1. Alameda Unified School District School Board Meeting Budget Information Update February 10, 2009 6:30pm

2. The Alameda Unified School District (AUSD) faces budget challenges in the current year 2008/09 and the years to come. For 2008/09, there is a proposed mid-year reduction in state funding of $3 million. For 2009/10, there is an additional projected net loss of $4 million. For both years, that is a loss of $7M. Budget Challenges 1

3. For 2008/09, the proposed mid-year reduction of $3M is made up of the following: Elimination of the Cost of Living Adjustment (COLA) of 0.71% applied to the state revenues given to AUSD for students attending its schools. An additional reduction of 4.5% to those state revenues provided for student attendance in AUSD schools. 2008/09: $3M Loss 2

4. For 2009/10, the net loss of $4M is made up of the following: $1.3M reduction in state funds due to the State Budget Crisis. $0.3M net reduction in state funds due to less students enrolling and attending AUSD schools, and reducing the teaching staff by 8 teachers. $0.7M net reduction in state funds due to students attending the new Nea Charter School in Alameda, and reducing the teaching staff by 10 teachers. $1.7M in additional expenses for employee advancement on salary schedules, on-going costs from settled union negotiations, special education, utilities and technology 2009/10: $4M Loss 3

5. How will AUSD address the projected loss of $7M in funds? AUSD will consider the following options: The Governors Proposed Categorical Flexibility Mandated Costs Reserve The Measure H Parcel Tax funds Budget Cuts (If the Proposed Categorical Flexibility is not approved by the state legislature) Class Size (the number of students enrolled in each class) Options 4

6. The Governor has proposed to allow school districts the ability to use restricted state funds from special programs (called Categorical Programs) for unrestricted operational needs. This is called Categorical Flexibility. AUSD is meeting with staff to review Categorical Programs and determine available balances to be considered for Categorical Flexibility. Categorical Flexibility 5

7. Categorical Program List Adult Education 9th Grade CSR K-3 CSR Economic Impact Aid English Learner (ELAP/CBET) Art & Music Grant Supplemental Counseling Pupil Retention (Cont. Ed/Counseling) Professional Develop. Teacher Programs (PAR/BTSA) School Safety School/Library Improvement (SLIG) Targeted Improvement Instructional Materials HS Exit exam (CAHSEE) Gifted and Talented Ed. ROP Child Nutrition 6

8. AUSD has a one-time reserve of $1.1M from the State Mandated Cost Programs that can be considered for the loss in the funding. AUSD has $2.8M in Measure H Parcel Tax funds to be designated for expenditure. The district would use these funds to save those programs as provided by Measure H. Other Sources 7

9. AUSD could negotiate with its teachers union on class size. Current teacher staffing ratios provide an average of the following student enrollments for most classes at each grade level: 20.44 students in each class in grades Kindergarten (K) through 3rd 29 students in each class in grades 4th through 12th 20 students in each 9th grade class for English 20 students in each 9th grade class for Math Class Size 8

10. The following is an example of the financial savings on increasing class size. A district has 3,000 students in grades K through 3rd. A district places 20 students in each class for grades K through 3. A district would need 150 teachers (3,000/20) for the 3,000 students at the 20:1 class size. Class Size Example 9

11. Class Size Example (cont.) If a district places 30 students in each class for grades K through 3rd… Then it would need only 100 teachers (3,000/30) for the same 3,000 students, but at a 30:1 class size. There would be 50 less teachers (150 – 100). The financial savings from this example on increasing class size from 20:1 to 30:1 in grades K through 3rd would be about $3M (50 less teachers multiplied by about $60,000 per teacher). 10

12. The $7M loss in funding is an On-Going loss of funds. On-Going means that the loss continues year after year. There is no proposal to reinstate the funds next year, or any future year. On-Going 11

13. On-Going (cont.) The On-Going nature requires that the district find On-Going sources to cover the On-Going loss of funds. It is like using your savings account to pay your monthly bills. Eventually your savings will run out. And you will be forced to either bring in more income or cut back on your monthly expenses. 12

14. On-Going (cont.) If the district covers its On-Going Loss with 1-time sources (like program carryovers or reserves), then it just buys the district some time. At some point, the district will need to come up with On- Going solutions. Some On-Going solutions are: Through Categorical Flexibility, transferring On-Going funds from restricted programs to general operational uses, or Increasing class size, or Budget Cuts, or A future Permanent Parcel Tax AUSD will be considering these solutions over the next several months. 13

15. There is no easy answer to a projected $7M loss in funds over a 2-year period. AUSD will have two Special School Board Meetings as Public Budget Workshops. Please join us at one or both of the following: –Public Budget Workshop #1 Wednesday, Feb. 11th 6:30pm to 8pm At Haight Elementary School –Public Budget Workshop #2 Thursday, April 2nd 6:30pm to 8pm At Wood Middle School Public Budget Workshops 14