1 Alameda Unified School District FY 08/09 2 nd Interim March 10, 2009

2 AUSD – 08/09 2 nd Interim Changes From 1 st Interim To 2 nd Interim Projected Year Totals UnrestrictedRestrictedCombined Revenues – 08/09 08/09 1 st Interim -0.71% COLA -2.63% Additional reduction -15.4% State Categorical Cut New/Revised 08/09 2 nd Interim Revenues $67,358,558 ($387,047) ($1,462,100) ($52,743) ($43,279) $65,413,389 $22,686,269 $0 ($652,344) $817,221 $22,851,146 $90,044,827 ($387,047) ($1,462,100) ($705,087) $773,942 $88,264,535 Expenditures – 08/09 08/09 Original Budget -15.4% State Categorical Cut Categorical Flex for Facility RRM Prior Year Special Ed Contribution New/Revised 08/09 2 nd Interim Expenditures $54,149,483 $0 $66,504 $54,215,987 $38,424,256 ($652,344) ($345,000) $712,794 $37,794,706 $92,573,739 ($652,344) ($345,000) $779,298 $92,010,693

3 AUSD – 08/09 2 nd Interim Changes From 1 st Interim To 2 nd Interim Projected Year Totals UnrestrictedRestrictedCombined Other Sources/(Uses) – 08/09 08/09 1 st Interim Categorical Flex. From Adult Ed Categorical Flex. From Facility RRM Contribution to Sp Ed (prior year) New/Revised 08/09 2 nd Interim Other Sources/(Uses) ($10,211,619) $800,000 $345,000 $50,859 ($8,670,760) $9,436,367 $0 ($345,000) ($104,427) 8,641,940 ($775,252) $800,000 $0 ($53,568) ($28,820) Net Increase/(Decrease) in Fund Balance Beginning Balance – 7/1/08 Ending Balance – 6/30/09 $2,526,642 $2,788,144 $5,314,786 ($6,301,620) $6,301,620 $0 ($3,774,978) $9,089,764 $5,314,786

4 AUSD – 08/09 2 nd Interim Components of Fund Balance UnrestrictedRestrictedCombined Ending Fund Balance – 6/30/09 (see detail below) Detail for Ending Fund Balance 6/30/09 Revolving Cash Mandated Costs 1-time 08/09 COLA of.71% Technology Equipment Replacement Measure H Multi-year Projections Ending Fund Balance 6/30/09 $5,314,786 $50,000 $1,080,000 $0 $31,569 $2,758,000 $1,395,217 $5,314,786 $0 $5,314,786 $50,000 $1,080,000 $0 $31,569 $2,758,000 $1,395,217 $5,314,786

5 AUSD – 08/09 2 nd Interim Multi-Year Projections Major Assumptions Categories Enrollment and ADA District Enrollment (CBEDS) District ADA-Actual/Projected District ADA-Funded Revenues Revenue Limit COLA Statutory Revenue Limit Deficit Revenue Limit Net Change State Categoricals Tiers 2 & 3 Base Revenue Limit w/Statutory COLA Base Revenue Limit w/Deficit COLA Equalization Aide Per ADA Mandate Reimbursement Parcel Tax 07/08 9,954 9, % 0.00% 4.53% 0.00% $5,777 $0 $3.3M 08/09 9,892 9,491 9, % 7.844% -2.63% % $6,106 $5,627 $0 $7.3M 09/10 9,549 9,189 9, % % % -4.50% $6,415 $5,575 $0 $7.3M 10/11 9,473 9,120 9, % % 0.70% 0.50% $6,458 $5,612 $0 $7.3M

6 AUSD – 08/09 2 nd Interim Multi-Year Projections Major Assumptions Categories Expenditures Step and Column Salary Increases 05/06 Negotiated Salary Increase 07/08 Negotiated Salary Increase (2.0%) 08/09 Negotiated Salary Increase (4.0%) 09/10 Negotiated Salary Increase (TBD) Special Education Contribution Indirect Cost Rate 07/08 $0.83M $2.5M $0.8M $0.0M $6.0M 2.84% 08/09 $0.78M $2.5M $1.1M $1.9M $0.0M $7.2M 3.22% 09/10 $0.72M 2.5M $1.1M $2.2M TBD $7.7M 3.22% 10/11 $0.72M 2.5M $1.1M $2.2M TBD $8.2M 3.22%

7 School Funding Challenges AUSD faces several school funding challenges over the next few years Declining Student Enrollment – AUSD receives less funding when fewer students enroll in its schools. Reduced State Funding – In addition, the state is reducing the overall funding that is provided to schools. Local Parcel Tax - The local community provides $7.3M annually to AUSD, but this terminates in 2011/12. Increased Operational Costs – for employee salaries, special education and utilities.

