Transcript First Interim Budget Presentation 2011-12

First Interim Budget Report 2011-12
Activity through October 31, 2011
Presented December 13, 2011
Steven Lawrence, Ph.D., Superintendent
Bryan Richards, Chief Financial Officer
WHY IS THE ENDING BALANCE HIGHER
THAN PROJECTED LAST YEAR?
Revenue
2nd Int
Est Act
Actuals
164,735,676
166,281,005
164,298,896
337,272
337,273
575,246
State
31,194,239
31,199,245
34,034,994
Local
2,535,869
3,162,628
4,145,444
Interfund
1,572,413
1,572,413
1,572,413
200,375,469
202,552,564
204,626,993
Revenue Limit
Federal
Total Revenue
WHY IS THE ENDING BALANCE HIGHER
THAN PROJECTED LAST YEAR?
Expenditures
2nd Int
Est Act
Actuals
Cert Sal
87,399,211
87,367,899
85,303,132
Clsf Sal
19,807,654
20,241,703
19,756,243
Benefits
31,778,504
31,086,101
29,970,211
Bks/Supp
7,447,827
4,752,810
3,160,474
Svc/Othr
14,860,512
15,614,258
11,173,754
112,424
92,425
189,526
2,925,484
3,425,484
3,475,778
Net Contrib
31,393,058
31,773,090
30,845,512
Total Exps
195,724,674
194,353,770
183,874,630
Capital
Interfund
WHY IS THE OPENING BALANCE HIGH?

Cash Flow & State Deferrals:


Deferrals increased by $8.55M
Need higher fund balance to maintain positive cash
Programmatic & site budget carryovers $7.5M
 Late one time revenue payments

2009-10 SDA Adjustment $2M
 Prior year mandated costs $1.4M
 State Fiscal Stabilization supplement $1.6M


Held off spending anticipating an across the
board cut of $330/ADA, now pending as “trigger
cuts”
WHY DO WE NEED A HIGH BALANCE?

The state faces another severe deficit and even
steeper reductions in spending on core services,
particularly education at all levels.
- Contra Costa Times, December 13, 2011
To deal with declining enrollment
 To deal with cuts to state funding
 To equip us to keep programs going as long as we
can until the State’s situation turns around
 To strive not to have more layoffs

2011-12: NO COLA + TRIGGER CUTS
The 2.24% COLA has been fully offset by an
addition to the deficit factor
 The county advises planning for no COLA in the
next two years as well
 County advises planning on mid-year trigger cuts
being ongoing

FUNDED REVENUE LIMIT 2011-12 VS. 2010-11
Mt. Diablo Unified School District
$6,489.02
$6,346.02
$1,281.84
Loss due to Deficit
Factor
$5,206.08
$1,139.94
Loss due to Remaining
Deficit Factor
$5,207.18
Funded Revenue Limit
Funded Revenue Limit
2010-11
2011-12
Graph courtesy of School Services of California, Inc.
WHAT DOES A 19.754% CUT LOOK
LIKE?
School year is 180 days
 19.754% of school year is 35.56 days
 To cut school by 19.754% we would have to close after
school ended on April 25th
 A 19.754% reduction of the school day would equal
over 1 hour less instruction daily

