First Interim Report December 15, 2011

Tonight’s Presentation District’s first interim report To provide a summary to the Board of our current financial situation with updated assumptions and projections District’s multi-year outlook To provide a summary to the Board of the assumptions of multi-year projections Presentation of E-2 Identification of the budget reductions and fiscal plan for the San Diego County Office of Education

Budget Most change occurs from the adoption of the Budget (July 1 st ) until the First Interim Report State of California Budget is not even signed Adopted budget had a revenue limit reduction built in Increased revenue limit is the largest change Previous year’s Budget is not finalized Unspent dollars from the previous year needs to be budgeted in current year Changes to expenses due to carryover is the largest change Information on other budget items are not known Final cost increases of health care Summer time resignations enrollment

The Budget, First Interim Totals Total Revenues$46,217,387 Total Expenses$53,248,092 Difference($ 7,030,705) Transfer from Fund 17 $ 986,000 Beginning Balance $ 8,194,395 Ending Balance* $ 2,149,690 *Projected Ending Balance for June 30, 2011

Carryover Factored Into Budget Carryover in Budget* Site/Dept. Carryover $ 666, Formerly Restricted Cat. $ 1,214, Restricted Cat. $ 1,285, Total $ 3,166, Consists of budgeted expenditures, no new revenues Revenues are from previous years *From Unaudited Actuals (page 2), which was presented to the Board in August 2010

Multi-Year Projections State requires each district to project out current year and next two fiscal years to maintain fiscal health and to identify any significant issues RUSD’s reserve meets State’s requirement for Triggers? RUSD’s reserve will not meet the State’s requirement for Qualified Status: A district might not be able to meet its financial obligations for the current and two (2) additional years

Our current projections Revenue46,217,38746,102,06046,993,484 Expenses49,905,24051,075,90852,456,308 Difference 3,687,853 4,973,848 5,522,824 Carryover Expenses 3,342,85200 Reserve Fund Above 3% Min. 986, Beg Balance 8,194,395 2,149,690 2,824,158 Ending Balance2,149,690 2,824,158 8,346,982 7

Assumptions for Revenue Same revenue formula as this year Add a 2% Cost-of-Living increase No mid-year triggers Continued declining enrollment Expenses Increase in health care costs (10%) Step & Column salary increases 8

Basic problem Recent trend of state revenue falling below district’s annual expenses Supported by ARRA, Federal Jobs Bill, State budget tricks Annual costs Declining student enrollment 100 students = $523,000 Rising health care costs (10% = $558,000) Step & Column for all employees ($538,000) 9

San Diego County Office of Education In June 2010, SDCOE had 3 conditions for the approval of the RUSD Budget 1. Adopt a resolution which identifies the amount of budget reductions needed 2. Submit the list of reductions that have been made and the timetable for making remaining reductions 3. Submit a list of Board approved budget reductions which corrects the imbalance

Current Year Reductions  One-time reductions District and site grants Mid-year retirements Reduce long-term sub pay IMFRP carryover – 100% SLIP carryover – 90% Site/Dept allocation carryover – 90% Ed Services carryover – 100%  No Cuts to carryover from lottery, GATE, donations, or Outdoor Ed TOTAL: $ 1,751,000 (one-time, only) 11

Spread over three years  One-time reductions will be spread over three years: (current year)  Feels like an annual ongoing savings of: Annual TOTAL: $ 583,000 12

Proposed reductions for Site allocation for IMFRP (50%) BTSA Ed Services allocations Social Security alternative (PERS rule) No Cuts to basic site allocation, basic SLIP TOTAL: $195,000 13

Student bussing Continue to streamline transportation services, including possible increase of student fees TOTAL: $100,000 (or more) Note: Complete elimination of bussing for General Ed students may save as little as $300,

Avoid replacing retirees Maintain selected vacancies: Administrative positions Classified positions Certificated positions Most elementary classroom positions Selected secondary classroom positions TOTAL: $ 700,000 15

Reduction in Force  Administrative positions  Classified positions  Certificated positions  Issues Per diem pay for tenured teachers Class size penalties for K-3 CSR Class sizes approaching maximum levels Needs of our children TOTAL: $ 500,000 16

Potential ongoing reductions $ 583,000 One-time site/dept reductions 195,000 Ongoing site/dept reductions 100,000Student transportation 700,000 Retirees 500,000 Layoffs TOTAL: $2,078,000 17

Employee concessions Reduction of salaries (via furlough days or across- the-board cuts) Contribution toward benefits TOTAL: $2,500,000 (from values) 18

The Board’s objectives Restructure the District budget for the long view Maintain maximum support for educational programs and students Support employees to the fullest extent possible – in light of the challenging fiscal dilemma 19

Questions Questions? Comments? Concerns? 20

In Summary Staff is recommending the Board’s approval of item E-1 First Interim Report Staff is recommending the Board’s approval of item E- 2 reduction plan to be submitted to San Diego County Office of Education