8 Strategy to Address Reduced School Funding by using Categorical Flexibility & Reserves Item 08/0909/1010/1111/12 Categorical Flexibility $1.2M$1.8M-$3.2M Budget Cuts ---- Prior Year Sp Ed $0.3M--- On-Going Reserve 0.71% COLA $0.4M--- Mandated Costs -$1.1M-- Multi-year Projections -$1.4M-- Measure H -$1.0M$6.4M$3.6M TOTALS $1.9M$5.3M$6.4M$6.8M

9 Categorical Flexibility 08/09 $800K from Adult Education $345K from Facilities Routine Restricted Maint. $1.2M total for 08/09 Categorical Flexibility

10 Categorical Flexibility 09/10 $634K Prof. Dev. Buyback Days $448K Targeted Improvement $218K 1-time District Block Grant $175K Art & Music Grant $81K Instruct. Materials $80K English Learner Funds $62K Gifted & Talented $50K Teacher Peer Review (PAR) $19K Pupil Retention $11K Beginning Teacher Grant (BTSA) $1.8M total for 09/10 Categorical Flexibility

11 AUSD – 08/09 2 nd Interim Multi-Year Projections 07/0808/0909/1010/11 REVENUES Revenue Limit$56,248,989$54,884,267$52,369,675$52,354,330 Federal$4,592,062$6,323,390 Other State$14,075,010$12,931,111$11,914,787$11,914,808 Other Local$10,891,023$14,125,767$12,843,116 Revenues$85,807,084$88,264,535$83,450,968$83,435,644 EXPENDITURES Salaries & Benefits$64,868,839$68,753,433$69,410,212$70,223,712 Books/Supplies & Outlay$3,711,838$7,495,701$1,577,262$3,368,690 Services & Operating Expenses$10,742,518$13,529,996$10,450,835$10,755,541 Other Outgo & Transfers$1,661,567$2,231,563$1,901,056 Expenditures$80,984,762$92,010,693$83,339,365$86,248,999 Other Sources (Uses)($3,124,417)($28,820)($828,820) Net Inc/Dec in Fund Balance$1,697,905($3,774,978)($717,217)($3,642,175) Beginning Balance$7,391,859$9,089,764$5,314,786$4,597,569 Ending Balance$9,089,764$5,314,786$4,597,569$955,394

12 AUSD – 08/09 2 nd Interim Components of Fund Balance Ending Fund Balance (see detail below) Detail for Ending Fund Balance Revolving Cash Mandated Cost 1-time Restricted Undesignated Technology Equipment Replacement Measure H Multi-year Projections Ending Fund Balance – 6/30/09 07/08 $9,089,764 $50,000 $1,080,000 $6,300,816 $1,658,948 $0 $9,089,764 08/09 $5,314,786 $50,000 $1,080,000 $0 $31,569 $2,758,000 $1,395,217 $5,314,786 09/10 $4,597,569 $50,000 $0 $31,569 $4,516,000 $0 $4,597,569 10/11 $955,394 $50,000 $0 $31,569 $873,825 $0 $955,394

13 Future Planning: 2012/ /13: AUSD could be facing a $4M on-going operating loss in 2012/13. Parcel Tax: In addition, the School Parcel Tax for both Measures A and H will terminate at the end of 2011/12. That would be an additional loss of school funding of $7.3M. Start Now: How will AUSD start now to address this estimated $11.3M loss in funds for the 2012/13 school year? The Superintendent is presenting a Master Plan process at the school board meeting on March 24, Permanent Parcel Tax: Will the community support the schools in 2012/13 with a replacement permanent parcel tax to cover these lost funds?

14 AUSD – 08/09 2 nd Interim Outstanding Issues Possibly Impacting the Budget Statewide Special Election May 19, 2009 Requires voter approval of the following Prop 1A: Rainy Day Funds (that could be used for Education) Prop 1B: Education Funding Repayment Plan (to start 2011/12) Prop 1C: State Lottery Modernization (borrowing from the state lottery to balance the state budget) Governors May 2009 Revise Could change projections for 2009/10 and beyond Nea CLC Charter School Scheduled to open in Alameda in Sept Need to adjust lost funding when actual Nea enrollment is known Parcel Tax Measures A & H provide $7.3M annually to AUSD Both terminate in 2011/12 Will the community pass a replacement permanent parcel tax for 2012/13?