1. 1 2011-12 Budget Board Item #10.4 Board of Education February 3, 2011

2. Potential Impact of 2010-11 on 2011-12 New State Funds Reserve$8.80M Potential Reduction in Average Daily Attendance($1.75)M Unanticipated Expenses/Savings that didn’t materialize such as:($4.28)M - Special Education Staffing - H. Johnson Feeder Music Program - Energy Education Inc. Performance Fees - Unrealized Energy Savings Total Available Funds for 2011-12$2.77M 2

3. 3 2011-12 Scenario One Tax Extensions/Governor’s Propositions Pass -Revenue Limit Adjustments -$19 per ADA decrease($.80)M -Elimination of Special Ed($.22)M Settlement -Carryover of 2010-11 State Funds$2.77M -Remainder of Unallocated 2010-11$2.77M State Funds -Unallocated Federal Education Jobs $4.38M Funds (after 1% and Common Planning Time) Total Available Revenue$8.90M

4. 2011-12 Scenario One cont’d 4 Known Expenditure Increases - Step/Column/Attrition$2.50M - 10% Health Benefit Increase$5.56M - Use of One-Time Funds to$5.61M Balance 2010-11 - Salaries funded by one-time$.94M IDEA ARRA funds - Additional Staffing Needs$.37M - Licensed Vocational Nurses - Grant Writer - Special Ed Teacher/Aide - Psychologist -.50 Principal J. Morse/Success

5. 2011-12 Scenario One cont’d 5 Known Expenditure Increases (cont’d) - Reinstate 50% Def’d Maintenance$.75M - Strategic Plan Initiatives$2.37M Total Expenditure Increase$18.10M

6. 2011-12 Scenario One cont’d Summary - Revenues $8.90M - Expenditures ($18.10)M Projected Deficit($9.20)M 6

7. 2011-12 Scenario Two Tax Extensions Don’t Pass (Education Funding Reduced by $2 Billion Statewide) -Revenue Limit Adjustments -$349 per ADA Decrease($14.60)M -Elimination of Special Ed Settlement($.22)M -Carryover of 2010-11 State Funds$2.77M -Remainder of Unallocated 2010-11 $2.77M State Funds -Unallocated Federal Education Jobs$4.38M Funds (after 1% and Common Planning Time) Total Available Revenue ($4.90)M 7

8. 2011-12 Scenario Two cont’d 8 Known Expenditure Increases - Step/Column/Attrition$2.50M - 10% Health Benefit Increase$5.56M - Use of One-Time Funds to$5.61M Balance 2010-11 - Salaries funded by one-time$.94M IDEA ARRA funds - Additional Staffing Needs$.37M - Licensed Vocational Nurses - Grant Writer - Special Ed Teacher/Aide - Psychologist -.50 Principal J. Morse/Success

9. 2011-12 Scenario Two cont’d 9 Known Expenditure Increases (cont’d) - Reinstate 50% Def’d Maintenance$.75M - Strategic Plan Initiatives$1.72M Total Expenditure Increase$17.45M

10. 2011-12 Scenario Two cont’d Summary - Revenues( $4.90)M - Expenditures ($17.45)M Projected Deficit($22.35)M 10

11. Strategic Plan Initiatives – Scenario One Pillar One – Career- and College- Ready Students - Inclusive Practices$.70M - Common Core$.50M - Math/Literacy$.65M - Early Kinder Program$.12M - GATE AP$.15M Pillar Three – Organizational Transformation - Enrollment Center$.25 M Total General Funds Needed$2.37 M 11

12. Strategic Plan Initiatives – Scenario Two Pillar One – Career- and College- Ready Students - Inclusive Practices $.70M - Common Core$.30M - Math/Literacy$.35M - Early Kinder$.12M Pillar Three – Organizational Transformation - Enrollment Center$.25M Total General Funds Needed$1.72M 12

13. Other Strategic Plan Initiatives Other Strategic Plan Initiatives Funded with Title I Categorical Dollars - Pillar One – Career- and College- Ready Students - Data Inquiry$.50 M - School Quality Review $.45 M - RtI/PBIS $.60 M - Pillar Two – Family and Community Engagement - Home Visit Project $.25 M - Pillar Three – Organizational Transformation - Equity Training $.15 M Total Title I Funded Initiatives$1.95 M 13

14. 14 Potential Options to Balance 2011-12 Scenario One - Federal Education Jobs Funds - Retain Bonus$2.35M - Receive remaining 10% from state$.80M - Tier III Reductions - Reduce Adult Education$2.00M - Instructional Materials Block Grant$.50M - School Library Improvement Block$.23M Grant - Teacher Credential Block Grant$.10M - Savings from COP Remarketing $.50M (No QSCBs)

15. 15 Potential Options to Balance 2011-12 Scenario One (cont’d) - Negotiable - Increase 7-8 Class Size by 4 students$1.70M - Current 31:1 to 35:1 - Bring class size in line with 9-12 - Percent pay reduction equivalent$.87 M to furlough days Total to Balance Scenario One ($9.20M) $9.05M

16. Potential Options to Balance 2011-12 cont’d Options from Scenario One $9.05M Negotiable - Increase 9-12 Class Size by 5 students$3.60M - 35:1 to 40:1 - Increase 7-8 Class Size by 1 student$.40M - 35:1 to 36:1 - Increase 4-6 Class Size by 1 student$1.35M - 33:1 to 34:1 Reduce Adult Education $1.00M Eliminate Home to School Transpt’n $.98 M Sub-Total to help Balance $16.38M Scenario Two ($22.35M) Shortfall ($5.97)M 16

17. Other Potential Options to Balance 2011-12 Negotiable - Pay Reductions – 1%-5% - all employees - Review Health Benefit Options – all employees - Freeze Step and Column – all employees Does Not Require Negotiations - Eliminate Co-Curricular Support - K-8, Middle – Stipends - High School – Stipends, Transportation, Uniform Replacement, Athletic Trainer - Eliminate Deferred Maintenance Funds - Eliminate Adult Education - Reduce Counselors - Print Shop Generate Revenue – Self Supporting - Summer School Program Generate Revenue 17

18. Central Office Central Office (including Serna Center, Special Education, Capital Asset Management Services and Distribution Services) are 17.9% of district budget Right Sized in 2010-11 - Deep staffing reductions 2010-11 staffing savings accounted for 17% of the overall shortfall of $32.5 million Central Office staffing savings of $7.5 million over last two years alone 18

19. 19 Next Steps Receive Board Input and Continue to Develop Proposed Options Continue to Analyze State Budget Information Budget Survey to Parents/Community/ Staff/Students Community Budget Information Meetings Certificated Lay Off Notices by March 15 - Education Code Deadline

20. 20 Next Steps cont’d Second Interim Approved by March 15 - Action needed to balance 2011-12 - Qualified Certification - May not meet financial obligations for current and two subsequent years - Negative Certification - Unable to meet financial obligations for current or the subsequent year - Financial Oversight - Loss of decision making authority

21. 21 Next Steps cont’d Classified Lay Off Notices if Needed Governor’s May Revise Report Potential Vote on Legislation to Extend Tax Increases Public Hearing and Adoption of 2011-12 Budget Continue Communication with Board and Stakeholders