2008/09 FISCAL YEAR FINANCIAL UPDATE Board Meeting September 16, 2008

1. LODI UNIFIED SCHOOL DISTRICT Business Services 2008/09 FISCAL YEAR FINANCIAL UPDATE Board Meeting September 16, 2008 Prepared by: Dr. Odie Douglas, Mr. Douglas Barge, Ms. Maria Fong & Ms. Carrie Hargis Y:\business services\budget\2008-09\adjusted\meetings\B09-16-08\Financial Update B09.16.08.ppt

2. The District is experiencing a dramatic drop in student enrollment. The State hasn’t adopted a budget; adding complexity to our process. Cash flow is being heavily impacted by changes in State practices. The forecast for 2009/10 is even worse. Current model indicates structural out of balance is heading in the wrong direction. State still isn’t fixing its problems. Timing has required us to move forward using estimated amounts for some items. This presentation addresses the current year problem only. Doesn’t leave “shock absorber” capacity. Staff is presenting a recommendation that does not include reduction of temporary teachers or moving teachers between sites. This strategy will mean substantial cuts for the future. Executive Summary i

3. Introduction Student Enrollment Balancing Sources & Uses Options, Recommendation & Timelines Appendix Prior Years CBEDS & Enrollment Trend Charts Financial Impact – Expenditures Financial Impact – Funding Sources Table of Contents DESCRIPTION PAGE # 1 2-4 5 6-9 A-1 – A-6 B-1 – B-4 C-1 – C-2 ii

4. Introduction • Enrollment • Declining from 2008/09 Projected Budget • Declining from 2007/08 CBEDs • These trends are significant enough (+1%) to send “red” flags to the County Office of Education on Interim Financial Reports. • Categorical programs have been fully utilized and carryovers are less than prior year trends. • We need to begin planning now. (Per Doug!) 1

5. Student Enrollment iii

6. Current Enrollment as of 9/5/08 2

7. All Grades ~ 2008/09 3

8. Elementary ~ 2008/09 4

9. Balancing Sources & Uses iv

10. Descriptions On-Going One-Time Total $5,065,275 A. Uses(Appendix B1-B3) ($932,052) $5,997,327 B. Sources 1. Income From Students ($3,136,763) ($3,136,763) ($200,000) $7,211,993 7,011,993 2. All Other Sources (Appendix C-2) ($3,336,763) $7,211,993 $3,875,230 3. Total Sources C. Total Funds Available ($2,404,711) $1,214,666 ($1,190,045) D. Structural Balancing (467,004) 467,004 0 E. New Structural Balance ($2,871,715) $1,681,670 ($1,190,045) Recapping the Balance 5

11. Options, Recommendation & Timelines v

12. Options Considered 6

13. Recommendation Note: If this recommendation is not agreeable and there is direction to reduce over-formula teachers (page 6, items D-F) that action would result in the reduction of temporary teachers and movement of students between schools at the K-6 level. 7

14. Honor 2008/09 agreements with employee groups Continue delaying the hiring process in some vacant positions Continue reviewing the need to fill some vacant positions Maximize use of categorical funds Maintain employment of existing probationary and permanent staff Reduce site General Fund carryovers to 10% (vs. current 15%) (submit hardship appeal, if necessary) Reviewing Key Messages 8

15. Timeline & Next Steps • Cabinet Review 9/8/08 • Review Report with Employee Groups prior to 9/16/08 • Board of Education Approval 9/16/08 • Board of Education Action 10/7/08 • Budget Revisions • Unaudited Actuals • Gann Limit • State Adopted Budget ????? 9

16. The End!

17. Appendix “The Details” • Prior Years CBEDS & Enrollment Trend Charts • Financial Impact - Expenditures • Financial Impact - Funding Sources A-1 – A-6 B-1 – B-4 C-1 – C-2 vi

18. Comparison to Prior Year CBEDs A-1

19. All Grades ~ History A-2

20. Elementary ~History A-3

21. Middle Schools A-4

22. High Schools A-5

23. Other Programs Schools A-6

24. Summary of Expense Changes DESCRIPTION F.T.E BUDGET 1. Teacher Staffing (18.90) ($1,158,052) 2. Per Pupil Allocations (27,570) 3. Special Education Staffing (6.76) (304,722) 4. Total Growth Expenses ($1,490,344) (25.66) B-1

25. 3. Total On-Going Expenses $558,292 6.76 Summary of On-Going Expenses Descriptions F.T.E BUDGET 1. Required Changes (*) $253,570 6.76 2. Re-Instate Special Education Staffing 304,722 B-2 * Details are available

26. 5. Required Changes (*) 52,000 6. Total One-Time Expenses 18.90 $5,997,327 Summary of One-Time Expenses DESCRIPTIONS F.T.E. BUDGET $4,439,743 1.Carryover of Site/Support Allocations (*) 2. Purchase Order Carryovers (*) 200,000 3. Re-Instate Teacher Staffing 18.90 1,158,052 4. General Reserve Requirements (3%) 147,532 B-3 * Details are available

27. On-Going One-Time F.T.E Budget Description F.T.E Budget A. Growth Costs (25.66) ($1,490,344) B. Increased On-going Costs 558,292 C. Increased One-time Costs $5,997,327 18.90 D. Total Estimated Uses ($932,052) $5,997,327 (18.90) 18.90 Total F.T.E. -0- In Appropriations $5,065,275 Recapping of Increased Costs 6.76 B-4

28. E. Total Estimated New Income ($3,136,763) On-Going Funding Sources NEW INCOME BUDGET A. Net Growth Income ($2,664,600) B. Special Education Growth (261,898) C. Class Size Reduction – Grades K-3 (153,153) D. Lottery (57,112) C-1

29. Other Sources Total Budget Description On-Going One Time $1,800,000 A. Existing Carry Over Reserves $1,800,000 4,111,993 B. Ending Fund Balance 4,111,993 (200,000) C. Interest (due to reduced cash) ($200,000) 1,300,000 D. One Time Funds – Declining Enrollment $1,300,000 E. Total Other Sources ($200,000) $7,211,993 $7,011,993 C-2