Second Interim Budget Report March 9, 2010 Steven Lawrence, Ph.D., Superintendent

1. Mt. Diablo Unified School District Second Interim Budget Report March 9, 2010 Steven Lawrence, Ph.D., Superintendent Bryan Richards, Director, Fiscal Services

2. Why an Interim Report? • Ed. Code §42130 requires the Board to certify two interim budget and financial reports • Certification is either Positive, Qualified or Negative • Positive – The district will meet its obligations for 3 years • Qualified – The district may not meet its obligations for 3 years • Negative – The district will not meet its obligations in current or upcoming year • 1st Interim with transactions to October 31 due December 15 • 2nd Interim with transactions to January 31 due March 15 • If 2nd Interim qualified or negative, 3rd Interim with transactions through April 30 due June 1

3. Unrestricted General Fund Revenue • Revenue Limit Sources $ 158,651,759 • Federal Revenue 225,054 • Other State Revenue 32,074,592 • Other Local Revenue 3,168,461 • Total Revenue 194,119,866 • Less: Net Contrib. to RGF (34,730,797) • Net Available Revenue $ 159,389,069

4. Revenue Limit is down from 89.8% of revenue to 81.73% because of the deficit.

5. Unrestricted General Fund Expenditures • Certificated Salaries $ 83,414,261 • Classified Salaries 19,886,215 • Employee Benefits 29,936,365 • Books & Supplies 6,241,695 • Services & Operating 15,089,883 • Capital Outlay 108,113 • Other Outgo 929,381 • Interfund Transfers Out 5,452,658 • Total Expenditures 161,058,571

6. Salaries and Benefits make up 82.73% of expenditures & transfers out

7. Unrestricted General Fund Summary • Net Available Revenue $ 159,389,069 • Net Expenditures 161,038,571 • Net (decrease) fund bal. ( 1,669,502) • Beginning Balance, July 1 24,529,701 • Projected Ending Balance $ 22,860,199

8. Components of Ending Balance • Revolving Cash $ 300,000 • Stores Inventory 536,118 • Economic Uncertainties (2%) 6,036,482 • IRS Assessment Resolution 533,550 • Tier 3 and Site Carryovers 7,165,062 • Undesignated 8,288,987 • Ending Balance $ 22,860,199

9. Restricted General Fund Revenue • Revenue Limit Sources $ 6,614,982 • Federal Revenue 31,892,737 • Other State Revenue 37,774,770 • Other Local Revenue 8,841,354 • Interfund Transfers In 0 • Net Contribution from UGF 35,525,361 • Total Revenue $120,649,204

11. Restricted General Fund Expenditures • Certificated Salaries $ 44,454,133 • Classified Salaries 21,644,156 • Employee Benefits 24,982,365 • Books & Supplies 25,374,487 • Services & Other Operating 22,256,480 • Capital Outlay 343,427 • Other Outgo 2,505,016 • Transfers Out 0 • Total Expenditures $ 141,560,064

13. Restricted General Fund Summary • Total Revenue $ 120,649,204 • Total Expenditures 141,560,064 • Net (decrease) in fund bal. (20,910,860) • Beginning Balance, July 1 22,687,425 • Projected Ending Balance $ 1,776,565

14. Other Funds of the District • Funds for special purposes excluded from the General Fund • Special Revenue Funds • Charter School – Form 09I • Adult Education – Form 11I • Cafeteria – Form 13I • Deferred Maintenance – Form 14I • Capital Projects Funds • Building (Proceeds of local bonds for construction) – Form 21I • Capital Facilities (a.k.a. Developer Fees) – Form 25I

15. Other Funds of the District (cont’d) • Capital Projects Funds (continued) • County School Facilities (State Allocations for construction) – Form 35I • Capital Project for Blended Component Units (Mello-Roos) – Form 49I • Debt Service Funds • Bond Interest and Redemption – Form 51I • Debt Service for Blended Component Units (Mello-Roos) – Form 52I • Foundation Private-Purpose Trust Fund (Scholarship Fund) – Form 73I • All “Other Funds” projecting positive fund balances

16. Supplemental Information • Form AI: Average Daily Attendance decrease of (719.95) in 09/10 will decrease funding for 10/11. • Form CASH: Cash Flow – to end year positive we sold a $12M TRAN which closes on March 18 and are pulling LAIF into County Treasury • Form RLI: This is unchanged since 1st interim except for the adjustment to PERS reduction due to personnel cost changes • Form 01CSI: Criteria & Standards • Form CI: Certification to Sign summarizes Criteria & Standards • Form MYPI: Multi-year Projection – What we can expect based on what we know now from Sacramento, so it’s time for another episode of…

17. STATE CAPITOL

18. One time revenue limit deficit now ongoing! • This year we have a one-time additional deficit of $252.83 per 2008-09 FUNDED ADA (2007-08 actual P-2 ADA) or about $254.06 per current funded ADA • Starting next year it will become ongoing and be $201 per current year funded ADA • This deficit is proposed to be applied to “administrative” costs. While “administrative” is undefined in the proposal, current chatter from Sacramento indicates it will be calculated on function codes 2100-2199 (instructional supervision), 7000-7999 (central administration and technology) and 8000-8999 (maintenance, operations & security). Reductions since 2008/09 will count towards the cuts as it will be used as the base year. However, reductions from 2007/08 into 2008/09 may not. This is not yet finalized and there is a move to strip the language from the proposal.

19. General Outlook for the Future • Positive Certification (we will meet our obligations for this year and the next two) • This certification is conditional on the board’s approval of items on tonight’s cut list as they have been included in the multi-year projection • Concerns • State fiscal health is still precarious although January revenues were up in the first piece of good news out of the State in a while. However, it hasn’t made up for the shortfalls to date so the May revise may still have further cuts. • Health care cost containment is critical. Increases have been coming in well above the CPI. Our 2011 rate announcement comes from CalPERS in June. • Declining enrollment – still a major concern • DEFICIT – The cuts have significantly lessened our deficit spending. However, cash is king and we must continue to monitor it. We will be pulling our LAIF investment into the County treasury to be sure cash is available.

20. Cash is king for the State too! • Additional new deferrals will affect our cash flow substantially! • July revenue limit deferred until September • October revenue limit deferred until January • March revenue limit deferred until April 29 • Our TRAN payments are in July and August with a final due date of October 1 • We plan to issue next year’s TRAN in October to be ahead of the second deferral

21. The 09/10 revenue limit cut $1,423/ADA

22. Form MYPI: Multi Year Projection • Undesignated + Tier 3 @ 6/10 $ 8,288,987 • Operating Deficit 2010/11 ( 2,544,379) • Adjustment in 2% reserve 709,906 • Unappropriated Balance 6/11 6,454,514 • Operating Deficit 2011/12 ( 1,391,915) • Adjustment in 2% reserve 10,373 • Unappropriated Balance 6/12 $ 5,072,972

23. Cuts substantially curtail the deficit • Unappropriated Balance 6/12 $ 5,072,972Deficit & Rsv Adj - 2012/13 ($ 1,163,673) • Unappropriated Balance 6/13 $ 3,909,299 • Deficit & Rsv Adj - 2013/14 ($ 3,580,926) • Unappropriated Balance 6/14 $ 328,373 • 2013/14 sees the end of flexibility unless legislation is passed to continue it

24. What next?We go back to Sacramento • State budget talks underway in legislature • March Government Price Index establishes 2010/11 COLA • April tax receipts tell the State’s fiscal tale • Governor’s May Revise

25. Thank you. Tune in next time for the next episode of… STATE CAPITOL