Transcript Slide 1

SAN DIEGO UNIFIED SCHOOL
DISTRICT
Board of Education
2012/13 Budget Adoption
First Reading
June 22, 2012
Presented by: G. Wayne Oetken
Interim Chief Financial Officer
Presentation Agenda
• Opening Remarks
• Implications of State Budget
• Fiscal Realities
• Superintendent’s Recommended Budget
• Multi-Year Assumptions
& Budget Uncertainties
• TRANs Loan Implications
• Closing Remarks/Next Steps
2
Implications of State Budget
 The Proposed District Budget is Based on the
Governor’s May Revised Budget
 Reduction of $441 Per ADA in State Funding Must Be Planned
for 2012/13 Assuming the Governor’s Tax Initiative Fails
 SDCOE Strongly Recommends No COLA for 2012/13 or
2013/14 years or District to Set Aside a Contingency Reserve
3
Serious Fiscal Realities
2012/13 - 5th Straight Year of Funding Reductions
 First Reading :
 Update Budget Assumptions/ Fiscal Realities
 Highlight Multi-year Risks
 One-Time Solutions Create Multi-Year Problems
 Significant Deficits Projected for 2013/14
 Limited Options to Solve the Budget Gap
 More Reductions will be Necessary in 2013/14
 Budget Must be Submitted to the SDCOE by
July 10, 2012
4
General Fund Deficit
2009/10 to 2014/15
Total Budget Reductions Over 5 Years Is $555.5 Million
$175.0
$134.6
$120.0
$150.0
$125.0
$93.1
$82.0
$98.3
$100.0
$75.0
$50.0
$27.5
$25.0
$-
-If 2013/14 Solutions are all on-going then the District would need to reduce only $27.5 Mil
in 2014/15
5
Superintendent’s Recommended
Budget
 The Superintendent’s Recommended Budget
Accomplishes the Following Important Goals
 Supports Successful TRANs Issuance in Early July
 Manages Multi-Year Deficits
 Maintains State Required 2% Minimum Reserve Level
6
Total All Funds 2012/13 Compared To
2011/12
2011/12 Adopted Budget
Total Other
Funds
$844.35
42%
Total Budget
$2.0 Billion
General
Fund
Unrestricted
$726.22
37%
General
Fund
Restricted
$425.44
21%
2012/13 Proposed Budget
Total Other
Funds
$748.69
41%
Total Budget
$1.8 Billion
General Fund
Unrestricted
$623.13
34%
General Fund
Restricted
$446.00
25%
-Current Proposed Budget Reflects 9% Reduction Across All Funds
-General Fund Unrestricted Budget Includes One-time Transfers From Other Funds of $41Mil
7
Total General Fund 2012/13 Compared To
2011/12
$550.0
$500.0
$450.0
$400.0
$350.0
$300.0
$250.0
$200.0
$150.0
$100.0
$50.0
$-
2011/12 Adopted Bdgt
2012/13 Proposed Bdgt
Certificated
Salaries
Classified
Salaries
Employee
Benefits
Reserves
Books &
Supplies
$507.95
$464.77
$178.25
$180.57
$285.21
$268.83
$71.58
$32.84
$48.75
$47.62
-2012/13 Proposed Total General Fund Budget is $1,077.57 Mil
-2011/12 Adopted Total General Fund Budget is $1,165.07 Mil
8
Utilities,
Indirects,
Other
$59.91
$74.51
Other
Outgo
Capital
Outlay
$7.03
$6.89
$6.38
$1.55
Total General Fund Unrestricted 2012/13
Compared To 2011/12
$400.00
$350.00
$300.00
$250.00
$200.00
$150.00
$100.00
$50.00
$-
Certificate Classified Employee
d Salaries Salaries
Benefits
2011-12 Adopted Budget $351.59
2012-13 Proposed Budget $304.83
$84.56
$81.51
$178.82
$156.25
Reserves
Books &
Supplies
