 04/11/2011

Difference

Elementary (includes K – 6 sites) 26,195 26,431 236

Intermediate 11,540 11,444 (96)

High School 15,521 15,332 (189)

Total 53,256 53,207 (49)

Current enrollment, while less than projection by 49, was greater than budgeted at CBEDS by 406 students. Traditionally, enrollment drops

between 700 – 1000 after CBEDs each year.

Does not include Charter SchoolsEnrollment as of April 11, 2011

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Enrollment Projections

The District has utilized a three-level approach to enrollment projections the past two school years and bases staffing allocations on the final projection

Input from site principal Demographic analysis include trends and historical cohort-survival rates (previously used Consultant but now done by Facilities) District adjustments based upon multiple factors done in collaboration with Human Resources, Facilities, Business Services and Program Quality

Year Consultant District CBEDS Difference (CBEDS v. District % Difference

2011 - 12 53,996

2010 – 11 53,289 53,256 53,754* 498 0.93%

2009 – 10 55,025 54,813 54,019 (794) (1.44%)

2008 – 09 54,314 54,210 54,637 427 0.78%

2007 – 08 53,693 55,043 54,449 (594) (1.08%)

2006 – 07 55,053 54,899 (154) (0.27%)

2005 – 06 58,169 56,574 (1,595) (2.74%)

2004 – 05 58,656 58,884 228 0.38%

2003 – 04 62,656 59,895 (2,761) (4.40%)

2002 – 03 58,953 60,973 2,020 3.42%

* CBEDS not finalized

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• Ensure fiscal solvency (legally required)

• Preserve staff– Continue to provide Elementary support staff

• Maintain integrity of programs– Continue to protect services to the most

vulnerable students

• Find other ways to reduce expenditures

• School Safety

• Maintain athletics and music programs

• Reduced class sizes in grades 1 & 2

Board Priorities 2011-12 through 2015-16

Board Budget Development Priorities

State Budget Update

• Absence of tax election in June:– Alternative budget reductions proposed by Legislative Analyst’s Office (LAO) if $14 billion in new revenues are not

raised and if K-12 education is cut by an additional $5 billion:• Eliminate K-3 Class Size Reduction• Reduce revenue limits and categorical funding flexibility by 2.2%• Reduce Economic Impact Aid (EIA) funding by 20% and mandate school district to utilize EIA reserves prior to receiving any new

state funding• Reduce additional state categorical funding for basic aid districts and counties• Require children to turn five years of age prior to enrolling in kindergarten by changing the cutoff date from December to

September starting in 2011-12 and postponing or eliminating Transitional Kindergarten program

– Actions State could take to assist districts per LAO:• Reduce instructional day requirements• Relax contracting-out requirements for non-instructional services• Eliminate substitute teacher priority and pay provisions• Allow districts to access restricted reserves

– “Oil Extraction Fee to Rescue Education” ballot initiative:• Estimated revenue for K-12: approx. $600-900 million per year depending upon production levels• Requires 500,000 signatures to get the initiative on the ballot

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Fitch Affirms SAUSD Bond Rating ‘AA’

• On April 25, 2011 Fitch Ratings affirmed Santa Ana Unified School District, CA's (the district) bonds as follows:

– $129.5 million (Election of 1999) general obligation bonds, series 2000, 2002, and 2002B at 'AA'.

– The Rating Outlook has been revised to Stable from Negative.

• “The Outlook revision to Stable from Negative reflects maintenance of a solid unreserved general fund balance, good contingency planning, and improving enrollment trends”

• “The 'AA' rating reflects the district's sound financial operations, exhibited by two consecutive years of operating surpluses, an unreserved fund balance well above the district's historical average, proactive actions to reduce expenditures in line with revenues, and a moderate degree of remaining expenditure flexibility”

• “Under current projections an additional $64.4 million would need to be cut in fiscal 2013 to balance operations. Given historically proactive actions by management to align expenditures with declining revenues, Fitch believes expenditures will be sufficiently curtailed, as needed, to maintain an adequate financial cushion.”

Updated Budget Reductions

• Utilizing one-time solutions in both 2011-12 (Jobs bill & unexpected base revenue limit increase from 10-11)

and 2012-13 (Fund 17 reserve balances) SAUSD will still be required to make additional unidentified budget reductions of:

– $14.4 million for 2011-12

– $28.1 million for 2012-13 (by December 13, 2011)

• Available one-time resources are approximately $37 million

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Plan C Budget Reductions*

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* Projection if Tax Extensions do not occur

• Utilizing one-time solutions in both 2011-12 (Jobs bill & unexpected base revenue limit increase from 10-11)

and 2012-13 (Fund 17 reserve balances) SAUSD will still be required to make additional unidentified budget reductions of:

– $30.9 - $41.9 million for 2011-12

– $28.1 million for 2012-13 (by December 13, 2011)

• Available one-time resources are approximately $37 million

OCDE Required2011-12 Reductions

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Description of Reduction Proposed Amount of Reduction/

Increase

Reductions Required

Plan B

Reductions required for 2011-12 $31.5

10-11 Base Revenue Limit (one-time) $13.8 $17.7

Jobs Bills (one-time) $8.3 $9.4

Health and Welfare negotiations $3.0 $6.4

Increase expenditures for 2011-12 <$4.0> $10.4

Loss of $79/ADA 2011-12 Base Revenue Limit (Plan B)

<$4.0> $14.4

$ in millions

2011-12 Budget Reductions Considerations For 3rd Interim

Activity / Program One-time Ongoing

Tier III Instructional Materials – utilize Prop 20 restricted funds and sweep ongoing funds currently designated

