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First Interim Budget Report 2011-12 Activity through October 31, 2011 Presented December 13, 2011

Mt. Diablo Unified School District. First Interim Budget Report 2011-12 Activity through October 31, 2011 Presented December 13, 2011 Steven Lawrence, Ph.D., Superintendent Bryan Richards, Chief Financial Officer. Why is the ending balance higher than projected last year?.

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First Interim Budget Report 2011-12 Activity through October 31, 2011 Presented December 13, 2011

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  1. Mt. Diablo Unified School District First Interim Budget Report 2011-12 Activity through October 31, 2011 Presented December 13, 2011 Steven Lawrence, Ph.D., Superintendent Bryan Richards, Chief Financial Officer

  2. Why is the ending balance higher than projected last year?

  3. Why is the ending balance higher than projected last year?

  4. Why is the opening balance high? • Cash Flow & State Deferrals: • Deferrals increased by $8.55M • Need higher fund balance to maintain positive cash • Programmatic & site budget carryovers $7.5M • Late one time revenue payments • 2009-10 SDA Adjustment $2M • Prior year mandated costs $1.4M • State Fiscal Stabilization supplement $1.6M • Held off spending anticipating an across the board cut of $330/ADA, now pending as “trigger cuts”

  5. Why do we need a high balance? • The state faces another severe deficit and even steeper reductions in spending on core services, particularly education at all levels. - Contra Costa Times, December 13, 2011 • To deal with declining enrollment • To deal with cuts to state funding • To equip us to keep programs going as long as we can until the State’s situation turns around • To strive not to have more layoffs

  6. 2011-12: No COLA + Trigger Cuts • The 2.24% COLA has been fully offset by an addition to the deficit factor • The county advises planning for no COLA in the next two years as well • County advises planning on mid-year trigger cuts being ongoing

  7. Funded Revenue Limit 2011-12 vs. 2010-11 Graph courtesy of School Services of California, Inc.

  8. What does a 19.754% cut look like? • School year is 180 days • 19.754% of school year is 35.56 days • To cut school by 19.754% we would have to close after school ended on April 25th • A 19.754% reduction of the school day would equal over 1 hour less instruction daily

  9. 10/11 revenue limit cut widens to $1,282/ADA

  10. Declining enrollment • We are still in declining enrollment funding model • We are projecting a decline of 201.15 ADA in 2011/12 from 2010/11 • This does not include effect of potential charter school conversion since district will still have to report their ADA

  11. MDUSD ADA is still declining!

  12. How does revenue limit funding look? *Includes $11M reduction due to CVHS Charter

  13. Unrestricted General Fund Revenue • Revenue Limit Sources $ 165,734,968 • Federal Revenue 347,273 • Other State Revenue 31,848,432 • Other Local Revenue 1,893,298 • Interfund Transfers In 0 • Total Revenue 199,823,972 • Less: Net Contrib. to RGF (40,719,672) • Net Available Revenue $ 159,104,300

  14. Revenue Limit is 83% of unrestricted general fund revenue.

  15. Unrestricted General Fund Expenditures • Certificated Salaries $ 92,623,130 • Classified Salaries 19,414,849 • Employee Benefits 33,487,888 • Books & Supplies 5,538,316 • Services & Operating 12,584,907 • Capital Outlay 179,420 • Other Outgo 0 • Interfund Transfers Out 3,904,687 • Total Expenditures 167,733,197

  16. Salaries and Benefits make up 86.75% of expenditures & transfers out

  17. Unrestricted General Fund Summary • Net Available Revenue $ 159,104,300 • Net Expenditures 167,733,197 • Net (decrease) fund bal. (8,628,897) • Beginning Balance, July 1 45,543,430 • Projected Ending Balance $ 36,914,533

  18. Components of Ending Balance • Revolving Cash $ 300,000 • Stores Inventory 419,478 • Economic Uncertainties (2%) 5,857,997 • IRS Assessment Resolution 533,500 • Tier 3 Balances & Site carryovers 6,851,032 • State trigger cuts 9,686,366 • Undesignated 13,266,160 • Ending Balance $ 36,914,533

  19. Restricted General Fund Revenue • Revenue Limit Sources $ 7,134,045 • Federal Revenue 26,528,680 • Other State Revenue 40,072,781 • Other Local Revenue 10,130,583 • Interfund Transfers In 0 • Contribution from Unr. 45,275,298 • Total Revenue $129,141,387

