First Interim Budget ReportDecember 8, 2009

Richard Nicoll, Ph.D., SuperintendentBryan Richards, Director, Fiscal Services

Why an Interim Report?

Ed. Code §42130 requires the Board to certify two interim budget and financial reports

Certification is either Positive, Qualified or Negative Positive – The district will meet its obligations for 3 years Qualified – The district may not meet its obligations for 3

years Negative – The district will not meet its obligations in

current or upcoming year 1st Interim with transactions to October 31 due December

15 2nd Interim with transactions to January 31 due March 15 If 2nd Interim qualified or negative, 3rd Interim with

transactions through April 30 due June 1

When we last left Sacramento…

Revenue Limit Deficit balloons!

We thought we had it bad when the cut to the revenue limit was 17.97%

Has now grown to 22.35%

Unrestricted General Fund Revenue

Revenue Limit Sources $ 158,651,759 Federal Revenue 225,054 Other State Revenue 29,134,910 Other Local Revenue 2,396,999 Total Revenue 190,408,722 Less: Net Contrib. to RGF (37,552,110) Net Available Revenue $ 152,856,612

Mt. Diablo Unified School District Unrestricted General Fund Revenues Before Contributions

2009-10 Total = $190,408,722

Revenue Limit60.7%

Revenue Limit Contributed to

Restricted22.7%

Federal Revenue0.1%

State Revenue15.3% Local Revenue

1.3%

Revenue Limit is down from 89.8% of revenue to 83.4% because of the deficit.

Unrestricted General Fund Expenditures

Certificated Salaries $ 91,188,209 Classified Salaries 20,374,155 Employee Benefits 31,947,487 Books & Supplies 4,349,668 Services & Operating 1,716,904 Capital Outlay 137,720 Other Outgo 929,381 Interfund Transfers Out 6,202,658 Total Expenditures 156,846,181

Mt. Diablo Unified School DistrictUnrestricted General Fund Expenditures and Transfers Out

2009-10 Total = $156,846,181

Services & Operating

1.09%

Capital Outlay0.09%

Other outgo0.54%

Interfund Transfers Out

3.95%

Books and Supplies2.77%

Employee Benefits20.37% Classified Salaries

12.99%

Certificated Salaries58.14%

Salaries and Benefits make up 91.5% of expenditures & transfers out!

(This will adjust downward slightly as items are identified to ARRA)

Unrestricted General Fund Summary

Net Available Revenue $ 152,856,612 Net Expenditures 156,846,181 Net (decrease) fund bal. ( 3,989,569) Beginning Balance, July 1 24,529,701 Projected Ending Balance $ 20,540,132

Components of Ending Balance

Revolving Cash $ 300,000 Stores Inventory 536,118 Economic Uncertainties (2%) 5,812,158 IRS Assessment Resolution 533,550 FCMAT Implementation 78,965 Undesignated + Tier 3 Bal. 13,279,341 Ending Balance $ 20,540,132

Restricted General Fund Revenue

Revenue Limit Sources $ 6,614,982 Federal Revenue 31,515,828 Other State Revenue 35,503,387 Other Local Revenue 7,864,286 Interfund Transfers In 0 Net Contrib. from Unr. 38,349,013 Total Revenue $119,847,496

Mt. Diablo Unified School DistrictRestricted General Fund Revenue

2009-10 Total = $124,652,858Contribution from

Unrestricted34.62%

Revenue Limit5.31% Federal Revenue

25.28%

State Revenue28.48%

Local Revenue6.31%

Restricted General Fund Expenditures Certificated Salaries $ 34,997,554

Classified Salaries 20,207,208 Employee Benefits 22,597,978 Books & Supplies 20,722,286 Services & Other Operating 33,227,043 Capital Outlay 301,514 Other Outgo 2,505,016 Transfers Out 0 Total Expenditures $ 134,558,599