$5.5 $2.0

Second Interim decrease in expenditures – reduces needed reductions

$2.0

Enrollment and ADA adjustments – reduce needed reductions based upon P2 attendance report (April 2011)

$3.1

TOTALS $5.5 $7.1

Other possible options

Tier III Summer School – eliminate unrestricted funding for comprehensive high schools. GSP and SAC-Bridge can support credit recovery and SIG sites have funding for extended learning time

$1.0

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$ in millions

OCDE Required2011-12 Reductions

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Description of Reduction Proposed Amount of Reduction/

Increase

Reductions Required

Plan B

Unidentified Reductions required for 2011-12

$14.4

Tier III (one-time) $5.5 $8.9

Attendance, Tier III and 2nd Interim adjustments

$7.1 $1.8

Tax increase not extended (to be determined at May Revise)

<$16.5>* $18.3

$ in millions

* Projection Until May Revise of new State Cuts to Education

OCDE Required2012-13 Reductions

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Description of Reduction Proposed Amount of Reduction/

Increase

Reductions Required

New Reductions required for 2012-13 $30.5

10-11 Base Revenue Limit (one-time from 2011-12)

$13.8 $44.3

Jobs Bills (one-time from 2011-12) $8.3 $52.6

Tier III (one-time from 2011-12) slides 11-12

$5.5 $58.1

CSR Penalty Flexibility continues $11.0 $47.1

One-time Utilization of District Reserve funds (Fund 17)

$13.5 $33.6

Revised enrollment projection adjustment $1.6 $32.0

$ in millionsAssumes $14.4 - $30.9 million in unidentified reductions are made in 2011-12 (Slide 12)

Updated Budget Reductions Targets

• Utilizing one-time solutions in both 2011-12 (Jobs bill

& unexpected base revenue limit increase from 10-11) and 2012-13 (Fund 17 reserve balances) SAUSD will still be required to make additional unidentified budget reductions of:

– $18.3 million for 2011-12 (projected)– $32.0 million for 2012-13 (by December 13, 2011)

• Available one-time resources remaining would be approximately $23.5 million (With Fund 17 utilized one-time for 2012-13)

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Date Event or Activity

On-going until Settled

Negotiations with our certificated & classified associations (SAEA & CSEA respectively) for ongoing reductions and utilization of Jobs Bill funds

May 10, May 24, June 14,

June 28

Board Meetings

May 24 Presentation of Third interim Report

Identification of remaining 2011-12 Budget Reduction measures

June 28 Approval of 2011 – 12 Adopted Budget

Approval of remaining 2011-12 Budget Reduction measures

Next Steps - Budget

Back Up Slides(Intended for a deeper

understanding of the issues, but will not be covered in the

presentation)

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History of DistrictBudget Reductions

SAUSD has been required to make reductions to the budget each year beginning in 2004-05.

The cuts from 2004 through 2008-09 were predominantly due to declining enrollment and totaled <$120.6 million>

Cuts in 2009-10 and 2010-11 totaled <$42.6 million> of which $20 million of the solutions were one-time uses of funds pushing the ongoing cut requirement to the following year

The current reductions required for 2011-12 are <$31.5 million> which includes the $20 million that were one-time solutions from 2010-11

The second year, 2012-13 will require an additional <$30.5 million> in budget reductions

In the 9 year span beginning in 2004-05 SAUSD has been required to identify and implement over <$225.2 million> in budget reduction solutions

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Programs At Risk• 180 Instructional Days

– SAUSD currently plans to offer 180 instructional days for students in 2011-12

• QEIA (LAO suggested reduction) - $11 million restricted funds– 106 Certificated positions

• CSR (LAO suggested reduction) - $11 million general funds

• EIA* (LAO suggested reduction of 20%) - $3 million restricted funds (total allocation to district is $15 million)

• Title I* (H.R. 1 cuts of $5 billion) - $3 - $16 million in restricted funds

• SIG (H.R. 1 legislation)– 25 Certificated and Administrative positions at transformational schools

* EIA and Title I funded positions– 60+ Certificated CSR teachers Elementary– 30 Intermediate and High School Counselors– 54 Certificated Teachers on Special Assignment TOSA– 15 Learning Directors

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Approximately 300 certificated positions from all categories

LAO Summary of Budget Actions by Districts

• Class sizes K-3 have increased from 20-21 in 2008-09 to approximately 25 in 2010-11

• Grades 4 – 12 class sizes have increased about 3 or more per grade

• 60% of districts have reduced the school year (30% are already down to 175 days)

• 93% of districts have used all, or most, Tier III flexible funding to meet “any educational need”

– The most common eliminated programs are Arts and Music, Community Based English Tutoring and High School Class Size Reduction

• One-time ARRA and Jobs Bill funding is being used by most school districts to maintain positions or reduce temporarily negotiated furlough days

– ARRA funding expires at the end of the 2010-11 fiscal year– Jobs Bill funding expires at the end of the 2011-12 fiscal year

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Projected vs. Actual Funding Per ADA

Santa Ana Unified School District

$5,778

$6,107

$6,369 $6,344$6,451

$4,946

$5,778

$5,186$5,204

$5,628

$4,500

$5,500

$6,500

2007-08 2008-09 2009-10 2010-11 2011-12

Dol

lars

Per

AD

A

Projected Statutory COLA

Flat Funding

Actual Funding$4,856

Loss ofbaseline dollars

Loss of cost-of-living adjustment

(COLA)

If Election Fails

Updated by SAUSD 20

Delayed Principal Apportionment Funding

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