1. OAKLAND UNIFIED SCHOOL DISTRICT Financial Recovery Plan
January 15, 2003

2. EMERGENCY APPORTIONMENT REQUEST
District may request a State Loan of up to $80 Million
This figure is based on the following assumptions:
The current year budget deficit mirrors last year with adjustments for documented expenditure reductions
The current year State budget cuts will not exceed the Governor’s current proposal
The current downward trends in OUSD spending will be maintained if not enhanced

3. GENERAL FUND DEFICIT $62 Million* 2001 –2002 Deficit of $32 Million**:
+ $8.8 Million – Starting Cash Balance
- $6.3 Million – Revenue shortfall
- $17.5 Million – Unbudgeted salary and Benefits
- $8.8 – Other unbudgeted expenses
- $8.6 – Contributions to other funds
*Does not include Governor’s proposed cuts
**Restricted Funds Year End = $10.1 Million Surplus

4. GENERAL FUND DEFICIT, cont.
$62 Million, cont.
2002 –2003 Deficit of $30 Million:
- $41 Million – FCMAT Estimate
+ $11 Million – Documented reduction in salaries and benefits and other expenses

5. CAUSES OF DEFICIT
Decline in enrollment: since 1999, enrollment has declined by 3,265 students
Increased compensation and benefits:
25% salary increase for teachers
Reduced the number of emergency permit teachers
Reduction in vacancies
Contribution to other funds
Use of inaccurate data in financial planning

6. FINANCIAL DEFICIT NOT EDUCATIONAL CRISIS

7. INCREASING QUALITY OF TEACHING STAFF
Increased the fully credentialed teaching force in the district from 69% to 83%
Reduced the number of emergency credentialed teachers from 490 to 65

8. EDUCATIONAL GAINS ACHIEVED
Significant increases in student achievement in all subjects K-8.
Highest gains for lowest achieving students.
SAT9 Gains Above the 50th Percentile ( to )
Grade
2nd
3rd
4th
5th
6th
7th
8th
Reading
+10 +4 +2 +1
Language +6 +7 +3
Math +5

9. Creating Small Learning Communities
8th Grade Academies: Achievement gains for students retained in 8th grade academies surpasses those retained in traditional settings
SAT9 improvement above the 25th Percentile between and
Reading
Language Arts
Math
Bunche
+14
+19
+11
Rudsdale
+16
+15 +5
Traditional Sites +7 +8

10. Creating Small Learning Communities
8th Grade Academies: Achievement gains for students retained in 8th grade academies surpasses those retained in traditional settings
SAT9 improvement above the 50th Percentile between and
Reading
Language Arts
Math
Bunche +7
Rudsdale
+11 +3 +6
Traditional Sites +2

11. New Small Autonomous Schools
Above 50th Percentile improvement between to
Reading
Language Arts
Math
ASCEND +7
+10 +5
ICS +6
+19
+17
UPA +8

12. Number of High School Dropouts

13. GUIDING PRINCIPLES TO RECOVERY PLAN
Achieve balanced budget in
Protect core program
Maintain competitive salary to attract and retain quality staff
Implement strategic plan, including site autonomy
Protect academic gains

14. RECOVERY PLAN Implementation of Budgetary Controls
Budgetary Reductions Made to Date
Additional Reductions
Produce balanced budget through collaboration with employee groups and community
Redesign Operations

15. Implementation of Budgetary Controls
Integrated Financial Management System implementation (ongoing)
Position control “document”
Reorganization of Financial Services
On a monthly basis:
All budget revisions go before the Board of Education
Financial analysis by fund and resource
Perform reconciliation of books
Cash flow reports

16. BUDGETARY REDUCTIONS MADE TO DATE
June 30, 2002 – Adopted budget with $14.1 Million in spending reductions
October 1, 2002 – Cut supply budgets by 10% and adopted a freeze on non-essential expenditures and filling non-essential positions
October 15, 2002 – First Semester Teacher consolidations (Net Reduction of 42 FTEs from Unrestricted General Fund)
January 1, 2003 – Senior staff takes voluntary pay reduction of 10%

17. 2002-2003 Additional Reductions
January 6, 2003 – Administration Presents Draft of Budget Reductions Totaling $8,990,000:
Freeze step and column retroactive to June 30, 2002
Elimination of pre-employment medical
Closure of two kitchens
Elimination of Central Administration Positions (8.5 FTE)
January 28, 2003 – Second Semester Teacher Consolidations (projected 25 FTEs)

18. 2003-2004 Proposed Balanced Budget
January 6, 2003 – Administration Presents Draft of Budget Reductions Totaling $33.3 Million:
Benefits freeze capped at level
Elimination of elementary prep teachers
Teacher attrition due to decline in enrollment
Reduce School Security Officers by 60 (out of 111)
Special Education reduction
Assistant Principal ratio increase
Reduce Custodial staffing
Reduce Purchasing and Warehouse allocation
Reduce Central Administration (13.5 FTE)

19. Legislative Strategy Special Session Legislation Regular Session
Requires simple majority
Session lasts till end of month
Regular Session
Requires urgency legislation to provide loan in timely fashion
Urgency legislation requires 2/3 majority

20. PROPOSED LEGISLATIVE LANGUAGE
Appropriate up to $80 Million to SPI for OUSD
Appoint an Administrator who would:
Manage and oversee District Fiscal Operations
Have final approval of budget
Stay and rescind financially unwise expenditures
The current district superintendent would retain:
Ability to hire and fire all staff
Manage instruction
Manage other support services

21. PROPOSED LEGISLATIVE LANGUAGE, cont.
The debt to be repaid as a straight-line loan amortized over a 30-year term.
Allow the district to forego reserve requirements during the and fiscal years
Require the district to appropriate ½% of GF total annually until Reserve Fund is reestablished
Allow the district to sell or lease property to repay state loan

22. PROPOSED LEGISLATION LANGUAGE
Allow the district to transfer up to 30% of funds within Categorical Mega Block Grants
Authorize the district to calculate Class Size Reduction with an average of up to 22-1 OR
Allow the district to select which Class Size Reduction grade level to reduce or eliminate (as per AB 42 Daucher)