10/11 REVENUE LIMIT CUT WIDENS TO $1,282/ADA
MDUSD Revenue Limit Funding per ADA
6,879
6,691
6,750
6,489
6,371
6,109
6,250
Dollars $ per ADA
6,346
Revenue Limit
5,780
5,750
5,528
5,630
Actual 11-12 Budget
5,528
5,206
5,125
5,207
5,207
5,207
5,250
5,079
4,948
4,750
2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
Year
DECLINING ENROLLMENT
 We
are still in declining enrollment
funding model
 We are projecting a decline of 201.15
ADA in 2011/12 from 2010/11
 This does not include effect of
potential charter school conversion
since district will still have to report
their ADA
MDUSD ADA IS STILL DECLINING!
P-2 ADA
35,000
34,500
34,000
33,500
33,000
32,500
32,000
31,500
31,000
30,500
30,000
P-2 ADA
HOW DOES REVENUE LIMIT FUNDING LOOK?
Revenue Limit
200,000,000
195,000,000
190,000,000
185,000,000
180,000,000
175,000,000
170,000,000
165,000,000
160,000,000
155,000,000
150,000,000
Revenue Limit
*Includes
$11M
reduction
due to
CVHS
Charter
UNRESTRICTED GENERAL FUND REVENUE
 Revenue
Limit Sources
$ 165,734,968
 Federal Revenue
347,273
 Other State Revenue
31,848,432
 Other Local Revenue
1,893,298
 Interfund Transfers In
0
 Total Revenue
199,823,972
 Less: Net Contrib. to RGF
(40,719,672)
 Net Available Revenue
$ 159,104,300
Mt. Diablo Unified School District
Unrestricted General Fund Revenues Before Contributions
2011-12 Total = $199,823,971
Federal Revenue
0.2%
Revenue Limit
Contributed to
Restricted
20.4%
State Revenue
15.9%
Local Revenue
0.9%
Interfund Transfers In
0.0%
Revenue Limit
62.6%
Revenue Limit is 83% of unrestricted general fund revenue.
UNRESTRICTED GENERAL FUND
EXPENDITURES
 Certificated
Salaries
 Classified Salaries
 Employee Benefits
 Books & Supplies
 Services & Operating
 Capital Outlay
 Other Outgo
 Interfund Transfers Out
 Total Expenditures
$
92,623,130
19,414,849
33,487,888
5,538,316
12,584,907
179,420
0
3,904,687
167,733,197
Mt. Diablo Unified School District
Unrestricted General Fund Expenditures and Transfers Out
2011-12 Total = $167,733,197
Certificated Salaries
55.22%
Interfund Transfers
Out
2.33%
Capital Outlay
0.11%
Services &
Operating
7.50%
Books and Supplies
3.30%
Classified Salaries
11.57%
Employee Benefits
19.96%
Salaries and Benefits make up 86.75% of expenditures & transfers out
UNRESTRICTED GENERAL FUND SUMMARY
Net Available Revenue
 Net Expenditures
 Net (decrease) fund bal.
 Beginning Balance, July 1
 Projected Ending Balance

$
$
159,104,300
167,733,197
(8,628,897)
45,543,430
36,914,533
COMPONENTS OF ENDING BALANCE
Revolving Cash
$ 300,000
 Stores Inventory
419,478
 Economic Uncertainties (2%)
5,857,997
 IRS Assessment Resolution
533,500
 Tier 3 Balances & Site carryovers
6,851,032
 State trigger cuts
9,686,366
 Undesignated
13,266,160
 Ending Balance
$ 36,914,533

RESTRICTED GENERAL FUND REVENUE
 Revenue
Limit Sources
 Federal Revenue
 Other State Revenue
 Other Local Revenue
 Interfund Transfers In
 Contribution from Unr.
 Total Revenue
$ 7,134,045
26,528,680
40,072,781
10,130,583
0
45,275,298
$129,141,387
Mt. Diablo Unified School District
Restricted General Fund Revenue
2011-12 Total = $129,141,387
Contribution from
Unrestricted
35.06%
Local Revenue
7.84%
Revenue Limit
5.52%
Federal Revenue
20.54%
State Revenue
31.03%
RESTRICTED GENERAL FUND EXPENDITURES
 Certificated
Salaries
$ 37,464,789
 Classified Salaries
19,991,549
 Employee Benefits
23,038,613
 Books & Supplies
14,427,980
 Services & Other Operating
27,908,185
 Capital Outlay
1,798,331
 Other Outgo
1,215,293
 Indirect Costs
3,877,515
 Total Expenditures
$ 129,722,255
Mt. Diablo Unified School District
Restricted General Fund Expenditures
2011-12 Total = $129,722,255
Capital Outlay
1.39%
Services & Other
Operating
21.51%
Books & Supplies
11.12%
Other outgo
0.94%
Indirect Costs Xfr
Out
2.99%
Employee Benefits
17.76%
Certificated Salaries
28.88%
Classified Salaries
15.41%
RESTRICTED GENERAL FUND SUMMARY
Total Revenue
 Total Expenditures
 Net (decrease) in fund bal.
 Beginning Balance, July 1
 Projected Ending Balance

$ 129,141,387
129,722,255
( 580,868)
13,180,547
$ 12,599,679
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