Mt. Diablo Unified School DistrictRestricted General Fund Expenditures

2009-10 Total = $139,363,960

Indirect Costs Xfr Out

3.45%

Books & Supplies14.87%

Employee Benefits16.22%

Classified Salaries14.50%

Certificated Salaries25.11%

Capital Outlay0.22%

Other Outgo1.80%

Services & Other Operating23.84%

Restricted General Fund Summary

Total Revenue $ 119,847,496 Total Expenditures 134,558,599 Net (decrease) in fund bal. (14,711,103) Beginning Balance, July 1 22,687,425 Projected Ending Balance $ 7,976,322

Other Funds of the District

Funds for special purposes excluded from the General Fund

Special Revenue Funds Charter School – Form 09I Adult Education – Form 11I Cafeteria – Form 13I Deferred Maintenance – Form 14I

Capital Projects Funds Building (Proceeds of local bonds for construction) –

Form 21I Capital Facilities (a.k.a. Developer Fees) – Form 25I

Other Funds of the District (cont’d) Capital Projects Funds (continued)

County School Facilities (State Allocations for construction) – Form 35I

Capital Project for Blended Component Units (Mello-Roos) – Form 49I

Debt Service Funds Bond Interest and Redemption – Form 51I Debt Service for Blended Component Units (Mello-Roos) –

Form 52I Foundation Private-Purpose Trust Fund

(Scholarship Fund) – Form 73I All “Other Funds” projecting positive fund balances

General Outlook for the Future Qualified Certification (we may NOT meet our

obligations for this year and the next two) Concerns

State fiscal health is precarious. Governor already suggesting across the board cuts. The new budget in January could include more mid-year cuts, as may the May revise.

Health care expense increases still exceeding CPI with no COLA to fund them

Declining enrollment for this year at 2%!! DEFICIT – Our deficit spending is back (due to

State cutting our revenue) and must be addressed.

The 09/10 revenue limit cut $1,423/ADA or $47,239,402

MDUSD Revenue Limit Funding per ADA

5,079

5,528

5,780

6,916

6,7146,550

6,4026,370

6,109

5,125

5,528

5,7145,541

5,4005,2735,225

5,411

5,079

5,6475,482

5,3485,227

4,947

5,630

4,500

5,000

5,500

6,000

6,500

7,000

7,500

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14

Year

Do

llar

s $

per

AD

A

Revenue Limit

2nd May Revise

Actual Budget

Supplemental Information

Form AI: Average Daily Attendance decrease of (655.24) in 09/10 will decrease funding for 10/11.

Form CASH: Cash Flow – to end year positive we must issue a $28M TRAN (this is double what we usually issue due to State deferrals)

Form RLI: Revenue Limit Calculations (Additional State cut of $9,415,303 since adoption from higher deficit factor and additional deficit #3)

Form 01CSI: Criteria & Standards Form CI: Certification to Sign summarizes Criteria &

Standards

Form MYPI: Multi Year Projection

Undesignated + Tier 3 @ 6/10 $13,279,341 Operating Deficit 2010/11 (13,250,623) Adjustment in 2% reserve 26,406 Unappropriated Balance 6/11 55,124 Operating Deficit 2011/12 (17,396,982) Adjustment in 2% reserve 67,720 Unappropriated Balance 6/12 ($17,274,138)

$17,274,000 across 2 years is only the start to fixing the real

problem this time around Unappropriated Balance 6/12 ($17,274,138) Projected Deficit in 2012/13 ($14,396,979)

Unappropriated Balance 6/13 ($31,657,604) Projected Deficit in 2013/14 ($17,575,150) Unappropriated Balance 6/14 ($49,319,391)

Average annual deficit over the next 4 years is $15,655,000 per year

How much less must we spend?

Enrollment declines projected to continue through 2014 at rates between 0.71% and 1.26% per year

We must decrease ongoing annual spending by a minimum of $15.7M by 7/1/2010 for the 2010/11 school year OR,

plan for even deeper rounds of cuts later as we will utilize all reserves by June 30, 2011 at our present rate $62.8M/4 = $15.7M; $62.8/3 = $20.9M/yr

These deficit numbers will get bigger if the State cuts more

What next?We go back to

Sacramento

Governor’s Budget comes out January 8 School Services updated dartboard based on

the new budget January 12 LAO will issue review to legislature State budget talks begin in legislature

Thank you and tune in next time for…