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2010/11 FIRST INTERIM REPORT

LODI UNIFIED SCHOOL DISTRICT Business Services. 2010/11 FIRST INTERIM REPORT. Board Meeting December 14, 2010. Prepared by: Mr. Douglas Barge Mrs. Carrie Hargis Mrs. Maria Fong Mrs. Angel Murnan. Y: Business ServicesFinancial Reports20101 st Interim. Executive Summary.

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2010/11 FIRST INTERIM REPORT

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  1. LODI UNIFIED SCHOOL DISTRICT Business Services 2010/11 FIRST INTERIM REPORT Board Meeting December 14, 2010 Prepared by: Mr. Douglas Barge Mrs. Carrie Hargis Mrs. Maria Fong Mrs. Angel Murnan Y: \Business Services\Financial Reports\2010\1st Interim

  2. Executive Summary • Staff continues to be concerned about the State’s inability to adopt responsible budgets and stay within those budget allocations • Staff has completed the report using existing law and County assumptions: • Negotiated concessions have been included • Revenue Limit increases have been included even though they may not materialize with the State more than $6 Billion short for this year • Mandated cost reimbursement income has not been included, nor has the final 10% SFSF funding as these amount are not known at this time • On the down side: • The multi-year projections continue to show the need to reduce the budget, in future years, in the manner reported in the 2010/11 Adopted Budget • Staff continues to be concerned about cash and the management of cash • The District cannot continue taking the bulk of the budget cuts from the State and be expected to be the cash borrowing agent for the State i

  3. Lodi Unified School District Introduction • If you add up all of the cuts that the State has made over the last five years they would total more than the entire State budget • Clearly there is something wrong • Many State agencies continue to spend without regard to the budget and the legislature • Economic recovery is not likely until end of 2011/12 • Impact on Education will be even further off • New income is not coming ($1.5B - $1.7B) • Cuts that could happen this year: • Statewide $6 Billion • Education Share 3 Billion • Balance Remaining $3 Billion • Why does this problem keep coming back year after year? • State is budgeting cuts but not cutting spending 1

  4. Lodi Unified School District Legislative Analyst Office • If you think $25.4 Billion is a problem (Get real!) • Add another $3 to $6 Billion onto that number • Even without closing the funding gap, schools could lose Billions in programmatic reductions even if the State funded the minimum guarantee under Prop 98 • Major Causes of 2010/11 Deficit • Federal funding estimate not realistic • Revenues down • Higher than expected expenditures (prisons, employees, Medi-Cal) • For 2011/12 • Temporary nature of 2010/11 budget solutions • Slow economic recovery • Expiration of temporary tax increases 2

  5. Lodi Unified School District Cash • 25% will be deferred from this year and paid next year • Next year 33% will be deferred and paid the following year • The State will have no way to bring these dollars back • They could turn into perminate actual cuts • With cash deferrals at these levels the District has the option of issuing taxable Tax Revenue Anticipation Notes (TRANs) 3

  6. Lodi Unified School District Report Summary • The First Interim Financial Report includes a report of the General Fund and the Charter School Fund (Joe Serna). • Data on the Fund reports include: • Board Approved Budget as of 7/1/10 (Adopted Budget) • Board Operating Budgets as of 10/31/10 • Actuals to Date (Actual Activity as of 10/31/10) • Projected Year Totals (Adjusted Budget as of 11/16/10) • Standards & Criteria for the General Fund • Required by San Joaquin County Offices of Education and the California Department of Education • To develop, review & assess budgets, and interim financial reports of school districts in California 4

  7. Lodi Unified School District Report Summary • Multi-Year Budget Projections are included for 2011/12 and 2012/13 • The current fiscal situation at the State level continues to negatively impact our District budget • To ensure a balanced budget and positive certification, based on the assumptions used in this report, the Board will be required to make reductions in 2012/13 • Additional reductions may be necessary based upon the updated Budget model for 2010/11 and actions from the State in regards to funding for K-12 education • State & County Assumptions • Required by the San Joaquin County Office Education • Details the change from 2010/11 Adopted Budget to 2010/11 Current Budget (as of 11/16/10) 5

  8. Lodi Unified School District Potential Need for Further Budget Cuts 2011/12 2012/13 F.T.E Budget F.T.E Budget Description $ 40,411 $ .55 A. Confidential 751,288 15.14 B. C.S.E.A. C. L.E.A. 3,721,222 59.70 D. L.P.P.A. 3.85 317,428 E. L.U.S.D.A.A. 6.05 651,224 F. Supervisors .55 60,741 G. Other Reductions (*) 412,100 H. Total Problem $5,954,414 85.84 (*) Includes General Reserves, Supplies & Services 6

  9. Lodi Unified School District Recommendation • Staff is recommending approval of the 2010/11 First Interim Financial Report for the Lodi Unified School District • Direct staff to research and bring forward a recommendation regarding the issuance of taxable Tax Revenue Anticipation Notes (TRANs) 7

  10. Lodi Unified School District Required State & County Reports *See Separate Attachments in Board Item*

  11. Lodi Unified School District This Concludes Our Report ii

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