$53.87
$32.84
$14.95
$10.96
Utilities,
Indirects,
Other
$42.42
$36.74
-2012/13 Proposed Total General Fund Unrestricted Budget is $624.15 Mil
-2011/12 Adopted Total General Fund Unrestricted Budget is $729.00 Mil
9
Other
Outgo
Capital
Outlay
$2.28
$0.82
$0.50
$0.20
Total General Fund Restricted 2012/13
Compared To 2011/12
$200.00
$150.00
$100.00
$50.00
$-
2011-12 Adopted Budget
2012-13 Proposed Budget
Certificated
Salaries
Classified
Salaries
Employee
Benefits
Reserves
Books &
Supplies
$156.36
$159.93
$93.69
$99.05
$106.39
$112.58
$17.71
$-
$33.79
$36.66
Utilities,
Indirects,
Other
$17.50
$37.77
-2012/13 Proposed Total General Fund Restricted Budget is $453.42 Mil
-2011/12 Adopted Total General Fund Restricted Budget is $436.07 Mil
10
Other
Outgo
Capital
Outlay
$4.75
$6.07
$5.88
$1.35
Other Restricted Funds - 2012/13
Budget
Fund
11
12
13
14
15
20
21
25
35
40
51
67
11
Fund Name
Adult Education
Child Development
Cafeteria Fund
Deferred Maintenance
Transportation Fund
Special Reserve - PostEmployment Benefits
Building Fund - Prop S
Re-Development Agency
County School Facilities
Property Management Fund
Bond Interest
Self-Insurance
$
$
$
$
$
Beginning
Balance
64,875
402,298
3,155,805
225,166
80,619
$
$
$
$
$
$
$
$
$
$
$
$
1,325,173
183,835,784
7,978,233
157,033,346
9,589,381
24,675,243
60,011,751
$
562,492
$
880,000
$ 23,773,000
$ 11,434,936
$ 32,317,000
$ 117,074,197
$ 27,577,949
Revenues
731,000
23,042,814
62,919,671
125
250
Expenses
733,578
23,042,814
62,865,610
-
$
$
$
$
$
Ending
Balance
62,297
402,299
3,209,866
225,291
80,869
$
568,475
$ 117,868,782
$ 26,298,687
$ 19,982,674
$ 39,618,498
$ 106,567,417
$ 29,961,476
$
$
$
$
$
$
$
1,319,190
66,847,002
5,452,545
148,485,608
2,287,883
35,182,023
57,628,224
$
$
$
$
$
County Office of Education:
Budget Development Requirements
SDCOE Recommendations:
• Assume the Trigger Reduction of $441 Per ADA
• Unfunded COLA in 2012/13 and 2013/14 or Set
Up a Contingency Plan/Reserve
12
Multi-Year Assumptions – Revenues
Revenue
Projected Districtwide ADA
2014/15
106,613
3.24%
2.50%
2.70%
Unfunded
Unfunded
Unfunded
Revenue Limit Deficit
22.27%
22.27%
22.27%
Revenue Limit Adjustment Per ADA
($441)
($441)
($441)
Special Disabilities Adjustment (SDA)
-0-
-0-
-0-
Mandated Costs Reimbursement
-0-
-0-
-0-
Flexibility
Flexibility
No
Flexibility
-0-
2.5%
2.7%
$42.5 Mil
$11.7 Mil
$11.7 Mil
-0-
-0-
-0-
Class Size Reduction (CSR)
Restricted Resources (Categorical)
Transfers In (Includes CCDC)
Federal Stimulus Funding
107,471
2013/14
107,042
Revenue Limit COLA
13
2012/13
Multi-Year Assumptions –
Expenditures
Expenditures
2012/13
2013/14
2014/15
-0-06 Days
-0-06 Days
-0-06 Days
2.64%
.69%
2.64%
.69%
2.64%
.69%
Salary Increase All Employees
4%
3%
0%
Class Size Reduction (K-3) Student to Teacher Ratio
High Poverty Schools 28 Schools
31:1
28:1
31:1
28:1
31:1
28:1
Health & Welfare Benefits Premium Increase
7%
7%
7%
Districtwide Furloughs:
Step & Column Progression:
14
Certificated
Classified
C/O Management
Certificated
Classified
Multi-Year Assumptions –
Expenditures (cont’d.)
