1. Review of Budget Shortfall Ramona Unified School District February 18, 2010

2. Goal of Presentation Purpose: Provide information to allow for input by public and staff and provide background for Governing Board discussion Process: To arrive at a certificated layoff figure by the March 15 th deadline to handout the required preliminary reduction notices, the process must be followed: ◦1) identify the amount of reduction in revenues; and ◦2) identify all potential reduction to services, staff, shifts in categorical uses, and use of reserve dollars

3. Basis of Analysis The cuts being proposed are based on the Governor’s January Proposed Budget The numbers reflect the best and most current information as of February 17 th, and much could change with the final enactment of the State Budget

4. Priorities of Process ● Protect essential services and programs for children ● Continue to support initiatives which advance the District’s mission and goals ● Maintain reasonable class sizes, K-12 ● Maintain as many jobs as possible ● Support staff compensation and benefits to the fullest extent possible ● Position ourselves for an even more challenging budget year in 2011-12

5. I. The Budget Shortfall

6. Effects of Governor’s Proposals on RUSD ◦-0.38%, or $24 per ADA, reduction of COLA to revenue limits ◦$201 per ADA reduction of revenue limits ◦-0.38% reduction to categorical programs which will need to be backfilled Total Loss of Revenues $1,540,979

7. I. The Budget Shortfall Loss of One-Time Funding ◦School Fiscal Stabilization Funding ◦ARRA IDEA Funding ◦Loss of revenue due to declining enrollment ◦Negative COLA to Special Education ◦Categorical shortfall which needs backfilling Total Loss of One- Time Funding $4,943,526

8. I. The Budget Shortfall Continue Increasing Operating Costs ◦Service the Salary Schedule for all employee groups ◦Health and Welfare Increases  10% increase (estimate) Total Increase of Costs $1,233,610

9. I. The Budget Shortfall New Information - SELPA ◦RUSD receives dollars for group out-of-home beds ◦Generates revenue per year of $900,000 ◦Revenue is in jeopardy for 2009-2010 and beyond ◦Creates an additional $1,800,000 deficit over two years ◦Information will be received in the next two weeks to determine if and how much RUSD will receive for the current year and give a estimate for 2010-2011

10. I. The Budget Shortfall Summarizing the Budget Shortfall ◦Proposed 2010-2011 reductions to revenues  $1,540,979 ◦L oss of funding  $4,943,526 ◦2010-2011 increased costs  $1,233,610  Group out-of-home beds (SELPA dollars)  $1,800,000 Total $9,522,849

11. II. Potential Budget Reductions

12. District Cash Contributions ◦Ending balance reserves ◦RRMA reductions ◦Last 10% of ARRA funds ◦Savings from emeritus incentive ◦Current year hiring freeze ◦1 st year of MAA funding ◦SDG&E CARE program ◦Sale of District property (mitigation) Special Reserve Fund ◦Additional reserves from Special Reserve Fund  Total District Cash Contributions $ 4,582,757

13. II. Potential Budget Reductions Shifting of Categorical Funds (District Level) ◦Title II from Education Services ◦EIA from Education Services ◦SLIP from Education Services ◦Resources from Administrative Services ◦Math & Reading Professional Development Grant ◦English Language Professional Development Grant ◦CAHSEE intervention support ◦Additional flexing of CBET funding Total Shifting of Categorical Funds $453,390

14. II. Potential Budget Reductions Site and Department Reductions ◦10% reduction of supplies (2 years) ◦Title 1 resources ◦Site reduction of supplies ($30/student) ◦District-funded days for library/counselor ◦Secondary stipends (7-12) ◦100% of 2010-2011 GATE 433,909 Total Site/Department Reductions $ 433,909

15. II. Potential Budget Reductions District-Level Reductions ◦Conservation in energy and water usage ◦Elimination of District memberships ◦Elimination of TOA position in Education Services ◦Not replacing the Custodial Supervisor ◦Not replacing the Extended Student Program Supervisor Total District-Level Reductions $239,500

16. II. Potential Budget Reductions Potential Reductions from Classified Positions, such as: ◦Groundskeeper ◦Custodian ◦Bus Driver ◦Para-educator ◦Campus Safety Officer ◦Campus Security ◦And possibly others Total Reductions in Classified Positions $375,000

