Impact of the Governor’s Proposal and Impact of the Governor’s Proposal and State Budget Issues on Lodi UnifiedState Budget Issues on Lodi Unified

Board Study SessionJanuary 26, 2010

Table of ContentsTable of Contents

DESCRIPTION PAGE #

A. Opening CommentsB. ConsiderationsC. The State Budget D. Building the BudgetE. Defining the ProblemsF. Key DatesG. Recommendations

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Opening CommentsOpening Comments

The budget shortfall at the State level is expected to be $19.9 billion

For 2009/10 the Governor will call for another special session of the Legislature and ask for reductions totaling $6.6 billion – $2 billion hit to education will be from unspent funding sweeps– If cuts are not made in the special session the budget problem will grow

In 2010/11 the Governor will fully fund the Cola

– Great, except the Cola is expected to be negative (.38%) an expected loss of $840,120 to our District

– He proposes to target reductions in the same areas we’ve been targeting for the last two years

– He is not funding the maintenance factor payback as he promised

A1

ConsiderationsConsiderations

The Board has a fiduciary responsibility to keep the District running for our students

The Board wishes to approach reductions in a Fair and Equitable manner

Weigh efforts against the highest probability for success

Don’t sacrifice income to retain support programs

Recognize with reductions in expenditures comes a reduction in services

B1

The State Budget

C.

$6.6

$12.3

$1.0

$6.6

$12.3

$19.9

$0.0

$5.0

$10.0

$15.0

$20.0

2010/11 Combined

2009/10Budget Shortfall 2010/11 Shortfall Reserve Combined

The State’s Budget GapThe State’s Budget Gap

C1

COLACOLA

K-12 Revenue LimitsK-12 Revenue Limits

Governor’s Governor’s Proposal Proposal

For 2010/11For 2010/11

2009/10 2009/10 AdoptedAdopted

2009-10 Fiscal Year

DeficitDeficit

C2

18.355%

Cola (.38%)

DeficitDeficit 18.355%

$655,46$655,4644

Revenue Limit DeficitRevenue Limit Deficit-7

.84%

11.0

10%

-7.8

4%

-13.

09%

-17.

967%

-18.

36%

-18.

36%

Janua

ry May

Adopted

Janua

ry May

Adopted

Janua

ry May

Adopted

2008/09 2009/10

C3

2010/11

C4

Targeted cuts of $1.2 billion aimed at “school district administration costs” (which is not clearly defined)

Recaptured savings of $.3 billion from “elimination of barriers to contracting out”

Reductions of $1.5 billion would cost the District $201 per ADA– This is over and above the negative Cola and deficit factor– It amounts to another $5,489,511 of lost Revenue Limit income

Authorization for the shorter school year remains

Other Cuts From the GovernorOther Cuts From the Governor

2010/11 Cash Flow2010/11 Cash FlowState Delays Paying Schools

ChangeJuly 09 Oct 09 Dec 09

Aug 09

Sept 09

Oct 09

Nov 09

Jan 10

Feb 10

Mar 10

Apr 10

Dec 09

Jan 10

May 10

Jun 10

Jul 10

Aug 10

Aug 10

C5

Oct 09

Building the BudgetBuilding the Budgetfor 2010/11for 2010/11

D.

Enrollment ProjectionsEnrollment Projections

PROGRAMS

PROJECTEDSTUDENTS CHANGE

2009/10CBEDS ADA

1. Regular K-6 15,172 (149)

2. Regular 7-8 (37)4,222

3. Regular 9-12 (99)7,862

15,023

4,185

(141)

(34)

(91)7,763

4. All Other Programs 2,138 2,138

5. Serna Charter School 290 290

6. Total K-12 Increases 29,399 (285)29,684 (266)

- -

- -

Enrollment is projected to continue Enrollment is projected to continue decliningdeclining D1

Summary of Growth ExpensesSummary of Growth ExpensesJanuary 26, 2010January 26, 2010

DESCRIPTION F.T.E BUDGET

1. Teacher Staffing ($696,553)(11.12)

4. Site Clerical, Noon Duty & Campus Supv.

3. Custodial Support & Bus Drivers

2. Special Ed. Staffing (Cert. & Class.)

5. Per-Pupil Allocations (18,911)

6. Total Growth Expenses6. Total Growth Expenses ($715,464)($715,464)(11.12)(11.12)

There is more declining enrollment projected for There is more declining enrollment projected for 2010/112010/11 D2

Mandatory On-Going ExpensesMandatory On-Going ExpensesJanuary 26, 2010January 26, 2010

Descriptions F.T.E BUDGET

4. Elect., Gas, Heat, Disposal & Sewage 210,541

2. Health & Welfare - Retiree 145,721

7. Total Mandatory On-Going Expenses7. Total Mandatory On-Going Expenses $3,024,107$3,024,107

3. Worker’s Compensation - .25% Increase.25% Increase 163,814

1. Projected Step & Column Costs $2,504,031

6. Technology Maint. Agree. & New Systems n/c

D3

5. Phone & Wide Area Network Services n/c

Mandatory of One-Time ExpensesMandatory of One-Time ExpensesJanuary 26, 2010January 26, 2010

