First Interim Budget Report Activity through October 31, 2013 Presented December 11, 2013 Nellie Meyer, Ed.D., Superintendent Bryan Richards, Chief Financial Officer

LCFF: A W HOLE N EW W ORLD The entire revenue limit has been thrown out. We have a new mechanism for calculating revenue, the Local Control Funding Formula Target rates per student by grade level K-3 Base $6,952 plus Grade Span (CSR) $ $7, $7, $8,419 plus Grade Span (was CTE) $219 Supplemental funding of 20% for students who are either English Language Learners, receiving Free & Reduced Lunch or Foster Youth Concentration funding if over 55% of students qualify for supplemental funding (we are at 49%)

LCFF Target Amounts (projected) $263,052,578 Note: MDUSD does not qualify for concentration funding.

LCFF Funding Amounts (projected) $204,633,181 Note: MDUSD does not qualify for concentration funding.

D ECLINING ENROLLMENT We are still in a declining enrollment funding model We are projecting a decline of ADA in 2013/14 from 2012/13

MDUSD ADA IS STILL DECLINING !

U NRESTRICTED G ENERAL F UND R EVENUE RL/LCFF Sources$ 160,026,120 Federal Revenue 238,982 Other State Revenue 33,504,486 Other Local Revenue 4,274,874 Interfund Transfers In 0 Total Revenue 198,044,462 Less: Net Contrib. to RGF (40,154,876) Net Available Revenue $ 157,889,586

LCFF/Revenue Limit is 80.2% of unrestricted general fund revenue. This will grow once conversion of former categoricals is complete.

U NRESTRICTED G ENERAL F UND E XPENDITURES Certificated Salaries $ 93,809,129 Classified Salaries 20,250,709 Employee Benefits 32,596,808 Books & Supplies 4,199,616 Services & Operating 10,960,862 Capital Outlay 181,600 Other Outgo 0 Interfund Transfers Out 3,519,751 Total Expenditures 165,518,475

Salaries and Benefits make up 88.6% of expenditures & transfers out

U NRESTRICTED G ENERAL F UND S UMMARY Net Available Revenue $ 157,889,586 Net Expenditures 165,518,475 Net (decrease) fund bal. ( 7,628,891) Beginning Balance, July 1 42,300,356 Projected Ending Balance $ 34,671,465

C OMPONENTS OF E NDING B ALANCE Revolving Cash $ 305,000 Stores Inventory 462,769 Economic Uncertainties (3%) 8,972,226 Tier 3 Balances & Site carryovers 4,809,058 Undesignated 20,122,412 Ending Balance $ 34,671,465

R ESTRICTED G ENERAL F UND R EVENUE Revenue Limit Sources $ 9,240,654 Federal Revenue 29,650,481 Other State Revenue 42,911,990 Other Local Revenue 8,635,988 Interfund Transfers In 0 Contribution from Unr. 42,765,960 Total Revenue $133,205,073

R ESTRICTED G ENERAL F UND E XPENDITURES Certificated Salaries $ 38,145,027 Classified Salaries 20,014,237 Employee Benefits 21,895,621 Books & Supplies 24,624,578 Services & Other Operating 28,407,152 Capital Outlay 707,394 Other Outgo 254,994 Indirect Costs 2,117,778 Interfund Transfers Out 0 Total Expenditures $ 136,166,781

R ESTRICTED G ENERAL F UND S UMMARY Total Revenue $ 133,205,073 Total Expenditures 136,166,781 Net (decrease) in fund bal. ( 2,961,708) Beginning Balance, July 1 11,183,370 Projected Ending Balance $ 8,221,662

O THER F UNDS OF THE D ISTRICT 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 Measure C for construction) – Form 21I Capital Facilities (a.k.a. Developer Fees) – Form 25I

O THER F UNDS OF THE D ISTRICT ( CONT ’ D ) Capital Project Funds (continued) County School Facilities Fund (Statewide bond proceeds for construction like Prop 1A, 55) – 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 Funds Foundation Private-Purpose Trust Fund – Fund 73I

S UPPLEMENTAL I NFORMATION Form AI: Average Daily Attendance continues do decrease as noted above. We continue to be funded on prior year when declining under LCFF. Projected decrease of (287.32) in 2013/14 affects funding in 2014/15. Form CASH: Cash Flow – Ending GF cash will be positive. Deferrals have stabilized and begun to be bought down as part of Governor Brown’s Wall of Debt plan Form 01CSI: Criteria & Standards Form CI: Certification to sign summarizes Criteria & Standards – QUALIFIED Certification because State has not determined if funding will be beyond COLA for next year.

F ORM MYPI: M ULTI Y EAR P ROJECTION 6/14 $ 20,122,411 Operating Deficit 2014/15 (12,234,883) Adjustment in 2% reserve (23,587) Unappropriated Balance 6/14 7,863,941 Operating Deficit 2014/15 (15,763,605) Adjustment in 2% reserve (17,961) Unappropriated Balance 6/15 $ (7,917,625) Based upon first interim guidance to budget only COLA until the State’s budget comes out.

Q UALIFIED C ERTIFICATION – W HAT DOES IT MEAN ? The District projects that it may not meet its financial obligations for the current fiscal year or two subsequent fiscal years if the State only funds the equivalent of the COLA. We will meet our obligations for this year and next year. We may be unable to meet obligations for the third year out based on current projections (depending on what comes in the Governor’s January budget). DOF preliminary calculations in the LCFF calculator indicate we will get funding above the COLA, but it has not yet been proposed in the budget.

LAO I SSUES B UDGET A SSESSMENT SCO C ASH R EPORT State revenues have finally turned the corner and are on track to rise Projections indicate that Proposition 98 funding will increase beyond the COLA The SCO indicated while November came in low, year to date State cash collections are up.

W HAT NEXT ? M ORE FROM S ACRAMENTO Governor Brown’s budget will be announced in January LCFF / LCAP regulations due in January LCAP Templates due from State by March Our LCAP and Budget due by July 1 Two Hearings on each to happen in June Public Input sessions during winter & spring