17. II. Potential Budget Reductions Potential Savings in Certificated Reductions ◦Retirees not being replaced (12) ◦Retirees being replaced (4)  Total savings from ERI$1,353,245 ◦Teaching reductions in secondary (core 7-12) ◦Teaching reduction in elementary Special Ed ◦Staff at 35 to 1 class size in Grades 4-6 classrooms ◦Staff at 20 to 1 class size in K-3 classrooms or 24 to 1*  Increase in K-3 funding Total Certificated Reductions $2,281,447 *Depending on whether the Governor’s proposal to eliminate rights to substitute is passed

18. 2009-2010 Current Reductions in Programs Current program reductions (flexed dollars): ◦9 th Grade Class Size Reduction ◦Deferred Maintenance Funds ◦Adult Education ◦Summer School Dollars ◦School Safety and Violence Prevention ◦Instructional Materials ◦Arts and Music and PE Education Supplies ◦Gifted and Talented ◦Discretionary Site Block Grants ◦Routine Restricted Maintenance Account

19. Total Budget Reductions Budget Shortfall $9,522,849 Budget Reductions $8,366,003 Budget Gap $1,156,846

20. III. Filling In The Gap

21. To Fill The Gap for 2010-2011 ◦Staff is hopeful that RUSD will receive some dollar amount for the group out-of-home beds ◦If dollar amount is not sufficient to close the 2010-2011 budget gap, other areas of focus could include ◦Fund 670 (Fund 16), additional layoffs, RRMA, Fund 17, and employee concessions This closes the budget gap for the 2010- 2011 fiscal year only (based upon the assumptions)

22. III. Filling In The Gap Other Potential Changes ◦Actual renewal rates for health & welfare benefits ◦Actual enrollment vs. projected enrollment ◦Changes to State Budget  The Legislature has not yet weighed in on the proposals to education ◦ More cuts to education could be forthcoming ◦Will Federal Government support California with an additional $6.9 billion  Democrats are not happy with the “triggers” that are currently in place should President Obama’s Administration not fill the hole  Legislature could fill this hole with further cuts to education

23. III. Filling In The Gap Governor’s Proposal Fails ◦Federal Government does not provide California with $6.9 billion, and education takes an additional cut ◦Education represents about 40% of State general fund budget  $2,760,000,000 represents Education’s 40% portion  $2,760,000 represents RUSD portion of educations piece and potential reduction scenario

24. III. Filling In The Gap Governor’s Proposal Fails ◦How do we get another $2,800,000 in reductions?  Remaining reserves above the 3% mandate  Additional layoffs  Employee concessions

25. III. Filling In The Gap March 1 st Special Board Meeting ◦Staff will: ◦Present two items for the Board’s consideration and review  1) A layoff resolution that is designed to close the District budget gap  2) Information and other options in case the $6.9 billion shortfall and additional cuts to education occur

26. IV. Not A One-Year Problem

27. IV. Not a One-Year Problem The problem does not just lie in this year and the next (2009-2011) One-time budget solutions eliminated Reserves drained to just above required 3% Categorical, site and department budgets have been scrubbed and little dollars are left to help the budget out But unless things dramatically change, 2011-2012 will be even more difficult

28. IV. Not a One-Year Problem Potential Problems in the 2011-2012 Budget ◦Increased Operating Costs/Loss of Revenues  Service the Salary Schedule  Health and Welfare Increases  Decrease of revenue due to loss in ADA ◦Loss of One-Time Revenue Fixes  Ending Balance  Last 10% of Federal ARRA dollars  Routine Restricted Maintenance Dollars  Sale of Mitigated Property  Other one-time funding (Categorical Sweeps) Total for 2011-2012 $6,001,003

29. IV. Not a One-Year Problem Potential Solutions for the 2011-2012 Budget ◦Remaining dollars in Fund 17 ◦Reduction in expenditures due to declining enrollment (salaries, site allocations) ◦Potential estimated 1.8% COLA (if funded) Total Dollars to Offset the Problem $2,215,000

30. 2011-2012 Issue$6,001,033 Solutions $2,215,000 Left to be solved$3,786,033

31. V. Summary of Presentation

32. May be able to fill the gap for 2010-2011 with layoffs, massive program reductions, and cash reserves ◦If additional cuts to education occur, the 2010- 2011 fiscal health of the District will be in jeopardy For 2011-2012, dramatic layoffs and employee concession will be necessary Summary of Presentation

33. Schools and the community are not equipped to absorb the shock of 2011- 2012 budget problem in one year Intent is to work with the employee groups to begin a two-year approach to the budget dilemma Summary of Presentation