  20. Restricted General Fund Expenditures • Certificated Salaries $ 37,464,789 • Classified Salaries 19,991,549 • Employee Benefits 23,038,613 • Books & Supplies 14,427,980 • Services & Other Operating 27,908,185 • Capital Outlay 1,798,331 • Other Outgo 1,215,293 • Indirect Costs 3,877,515 • Total Expenditures $ 129,722,255

  21. Restricted General Fund Summary • Total Revenue $ 129,141,387 • Total Expenditures 129,722,255 • Net (decrease) in fund bal. ( 580,868) • Beginning Balance, July 1 13,180,547 • Projected Ending Balance $ 12,599,679

  22. 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

  23. Other Funds of the District (cont’d) • Capital Project Funds (continued) • County School Facilities Fund (Developer Fees) – Fund 35I • Capital Project Fund for Blended Component Units (Mello-Roos Measure A) – Fund 49I • Debt Service Funds • Bond Interest & Redemption Fund (Measure C) – Fund 51I • Debt Service Fund for Blended Component Units (Measure A) – Fund 52I • Trust Funds • Foundation Private-Purpose Trust Fund – Fund 73I

  24. Supplemental Information • Form AI: Average Daily Attendance decrease of (201.15) in 11/12 will decrease funding for 10/11. • Form CASH: Cash Flow – Ending GF cash will be positive but projecting a decline of $9.2M • Form RLI: Revenue Limit Calculations • Form 01CSI: Criteria & Standards • Form CI: Certification to sign summarizes Criteria & Standards – QUALIFIED Cert.

  25. Clayton Valley Conversion Charter Effect – Unrestricted General Fund • Revenue Limit decrease $ (10,924,996) • Rent on CVHS property 450,649 • 1% oversight fee 116,536 • Certificated Salary decrease 4,591,659 • Classified Salary decrease 510,091 • Benefits decrease 1,525,846 • Books & supplies decrease 71,152 • Services & operating decrease 307,349 • Tier 3 pass through ($127/ADA) (225,679) • Net effect annually $ ( 3,577,393) • Based on 1,777 units of ADA

  26. Form MYPI: Multi Year Projection • Undesignated @ 6/12 $ 13,266,160 • Operating Deficit 2012/13 ( 8,657,649) • Trigger cut ongoing 12/13 ( 9,626,491) • Adjustment in 2% reserve 273,974 • Unappropriated Balance 6/13 ( 4,744,006) • Operating Deficit 2013/14 (10,793,323) • Trigger cut ongoing 13/14 ( 9,465,376) • Adjustment in 2% reserve 1,973 • Unappropriated Balance 6/13 $ (25,000,732) Based upon first interim guidance, not today’s DOF numbers

  27. Qualified Certification – What does it mean? • The District projects that it may not meet its financial obligations for the current fiscal year or two subsequent fiscal years. • We will meet our obligations for this year • If necessary, we can issue a TRAN to deal with cash flow • Department of Finance report came out too late to be included at first interim • We may be unable to meet obligations for next year based on current projections (depending on what form the additional cuts in the Governor’s January budget take, whether Clayton Valley converts to charter status and settlement of outstanding negotiations)

  28. LAO Issues Budget Assessment • State Revenues tracking $3.7 Billion below projections • Projected $13 billion problem by June 2013 • Projects all Tier 1 and about ¾ of Tier 2 trigger cuts needed to take place

  29. Governor & Department of Finance Report • State revenues tracking $2.2 Billion below projections • Agrees with LAO on size of cumulative problem over two years • Projects full transportation cut and about 5-7% of the additional Tier 2 cut to the revenue limit • Kicks can to next year for balance of the two year $13B problem • Estimated Revenue Limit decrease of $13/ADA • Estimated Transportation decrease of $35.94/ADA • Estimated cut of about $1.6M

  30. What about Solar $? • Solar expected to go online in late Spring 2012 • Savings from COP payments being utilized to fund intervention teachers • Savings from electricity helping to ease the deficit issues we see coming in the budget

  31. What next?More fromSacramento • Governor Brown’s budget will be announced in January • Will include $7B in new taxes proposed in his measure • Will include trigger cuts to re-balance the budget if measure fails

  32. Governor Brown: There will be more cuts next year • From today’s press conference: “There will be more cuts in the January budget for 2012-13, but not for between January and June of 2012.” • $13B hole; taxes cover $7B; need to cut $6B; will try to protect K-12 on its share of the $6B • “I would like to avoid doubling the cuts which will be the effect if the tax measure fails.” • DOF Mantosantos: “All cuts are ongoing.”

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