County School Facilities Fund (Developer Fees)
– Fund 35I
Capital Project Fund for Blended Component
Units (Mello-Roos Measure A) – Fund 49I
 Debt


Service Funds
Bond Interest & Redemption Fund (Measure C)
– Fund 51I
Debt Service Fund for Blended Component Units
(Measure A) – Fund 52I
 Trust

Project Funds (continued)
Funds
Foundation Private-Purpose Trust Fund – Fund
73I
SUPPLEMENTAL INFORMATION
Form AI: Average Daily Attendance decrease of
(201.15) in 11/12 will decrease funding for 10/11.
 Form CASH: Cash Flow – Ending GF cash will be
positive but projecting a decline of $9.2M
 Form RLI: Revenue Limit Calculations
 Form 01CSI: Criteria & Standards
 Form CI: Certification to sign summarizes
Criteria & Standards – QUALIFIED Cert.

CLAYTON VALLEY CONVERSION CHARTER
EFFECT – UNRESTRICTED GENERAL FUND
Revenue Limit decrease
$ (10,924,996)
 Rent on CVHS property
450,649
 1% oversight fee
116,536
 Certificated Salary decrease
4,591,659
 Classified Salary decrease
510,091
 Benefits decrease
1,525,846
 Books & supplies decrease
71,152
 Services & operating decrease
307,349
 Tier 3 pass through ($127/ADA)
(225,679)
 Net effect annually
$ ( 3,577,393)


Based on 1,777 units of ADA
FORM MYPI: MULTI YEAR PROJECTION
Undesignated @ 6/12
$ 13,266,160
 Operating Deficit 2012/13
( 8,657,649)
 Trigger cut ongoing 12/13
( 9,626,491)
 Adjustment in 2% reserve
273,974
 Unappropriated Balance 6/13
( 4,744,006)
 Operating Deficit 2013/14
(10,793,323)
 Trigger cut ongoing 13/14
( 9,465,376)
 Adjustment in 2% reserve
1,973
 Unappropriated Balance 6/13 $ (25,000,732)

Based upon first interim guidance, not today’s DOF numbers
QUALIFIED CERTIFICATION –
WHAT DOES IT MEAN?
The District projects that it may not meet its financial
obligations for the current fiscal year or two
subsequent fiscal years.
 We will meet our obligations for this year
 If necessary, we can issue a TRAN to deal with cash
flow
 Department of Finance report came out too late to be
included at first interim
 We may be unable to meet obligations for next year
based on current projections (depending on what form
the additional cuts in the Governor’s January budget
take, whether Clayton Valley converts to charter
status and settlement of outstanding negotiations)

LAO ISSUES BUDGET ASSESSMENT
 State
Revenues tracking $3.7 Billion below
projections
 Projected $13 billion problem by June 2013
 Projects all Tier 1 and about ¾ of Tier 2 trigger
cuts needed to take place
GOVERNOR & DEPARTMENT OF FINANCE
REPORT
State revenues tracking $2.2 Billion below
projections
 Agrees with LAO on size of cumulative problem
over two years
 Projects full transportation cut and about 5-7% of
the additional Tier 2 cut to the revenue limit
 Kicks can to next year for balance of the two year
$13B problem
 Estimated Revenue Limit decrease of $13/ADA
 Estimated Transportation decrease of
$35.94/ADA
 Estimated cut of about $1.6M

WHAT ABOUT SOLAR $?
Solar expected to go online in late Spring 2012
 Savings from COP payments being utilized to
fund intervention teachers
 Savings from electricity helping to ease the
deficit issues we see coming in the budget

WHAT NEXT?
MORE FROM
SACRAMENTO
Governor Brown’s budget will be announced in January
Will include $7B in new taxes proposed in his measure
Will include trigger cuts to re-balance the budget if
measure fails
GOVERNOR BROWN: THERE WILL BE
MORE CUTS NEXT YEAR
 From
today’s press conference: “There will be
more cuts in the January budget for 2012-13, but
not for between January and June of 2012.”
 $13B
hole; taxes cover $7B; need to cut $6B; will
try to protect K-12 on its share of the $6B
 “I
would like to avoid doubling the cuts which will
be the effect if the tax measure fails.”
 DOF
Mantosantos: “All cuts are ongoing.”