Lynwood Unified School District First Interim Financial Report Board Presentation December 13, 2011

Table of Contents Background Key Assumptions Revenue Limit Deficit Factor History Base Revenue Limit After Deficit Factor Revenue Limit per ADA – Actual vs. Statutory Level Actual Revenue Limit Funding Loss Multi-Year Projections Future Outlook Questions

Background Statutory Requirement AB enacted in the early 1990s in response to a number of near bankruptcies, requests for state loans, or defaults on school district obligations At least twice a year December 15 and March 15 Certifications Positive – Will meet financial obligations in the current and subsequent two fiscal years Qualified – May not meet financial obligations in the current or subsequent two fiscal years Negative – Will NOT meet financial obligations in the current or subsequent two fiscal years Qualified or negative status requires additional reporting (due June 1) until district is “positive” again

Key Assumptions Average Daily Attendance (ADA) Continued enrollment decline, per law, use higher ADA number from previous year Revenue Limit COLA – 2.24% Revenue Limit Deficit Factor – % (increased from %) Net Revenue Limit Funding Change – 0% Mid-Year Cut - $181 per ADA per Legislative Analyst Office est. (Approx. $2.7 million set-aside) Flat funding in , i.e. 0% COLA and deficit factor remains the same (3.1% COLA assumed in Adopted Budget, LACOE and SSC both suggest extreme caution to include the COLA in MYP due to the recent economic developments.)

Revenue Limit Deficit Factor History B-18

Base Revenue Limit after Deficit Factor $6,530 $1,290 Funded Base Revenue Limit Apply the deficit of % to the undeficited base revenue limit Funded revenue limit = $6,530 x ( ) = $6,530 x = $5,240

Revenue Limit Funding Per ADA – Actual vs. Statutory Level

State Budget Cuts - Actual Revenue Limit Funding Loss

Multi-Year Projections – Unrestricted General Fund

Future Outlook State budget structural deficit Projected state budget deficit through , will grow without corrective measure Governor’s proposed tax increase is an uncertainty The volatility of global economy may negatively impact both the national and state economy recovery. The recovery timeline may be longer, especially for California Sunset of TIER III programs and other flexibility provisions Cash Flow – Apportionment Deferral Declining Enrollment Growing facility needs Other needs, textbooks, instructional materials, staffing……

Questions