Sonoma Valley Unified School District

1. Sonoma Valley Unified School District September 2010 Budget Update

2. Tax Projections Tax projections continue to be one of the most critical variables in future year budget projections. The 2010-11 Adopted budget assumed a tax growth of 2% for 2010-11, 2011-12, and 2012-13.

3. The “Fair Share” Variables 5.81% “Fair Share” State Cut - $1,700,000 - Included in projections for all three years - Expected to continue beyond 2010-11 3.85% “Fair Share” State Cut - $1,105,000 - Included in projections for all three years - Expected to be included in State Budget

4. Note: “< >” When a number is in these brackets it means the number is a negative.

5. Multi-year Deficit Scenarios 2010-11 2011-12 2012-13 <$8,645,000> <$2,695,000> <$2,840,000> <$3,110,000>

6. Deficit Projection without 5.81% Fair Share in future years 2010-11 2011-12 2012-13 $1,140,000 $1,410,000 $5,425,000 $2,695,000

7. Deficit Projection without 3.85% in all years 2010-11 2011-12 2012-13 $1,590,000 $1,735,000 $2,005,000 $5,330,000

8. Deficit Projections with both fair share variables removed

9. Available One Time Funds • Ending Balance (Fund 01) $3,131,000 • One-Time SFSF Funds $1,125,000 • 3% Reserve (Fund 17) $1,169,000 • Tax Reserve (Fund 17) $985,000 • Deferred Maint (Fund 17) $1,643,000 • Adult Education (Fund 17) $500,000 • RDA Funds (Fund 40) $1,050,000 • OPEB Reserve (Fund 67) $565,000

10. How much to cut? Uncertainty surrounding: • State Budget • Local Taxes • Measure H

11. How much to cut? Recommend cutting $1,595,000 in 2011-12. Use available one-time reserves to cover an ongoing $1,245,000 Deficit while waiting for more information. More cuts may be needed in 2012-13.

12. Revised Tax Assumptions • <2%> Tax Loss for 2010-11 • 0% Tax Growth for 2011-12 • 2% Tax Growth for 2012-13 These revisions will be included in the First Interim Report at the November Board Meeting

13. Revised Deficit Assumptions 2010-11 Deficit $2,695,000 2011-12 Deficit $1,245,000 2012-13 Deficit - 0 -

14. Revised Deficit Projections 2010-11 2011-12 2012-13 $1,515,000 Cuts <$0> $1,595,000 Cuts <$1,245,000> <$2,695,000>

15. Revised Multi Year Projection 2010-11 Deficit <$2,695,000> Less One-time SFSF Funds $1,125,000 Remaining Deficit <$1,570,000> 2010-11 Beg Fund Balance $3,131,000 Less 2010-11 Remaining Deficit <$1,570,000> 2010-11 Ending Fund Balance $1,561,000 SFSF one-time funds and Ending Balance funds will be used to augment the General Fund by $2,695,000 in 2010-11.

16. Revised MYP cont. 2011-12 Deficit (pre-cuts) <$2,840,000> 2011-12 Cuts $1,595,000 2011-12 Deficit (post-cuts) <$1,245,000> Beginning Fund balance $1,561,000 2011-12 Deficit <$1,245,000> 2011-12 Ending Fund Balance $316,000 Ending Balance funds will be used to augment the General Fund by $1,245,000 in 2011-12.

17. Revised MYP cont. 2012-13 Deficit (pre-cuts) <$1,515,000> 2012-13 Cuts $1,515,000 2012-13 Deficit (post-cuts) $0 There will be no deficit in 2012-13 after necessary cuts are made.

18. Recommended Course of Action • Identify $1,595,000 of cuts to implement in 2011-12. • Wait to see the state budget. • Passage of Measure H

19. Budget Reduction Process November • Meetings for initial Staff Input (2 Meetings) • Meetings for Parent/Student/Community Input (3 Meetings) December • Meetings for additional Staff Input (2 Meetings) • Presentation to Board of Trustees on possibilities and feedback (Regular December Board Meeting) January • Presentation of Staff Recommendations to Board of Trustees (Regular January Meeting) February • Board of Trustees take action on budget reductions

20. Questions?