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Dos Palos – Oro Loma Joint USD Fiscal Advisor Report November 18, 2010. Board’s Fiscal Responsibilities. Avoid deficit spending Prevent a negative fund balance Meet the legally required 3% reserve Maintain adequate cash. What Happened Here?. State budget crisis hit hard
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Dos Palos – Oro LomaJoint USDFiscal Advisor ReportNovember 18, 2010
Board’s Fiscal Responsibilities • Avoid deficit spending • Prevent a negative fund balance • Meet the legally required 3% reserve • Maintain adequate cash
What Happened Here? • State budget crisis hit hard • Declining enrollment • District’s choices to: • Maintain small class sizes • Provide expensive programs • Avoid making cuts soon enough
Current District Crisis • There is plenty of blame to go around • Let’s place most of the blame where it belongs -------- on the economy
State Budget Crisis ImpactEvery dollar owed to DPOLis funded at $ .83with payments deferred for several months during the year
We simply do not get enough cash from the State to meet even our payroll obligations
Now What? • Meet monthly payroll obligations • Make difficult decisions quickly • Closely monitor use of cash • Implement significant cuts now
Consequences • Running out of cash • Not meeting payroll • Forced to seek State loan • Loss of local control
What Would Getting a State Loan Mean for DPOL? • Requires legislative approval • Long term expensive obligation to repay the loan – up to 20 years • Added expense = even more cuts • DPOL would be only the 7th District to require a State loan
Loss of Local Control? • Board becomes advisory only • Superintendent is dismissed • State Trustee assigned • Another added expense on top of loan • Here until loan fully repaid (20 years) • Total control over all decisions • Extensive cuts to reduce costs
The District must act now to protect local control All stakeholders need to recognize the risk and participate in the process