Descriptions F.T.E BUDGET

1. Contingency Reserve – ReplenishReplenish $104,195

3. Total Mandatory One-Time Expenses3. Total Mandatory One-Time Expenses $156,686$156,686-0--0-

2. General Reserve Requirement (3%) 52,491

D4

Discretionary of On-Going ExpensesDiscretionary of On-Going ExpensesJanuary 26, 2010January 26, 2010

Descriptions F.T.E BUDGET

2. Tier III 2,334,011

4. Total Discretionary On-Going Expenses4. Total Discretionary On-Going Expenses $9,553,766$9,553,766

3. Federal ARRA Expenses 6,279,706

1. Categorical Programs that Encroach $940,049

D5

Discretionary of One-Time ExpensesDiscretionary of One-Time ExpensesJanuary 26, 2010January 26, 2010

Descriptions F.T.E BUDGET

2. Total Discretionary One-Time Expenses2. Total Discretionary One-Time Expenses $ 286,613$ 286,613-0--0-

1. General Reserve Requirement (3%) $ 286,613

D6

Summary of Increased CostsSummary of Increased CostsJanuary 26, 2010January 26, 2010

DescriptionDescription F.T.EF.T.E BudgetBudget

A. Growth Costs ($ 715,464)(11.12)

F. Total Estimated Uses $12,305,708$12,305,708(11.12)(11.12)

C. Increased Mandatory One-Time Costs 156,686

B. Increased Mandatory On-Going Costs 3,024,107

D7

D. Additional Discretionary On-Going Costs 9,553,766

E. Additional Discretionary One-Time Costs 286,613

Estimate of Growth Income Estimate of Growth Income January 26, 2010January 26, 2010

A. Net Growth Income ($1,378,612)

B. Special Education Growth (123,336)

Description Budget

C. Class-Size Reduction – Grades K-3 (74,907)

F. Total Estimated New Income ($1,606,115)

D. Interest Income

E. Lottery Income (29,260)

There is declining enrollment this There is declining enrollment this yearyear

D8

Other Funding SourcesOther Funding SourcesJanuary 26, 2010January 26, 2010

DescriptionsDescriptionsON-ON-

GOINGGOING TOTALTOTALONE-ONE-TIMETIME

1. Revenue Limit COLA (-.38%) ($ 655,464) ($ 655,464)

2. Revenue Limit Reduction ($201) (5,489,511) (5,489,511)

3. Other Program COLAs (-.38%) (113,166)(113,166)

D9

4. A.R.R.A. – Title I Carryover (est.) $ 588,337 588,337

5. A.R.R.A. – IDEA Carryover (est.) 1,747,112 1,747,112

7. Total Funding Sources7. Total Funding Sources ($6,258,141)($6,258,141) ($2,978,411)($2,978,411)$3,279,730$3,279,730

6. Reduce 3% General Reserve 944,281 944,281

Defining the ProblemDefining the Problemfor 2010/11for 2010/11

E.

Defining the ProblemDefining the ProblemJanuary 26, 2010January 26, 2010

DescriptionDescription TotalTotalOne Time One Time On GoingOn Going

A. Structural Balancing (Prior) ($13,641,534) ($13,641,534)

B. Funding Sources (1,606,115) (1,606,115)

D. Other Sources (2,978,411)(6,258,141) 3,279,730

E. Total ProblemE. Total Problem ($30,531,768)($30,531,768)($33,368,199)($33,368,199) $2,836,431 $2,836,431

E1

C. Estimated Uses (12,305,708) (11,862,409) ($ 443,299)

Key DatesKey Datesfor 2010/11for 2010/11

F.

Key Dates in the ProcessKey Dates in the Process

January 26, Study Session

February 16, Board Meeting

May 7, Governor’s Revisions May 14, Board Meeting May 18, Board Meeting

June 1, Board Meeting June 15, Board Meeting

Report to the Board on Governor’s budget proposals for 2010/11 & the impact on Lodi USD

Resolution for employee layoff notices

Announcement of May revisionsFinal employee layoff noticesReport on May revisions,

Superintendent’s budget reduction recommendations & preliminary budget plan

Discussion of 2010/11 Budget PlanAdoption of 2010/11 Budget

F1

DateDate ActivityActivity

RecommendationsRecommendations

Acknowledge the severity of the financial problem

Begin preparations for reduction in personnel of approximately 464.70 FTE (includes 11.12 FTE reduction due to enrollment decline)

Continue negotiating with the bargaining groups which could minimize the number of employees that would lose their jobs

Slowing down the ship

Continue to adjust strategies as future events warrant

G1

The EndThe End

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