Expenditures
2012/13
2013/14
2014/15
Implemented Board
Solutions/Budget Deficit
$ (120) Mil
$(98) Mil
$(27) Mil **
Materials and Supplies
2.3% CPI
2.4% CPI
2.6% CPI
Contracted Services
2.3% CPI
2.4% CPI
2.6% CPI
2%
2%
2%
$145.0 Mil
$11.8 Mil
$1.2 Mil
$7.9 Mil
$158.1 Mil
$11.8 Mil
$1.3 Mil
$8.2 Mil
$167.2 Mil
$11.8 Mil
$1.3 Mil
$8.3 Mil
Utilities- Increase/(Decrease)
Contributions:
Special Education
Routine Restricted Maintenance
Community Day School
Transportation
15
** Assuming 2013/14 Reductions Are All Ongoing
Multi-Year Assumptions & Reserves
Requirements
Reserves
16
2012/13
2013/14
2014/15
Economic Uncertainties- 2%
$20.9Mil
$19.5Mil
$18.9Mil
Unexpended Set-Asides and Reserves
$7.3Mil
$6.4Mil
$6.4Mil
School Site Ending Balances
$2.1Mil
$2.1Mil
$2.1Mil
Stores Inventory
$1.7Mil
$1.7Mil
$1.7Mil
Prepaid Expenses
$.9Mil
$.9Mil
$.9Mil
Revolving Cash Funds
$.06Mil
$.06Mil
$.06Mil
Multi-Year Assumptions Uncertainties
• Governor’s Budget Veto – Uncertainty on
Timing and Direction of State Budget
• November Tax Initiative Election Result
• Enrollment Decline
• Pre- Kindergarten Implementation of Legal
Requirements and State Funding
17
2012/13 Budget – Superintendent’s Recommendation
Multi-Year Projections- General Fund Unrestricted
LINE
18
2011/12
ESTIMATED
ACTUALS
-2-
DESCRIPTION
-1-
2012/13
2013/14
2014/15
BUDGET
-3-
PROJECTION
-4-
PROJECTION
-5-
1
Beginning Balance
$97,569,207
$60,273,162
$32,979,700
$30,629,840
2
Revenues
752,551,689
687,534,290
687,385,343
670,020,729
3
4
5
6
Expenditures
Necessary Reductions 2013/14
Necessary Reductions 2014/15
Total Expenditures
(646,986,304)
(583,606,164)
(612,634,379)
98,342,854
(646,986,304)
(583,606,164)
(514,291,525)
(611,862,560)
98,342,854
27,531,613
(485,988,093)
7
Other Sources / Uses
(142,861,430)
(131,221,588)
(175,443,678)
(184,615,636)
8
Ending Balance
32,979,700
$30,629,840
9
SURPLUS/(DEFICIT)
$
60,273,162
$
($37,296,045)
($27,293,462)
($2,349,860)
$
30,046,840
($583,000)
10
11
12
13
14
15
16
Required Reserves
Economic Uncertainties
Unextended Balances / Set Aside
School Site Ending Balances
Stores
Prepaid Expenses
Revolving Cash
$21,741,000
5,831,000
2,791,479
1,674,228
850,000
57,800
$20,895,450
7,271,333
2,091,479
1,674,228
850,000
57,800
$19,516,000
6,440,333
2,091,479
1,674,228
850,000
57,800
$18,933,000
6,440,333
2,091,479
1,674,228
850,000
57,800
17
Total Required Reserve
$32,945,507
$32,840,290
$30,629,840
$30,046,840
18
Reserve (Shortfall) / Surplus
$27,327,655
$139,410
$0
$0
2013/14 Shortfall $98.3Mil
2014/15 Shortfall $27.5Mil
2012/13 Budget Solutions List
Reductions in $
Millions
Central Office
Administration
Administrative Reductions
College, Career & Technical Education
Instructional Resources & Materials
Student Programs & Professional Learning
Centrally Managed Site Support
13.85
2.13
0.75
0.12
0.51
0.46
Business, District Relations, Finance, HR, Internal Audit, ITSS,
Transfer 2 FTE to Grant Funding (-no reduction of FTE)
Reduce by 56%; Maintain Williams Compliance
Reduction of 1 FTE and transfer of 3 FTE and $375K of nonpersonnel to Restricted
11.71
POA Concessions
0.77 Employee concessions reached based on MOU-no reduction of FTE
Reduce Centralized Nursing Program
1.48 Restructure model
Visual & Performing Arts Program
1.44 Reduction of program by 50%
Reduce Maintenance Staff
2.25 Reduce General Fund Contribution to Physical Plant Operations
Reduce Special Ed contribution from General Fund
2.98
Additional Classified Layoffs
2.79 List deferred and amended from 2011/12 mid year reductions
Schools
K-3 Class Size Adjustment
Grades 4 through 6
79.65
27.67 28 : 1 at 28 schools. All other schools to 31 : 1. Subject to consultation.
