Ramona Unified School District

1. Ramona Unified School District May Budget Review 2010-2011 May 20, 2010

2. Tonight’s Discussion • Update on the Progress of the 2010-2011 Budget • Review Assumptions of the Budget Reduction Plan • Revised Assumptions • May Revise • Other Funds • This report ONLY looks at the revenues and expenses of 2010-2011, not at any carryover or ending balances

3. What We Know • An analysis of the Governor’s January Budget Proposal • Reduction to revenue limit • Negative COLA (-0.38%) • $201 per ADA reduction • Loss of revenues due to decline in enrollment • Estimated increase in operating costs • Formulated Budget Reduction Plan • Number of retirees (early retirement program) • FTE layoffs for both Certificated and Classified employees • Reduction of site and department allocations • Reduction in maintenance funding • May Budget Revision has been submitted • A formal analysis has not been completed

4. Total Budget Reductions Budget Shortfall $8,278,129 Budget Reductions $8,366,003 Loss of ARRA Funding $225,000 New Budget Reductions $8,141,003 Budget Gap $137,126

5. The Uncertainties • Actual Enrollment in August 2010 • How many students, what grade levels, and which schools will they attend • Economy • May Revision of State Budget • How will the details of the revised budget proposal affect RUSD? • How will the Legislators react? • How long will it take to come to a vote? • What will be the actual expenditures for the current year? • Will have an effect on carryover dollar amounts

6. 2010-2011 May Budget Update • Total Revenues $46,837,093 • Total Expenses $49,428,144 • Difference $ (2,591,051) • The $2,600,000 deficit will be backfilled in by savings from the current year’s Budget Reduction Plan, which will increase the 2009-2010 ending balance • This ending balance, along with dollars from the reserved fund, will backfill in the deficit

7. Changes from April • Biggest change affecting this revision is new information on salary • Information on salary advancements from Human Resources Department – which, in turn, is incorporated into the Budget • Normal, expected process

8. May Revision • May 14, 2010, the Governor presents his May Budget Revision to his January budget proposal • This morning, staff attended a workshop, presented by School Services of California, Inc., which provided more detailed information on the Governor’s May Revision proposal • Information learned has not been fully analyzed and is not incorporated into the current budget • Next slides convey some of the major themes of this morning’s presentation, and credit for these slides is given to School Services of California, Inc.

9. Overview of the State Budget • Education fares better than the rest of the Budget • The rest of the Budget is absorbing even heavier cuts in order to protect education from deeper cuts • But remember – the nearly $2.5 billion taken from education in January still remains • Childcare takes a huge cut • Social and health programs that serve K-12 students and their families are hit even harder • California Work Opportunities and Responsibility to Kids (CALWORKs), which is California’s main avenue to welfare payments, is on the chopping block

10. May Revision Features • For the most part, the May Revision contains no further cuts to K-12 education? • Cuts proposed in January remain • Targeted proposed administration cut is eliminated • Cuts to childcare eliminate subsidized slots for 142,000 children • No new federal dollars • No new taxes are proposed • Major additional cuts to the non-education portions of the Budget are proposed • Expect the Legislature to have great difficulty voting for the choices before them • Despite the Governor’s call for an on-time Budget, SSC does not expect that to happen

11. Major May Revision Proposals • The revised Budget gap is projected to be $19.1 billion, slightly smaller than the $19.9 billion gap in the January Budget • The Governor proposes to close the gap without raising taxes • $12.4 billion in cuts • $3.4 billion in additional federal funds (down from $6.9) • $3.4 billion in borrowing fund shifts, asset sales, and surcharges

12. Major May Revision Proposals • Program cuts make up the majority of the Governor's May Revision proposals including: • $1.1 billion in savings from elimination of CALWORKs • $637 million in savings from cuts to the In-Home Support Services for the disabled • $750 million in savings from Medi-Cal, the State’s primary healthcare program for low-income residents • $244 million in savings from transferring state prisoners to county jails • $602 million in savings from reduced county mental health services • These cuts will be debated and could threaten the education budget if reduced

13. Revenue Limit Funding • The -0.38% COLA is revised to -0.39% • About $0.61 per ADA • Not significant • The January Budget proposed cutting $1.5 billion from revenue limits and targeting the reduction to school administration • This proposal called for a $201 per ADA reduction to revenue limits

14. Targeted Administrative Cut • May Revision drops the nature of the cut, allowing for local discretion in how the cut will be implemented • The $1.5 billion cut remains • DOF is considering a 3.85% reduction to each district’s un-deficited base revenue limit • This reduction could range from $225 to $280 per ADA, a change from $201 per ADA • Could result in an additional $150,000 to $483,000 reduction to revenues to Ramona • If the 3.85% is applied to the deficited revenue limit, the cut would be close to the original $201 per ADA

15. Per Diem Sub Pay • The May Revision is silent on the Governor's proposal for teacher reform • SB-955 (Huff) does contain the proposals • Per diem sub pay is included in this Senate Bill • President pro Tempore Steinberg has taken this Bill out of play after it passed the Senate Education Committee, giving this Bill a cooling off period

16. Risks to the Revised Budget Proposal • Court challenges • Late budget, which could delay some of the budget saving proposals • Economy and revenue risks • “We will not pass a budget that eliminates CALWORKs” - Senate President pro Tempore Darrell Steinberg (D-Sacramento) • “New taxes are off the table with Republicans” – Assembly Minority Leader Martin Garrick (R-Solana Beach

17. Other Funds • Food Services • Revenues $2,064,500 • Expenses $2,115,329 • Ending Balance $513,399 • Capital Facilities (Dev. Fees) • Revenues $239,000 • Expenses $265,215 • Ending Balance $8,422,165 • Cash with Fiscal Agent $ 5,573,456 • Remaining Balance $ 2,848,709

18. Other Funds • Self Insurance Fund (Fund 670) • Revenues $566,000 • Expenses $565,000 • Ending Balance $260,523 • Required Reserve Fund (17) • Revenues $ 89,000 • Expenses/Transfers $889,000 • Ending Balance $2,422,942

19. What’s Next • May Revision • What does this proposal mean to Ramona Unified? • Input the revised numbers into the June Budget • Continue to look at and revise assumptions?