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2008-2009 First Period Interim Report December 9, 2008

2008-2009 First Period Interim Report December 9, 2008. 2008-09 1 st Interim. Recap of Governor’s Proposed Budget to State Adopted Changes from Adoption to 1 st Interim Unrestricted General Fund Revenue and Expenditures Multi-Year Projections

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2008-2009 First Period Interim Report December 9, 2008

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  1. 2008-2009First Period Interim ReportDecember 9, 2008

  2. 2008-09 1st Interim • Recap of Governor’s Proposed Budget to State Adopted • Changes from Adoption to 1st Interim • Unrestricted General Fund Revenue and Expenditures • Multi-Year Projections • Highlights from SSC Webcast with representatives from Legislative Analyst, Department of Finance, Governor’s Office, Democratic Legislature and other education associations.

  3. 2008-09 Adopted State Budget • Added 0.68% Funded COLA to Revenue Limit • LACOE recommends to designate a reserve for these funds due to the pending State budget crisis • Restores state categorical programs to zero COLA • Previously, State categorical programs were projected to receive a reduction of 6.5% • LACOE is also recommending to hold these funds until the State deals with the projected State budget shortfall • Restoration of Deferred Maintenance State funding Information Provided by School Service of California

  4. State Mid-Year Budget Reductions • Although the Legislature Adopted the 2008-09 State Budget, it is considered a “get out of town budget” before the election. The State recognized the revenues were not sufficient to sustain the Adopted Budget and have begun an Emergency Session to adjust the 2008-09 State Budget. Therefore, all state revenues are subject to a Mid-Year reduction possibility. • Although the Governor has proposed adjustments to the State budget, final actions have not been taken to solve the budget crisis or agreement on which programs will be affected. Information Provided by School Service of California

  5. Where our funding comes from… Unrestricted General Fund

  6. Where it goes… Unrestricted General Fund

  7. Unrestricted General Fund Changes between 2008-09 Adopted Budget and 2008-09 First Period Interim Report • Revenue Limit ($ 196,966) • COLA funding of 0.68% (designated in reserves) • Lower funding due to prior year Continuation ADA reduction • Other State Revenue $ 572,689 • Restoration of State Categorical to zero COLA • Anticipate improved compliance in K-3 CSR and Summer School • Recalculation of Lottery projection • Additional other state reimbursements

  8. Unrestricted General Fund Changes between 2008-09 Adopted Budget and 2008-09 First Period Interim Report • Local Revenue $ 851,500 • Increase in Lease & Rental Income projection based on prior year experience • Lower interest projection • Increase in Donations • Increase in Sale of Surplus Items • Contribution ($ 10,000) • Contributions for Approach to Excellence from designated reserve

  9. Unrestricted General Fund Changes between 2008-09 Adopted Budget and 2008-09 First Period Interim Report • Salaries and Benefits $ 1,699,505 • Higher Certificated Salaries • Move Vacancy credit to Classified • Movement of higher paid teachers from restricted positions back into unrestricted allocations • Lower Classified Salaries • Relocated Vacancy savings from certificated • Increase for Employee Benefits • Non-Salary related adjustments ($ 359,598) • Decrease for Supplies • Increase for Services • Relocated Debt Service payment for new COP to Fund 40

  10. Multi-Year Projections 2008-092009-102010-11 Enrollment Prior Year Enrollment 20,275 19,716 19,466 Enrollment Decline- 559- 250- 250 Projected CBEDS 19,716 19,466 19,216 COLA 5.66% 0.00% 3.5% Projected Deficit -4.71% -4.71% -4.71% Net Funded COLA 0.68% 0.00% 3.5% Categorical COLA 0.00% 0.00% 3.5% CPI 4.5% 2.8% 2.5%

  11. Future Budget Reductions

  12. School Services of CaliforniaWebcast December 3, 2008 • Over the next 18 months, the Legislative Analyst identified the State Budget shortfall at $28 Billion on an approximately $100 Billion General Fund Budget • Operating Deficits average about $22 Billion annually over the next few years • Department of Finance concurs with projections and says the cash flow situation is even worse than the Budget situation • State may not be able to make some February cash disbursement and will definitely not make March payments without Legislative action • The State has deferred $4 Billion in normal apportionments in 2008-09 and local agencies should expect the same or more in future years

  13. School Services of CaliforniaWebcast December 3, 2008 • Due to the situation, all revenues are on the table for reduction • Governor’s Proposal • Cut Revenue Limits and allow flexibility in categorical program requirements to allow local agencies to address reductions • Legislature Democrats • Preserve Revenue Limit and cut specific categorical programs • Flexibility with prior year Restricted Ending Balances • Eliminate or reduce supplemental categorical program funding in areas such as deferred maintenance, administrator training, school safety/violence prevention, routine maintenance percentage.

  14. School Services of CaliforniaWebcast December 3, 2008 • County Guidance - CSEASA • 1st Interim • Reserve current COLA • Zero COLA for 2009-10 • Identify target dollar amount for reductions • Maintain Reserves • Defer negotiations until January • Monitor Cash • 2nd Interim • Identify detail to reductions • Wait for Governor’s January Budget Proposal • Maintain or Increase Reserve Level

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