West Contra Costa Unified School District

Board MeetingOctober 26, 2011

Framework

Once again the State adopted a budget without realistically solving its own major deficit problem.

“Mid-Year Triggers” is the latest catch phrase for what amounts to the additional threat of cuts for programs and schools throughout the State.

West Contra Costa Unified continues to plan for fiscal solvency.

District Report

• Review Executive Summary• Overview of State Mid Year Trigger Scenarios• Priority Planning

Efforts to Raise Funds Parcel Tax

◦ Extended existing parcel tax in the November 2008 election $9.2 million for Libraries, Athletics, Teachers,

Counselors, materials and textbooks, and more◦ Made the effort in November of 2010 to pass an

additional parcel tax MRAD – Maintenance Recreation Assessment

District funding ◦ $5.5 million toward keeping up the grounds and

outdoor facilities and special outdoor projects Bond Program

◦ Taken on capital projects previously funded by Deferred Maintenance funding

Effort to Close Deficit State of California adopted the Flexibility

Funding Program◦ Tier III Flexibility enacted by the Board of

Education◦ K-3 Class Size reduction flexibility enacted by the

Board Innovation by maximizing Federal funds to operate

program

Federal Stimulus Funding◦ Has provided a way for the District to offer

K-3 Class Size Reduction Summer School Programs Safety Positions

The last of this funding “Ed Jobs” expires at the end of this year

Effort to Close the Deficit

Efforts to Close Deficit Through shared commitments and sacrifices

from our employees Reduced the work year for all employees

Saving over $4.4 million per year through 2011-12 Capped the amount the District will provide

toward health care benefits Saving over $9.9 million per year

Efforts to Close Deficit Through shared commitments and

concessions from the unions Increased class size at secondary schools

◦ Saving $3.2 million Sunset the lifetime benefit program

◦ Long term savings of $277 million

Efforts to Close Deficit School Closure

◦ Closed 3 schools and 2 other facilities◦ Partnered with City of Richmond and City of San

Pablo to keep schools open City of Richmond $1.5 million, 2010-11 and 2011-12

City of Richmond has made an ongoing commitment City of San Pablo $300 thousand, 2009-10, 2010-11

and 2011-12◦ Cumulative savings/revenue through 2011-12

$8.4million

The Board has directed staff to take the steps necessary to pay off the State Loan

The final payment for the Voluntary Integration Program (VIP) audit will be made this year

Retiring these two debt obligations has relived the general fund ◦ State Loan payment $1.4 million◦ VIP Debt $872,000

Long Term Debt

The Board has expressed an interest in paying off the IBM debt using one-time fund balance

If the Board chooses to retire the IBM debt◦ IBM $625,000 annual payment

In order to pay off IBM the Board would need to use $3.7 million

Certificates of Participation only remaining general fund debt

Long Term Debt

◦ If the State General Fund revenue falls $2 billion or more short of the projection in the budget there will be reduction to K-12 Revenue Limit

The actual amount will be in proportion to the shortfall that exceeds $2 billion

If the $2 billion shortfall occurs the estimated cut to K-12 schools, statewide, could be as much as $1.5 billion

West Contra Costa’s revenue cuts per ADA are projected at $7.2 million plus $948,000 in transportation funding if the State is short the full $1.5 billion (in excess of the $2 billion)

Budget Adoption – State Triggers

As an example, for approximately every $214 million of State shortfall, the District is cut $1 million – plus a proportional transportation cut

State Mid Year “Triggers”

State Revenue Projection is Short

Projected District Revenue

Reduction

Projected Transportation

Reduction

Projected District Reduction

2 Billion 0 0 02 Billion + $214 million $1,040,000 $135,500 $1,175,5002 Billion + $642 million $3,120,000 $406,500 $3,526,5002 Billion + $1.5 billion $7,280,000 $948,500 $8,228,500

Will Mid-Year Triggers happen?◦ The conditions for the triggers exist◦ The most recent reports show the State is $654 million

short as of September

Legislation would be required to delay the enactment of triggers

Absent the enactment of the triggers the January Governor’s Budget would have to address the shortfall by making cuts for 2012-13

Priority Setting with Mid-Year Triggers

Depending upon the level of Mid-Year Triggers the District can use reserves to sustain programs

If the State is short the full $1.5 billion reserves and cuts were enacted for $8.2 million reserves would last only through 2012-13 unless cuts are made

Priority Setting with Mid-Year Triggers

Board has previously identified◦ School Resource Officer Reduction $1 million◦ Adult Education Program Reduction $1 million

If these two reductions were enacted in 2012-13 the reserves would carry further into 2013-14

Priority Setting with Mid-Year Triggers

Furloughs are restored ◦ Does not include restoration of Teacher Staff Development Days

Use of one time funding or limited term funding for unrestricted programs ◦ Tier III Funding and Special Reserve are in use

City of Richmond support necessary to maintain schools on closure list◦ Shannon and Lake Scheduled to close