3.98 Allocation from 32 : 1 to 34.6 : 1. Subject to consultation.
Middle School Class Size Adjustment
13.05 Allocation from 28.7 : 1 to 35 : 1. Subject to consultation.
High School/ Small School Class Size Adjustment
21.08 Allocation from 29.1 : 1 to 36.5 : 1. Subject to consultation.
Reduce X-Factor amount
8.82 Schools to determine position reduction
Reduce Principals and Vice Principals
1.17 As part of X Factor and/or other Programmatic Decisions
Counselors Allocation Model Change & Reduction
3.88 Centralized Counseling model. Subject to consultation.
Total Staffing Reductions
93.50
Other Reductions/ Solutions
26.50
Additional CCDC Revenues
One-Time Proceeds from Real Estate Sales
19
NOTES
3.00 Ongoing stepped up threshold (to be confirmed)
21.50 Mission Bay, Barnard & Bay Terrace II
Transfer from Fund 40
1.40 From funds set aside for Met project
Implement Admin Fee for Retirees H&W
0.60 3% Admin Fee for H&W management
TOTAL REDUCTIONS/ SOLUTIONS
120.00
Potential Budget Solutions for FY 2013/14
$98 Mil Projected Balanced Budget Shortfall
Far Fewer Realistic Options Available to Cover Deficits
2013/14 General Fund Unrestricted Solutions to Balance Budget
Potential
Reductions
$ Millions
Centrally Managed Site Support
Eliminate Visual & Performing Arts Program
Eliminate Non Mandated Student Transportation
Eliminate Race, Human Relations Dept
Reduce Adult Education Contribution by 30%
Reduce Police Department by 50%
Reduce Warehouse & Distribution by 50%
Reduce Central Office by 5%
Schools
Reduce Vice Principals by 25%
Close Select Schools
Increase K-3 Class Sizes at 28 schools
20
12.27
1.70
2.00
1.00
0.22
4.25
1.10
2.00
9.65
3.05 VP Pool of 60
4.00 Close 8 schools effective school year 2013/14
2.60 From 28:1 to 31.1 (33 FTE)
Total Staffing Reductions
21.92
Other Reductions/ Solutions
SERP - Early Retirement Incentive
H&W Administrative Changes
Salary Roll Back to Negate Bonus Raises (2011/12 Levels)
58.00
TOTAL REDUCTIONS/ SOLUTIONS
79.92
* Further Actions Are Needed To Identify Additional $18.4 Mil
NOTES
7.50 Predicated on 200 Certificated (TBD)
7.50 Management change/ Competitively Bid (TBD)
43.0 7% salary roll back effective July 1, 2013
2012/13 General Fund Projected Cash Flows
With TRANs Borrowing
$125.0
$100.0
TRANs
Borrowing
$227 Mil
State School
Loan $70 Mil
$75.0
$50.0
$25.0
$-
JUL
AUG SEPT
OCT
NOV
DEC DEC
01-05 06-31
JAN
FEB
MAR APR MAY
JUN
Actual
Projected $37.48 $48.05 $14.62 $13.49 $20.31 $2.63 $117.21 $82.08 $58.69 $27.11 $21.04 $8.31 $34.99
21
Closing Remarks
 Superintendent’s Recommended Budget is the BEST
Course for the District
 Addresses Long-Term Fiscal Solvency
 Enables Successful TRANs to Meet Payroll
 Manages Multi-Year Deficits
 Balances Uncertainty of the Moment
22
Next Steps
23
• June 22
First Reading of 2012/13 Budget
• June 29
Board Budget Adoption
• June 30
Submission of Budget to SDCOE
• July 1
Implementation of 2012/13 Budget
Questions?
24