Multi-Year Projection 2012-13Approved June 30, 2011

K-3 Class Size Reduction – eliminated due to one time federal funding

Maintains….◦ 180 Day School Year◦ Adult Education◦ School Resource Officers

September 7, 2011◦ Board Approves Resolution to pay off State Loan

Multi-Year Projection 2012-13

Approved June 30, 2011

Summer School

Curriculum Needs : Reading Language Arts

Class Sizes at Secondary Levels

Support and Staffing◦ Technology◦ Maintenance and Operations◦ Communication

Multi Year Planning Concerns

Multi-Year Planning – years to come

Parcel tax is a limited term funding source

◦ Expires 2014-15

Health and Welfare Benefits

◦ Rates for benefits continue to increase for those who retired prior to cap

State flexibility funding – Legislation needed for permanent fix

◦ Tier III flexibility sunsets June 2015

◦ K-3 CSR flexibility sunsets June 2014

High Range Mid-Year Trigger

Unrestricted Summary HIGH RANGE STATE REVENUE SHORTFALL 2011-12 2012-13 2013-14Revenues 170,108,721 178,664,474 175,657,006 State Short $2 billion + $1.5 billion and assume ongoing (8,228,500) (8,228,500) (8,228,500) Expenses and Transfers 169,159,333 170,967,925 174,095,410 Deficit Spending (7,279,112) (531,951) (6,666,904) Beginning Fund Balance 15,782,936 8,503,824 7,971,873 Ending Fund Balance 8,503,824 7,971,873 1,304,969 Required Reserve 7,821,134 7,671,873 7,818,249 Stores and Revolving Cash 300,000 300,000 300,000 Remaining Balance 382,690 - (6,813,280) Note: Transfer from Special Reserve included in Revenue 8,322,795 1,677,205

Mid Year Triggers - Ongoing State Cuts enacted for 2012-13 - No Programs or Expenses Added or Deleted

These figures take into account the pay-off of the State Loan and the VIP debt.Special Reserve fund is depleted in this scenario.

Mid-Range Mid-Year Trigger

These figures take into account the pay-off of the State Loan and the VIP debt.Special Reserve fund is not used until 2013-14 in this scenario.

Unrestricted Summary MID RANGE STATE REVENUE SHORTFALL 2011-12 2012-13 2013-14Revenues 170,108,721 170,341,679 176,979,801 State Short $2 billion + $642 million and assume ongoing (3,526,500) (3,526,500) (3,526,500) Expenses and Transfers 169,159,333 170,967,925 174,095,410 Deficit Spending (2,577,112) (4,152,746) (642,109) Beginning Fund Balance 15,782,936 13,205,824 9,053,078 Ending Fund Balance 13,205,824 9,053,078 8,410,969 Required Reserve 7,821,134 7,671,873 7,818,249 Stores and Revolving Cash 300,000 300,000 300,000 Remaining Balance 5,084,690 1,081,205 292,720 Note: Transfer from Special Reserve included in Revenue - 3,000,000

Mid Year Triggers - Ongoing State Cuts enacted for 2012-13 - No Programs or Expenses Added or Deleted

Priority PlanningKept/Restored 2012-13 Multi Year Projection 6-30-11Adult Education $ 1 millionSchool Resource Officers $ 1 millionEmployee Furlough Days $ 2.5 millionMaintained 180 day school year $ 3.9 millionEliminated in 2012-13 Multi Year Projection 6-30-11K-3 Class Size Reduction (federal funds expire)

Continue 28:1 = 6 additional teachers 366,000$ Class Size Grades K-2 at 24/Grade 3 at 28 $ 3.1 million

Shannon and Lake Elementary 600,000$ Delayed Additional Support for Curriculum and Textbook adoptions 325,000$ High School Class Sizes - 15 fte 915,000$ Support Services - Technology, Custodial, Communications… To be determined

Priority Planning

Priority Planning

Restore/Maintain in This Order1 2 3 456789

December 7, 2011◦ Multi-Year Plan & Financial Projection will be included in the First

Interim Report Mid December 2011

◦ Scheduled Announcement of Mid-Year Triggers January 2012

◦ Governors Budget Proposal February 2012

◦ Lay off if required March 2012

◦ Second Interim Report May 2012

◦ Governors May Revision June 2012

◦ District Budget Adoption for 2012-13

Next Steps

Priority Planning

Priority Planning OptionsAdult EducationSchool Resource OfficersK-3 Class Size Reduction (federal funds expire)

Continue 28:1 = 6 additional teachersClass Size Grades K-2 at 24/Grade 3 at 28

Shannon and Lake Elementary Curriculum and Textbook adoptionsHigh School Class SizesSupport Services - Technology, Custodial, Communications…Pay Off IBM Debt using reserves

Priority Planning

Restore/Maintain in This Order

1 2 3 4 5 6 7 8 9

28

Information Available at…

West Contra Costa Unified School District Website

www.wccusd.net