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Addressing Long-Term Budget Challenges (Part 9)

Addressing Long-Term Budget Challenges (Part 9). Glendale Unified School District Board Meeting – February 2, 2010. Eva Rae Lueck Chief Business and Finance Officer Glendale Unified School District February 2, 2010. Problems and Solutions (in billions). $19.9. $19.9. $1.0 Build Reserve.

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Addressing Long-Term Budget Challenges (Part 9)

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  1. Addressing Long-Term Budget Challenges (Part 9) Glendale Unified School District Board Meeting – February 2, 2010 Eva Rae Lueck Chief Business and Finance Officer Glendale Unified School District February 2, 2010

  2. Problems and Solutions (in billions) $19.9 $19.9 $1.0 Build Reserve $0.6 Fund Shifts $2.3 Lost Budget Solutions $3.9 Alternative Funds $1.4 Caseload Growth $6.9 Operating $6.9 Federal Funds Shortfall in 2009-10 Budget Act Revision $8.5 Expenditure $3.4 Revenue Decline Reductions $4.9 Adverse Court Decisions Reason for Shortfall Proposed Solutions The Budget GapJanuary 2010 – July 2012 B-13

  3. Budget Solution VulnerabilitiesJanuary 2010 – July 2012 B-13 Solutions (in billions) $19.9 $0.6 Fund Shifts $3.9 Alternative Funds Schools Portion of Reduction $1.5 billion $1.2 billion Administrative Cuts $ .3 billion Flexibility Savings $ 24 per ADA Reduction $6.9 Federal Funds $8.5 Expenditure Reductions $4.9 Adverse Court Decisions Proposed Solutions

  4. 2007-08 2008-09 2009-10 2010-11 Contrast of Statutory and Actual Amount Paid to District Per “Average Daily Attendance” (ADA) $6,367.86 $6,343.86 $6,106.86 Statutory Amount $5,777.86 $1,365 Difference Per Student $5,627.84 Actual Amount $5,777.86 21.5% Deficit Factor $4,978.86 $4,949.04 Statutory & Actual Amounts to GUSD Per “Average Daily Attendance”

  5. Unbalanced State Budgets Cause Major and Sudden Shifts in School District Budgets • The State is required to draft a budget for the following fiscal year in January (Governor’s Budget), update it in May (May Revise), and adopt a final budget in June (June 30). • Drastic shifts can occur at and between these major revisions and districts must respond. One Example from Governor’s Budget: 2010-11 COLA DateProjectedImpact to District Dec 2009 .5% COLA $ .7million Jan 8, 2010 -.38% COLA/-$201 <$5.7 million> Reduction: <$6.4 million>

  6. Budgeting in Uncertain Times 2008-09 2009-10 2010-11 2011-12 2012-13 Adopted Budget First Interim Second Interim Unaudited Actuals $5,480 per ADA $5,346 per ADA $5,225 per ADA $5,628 $4,946 per ADA $5,199 $4,979 $5,148 $4,928 Projected Budget Using State Figures, Dec 2009 Figures Adjusted Using Governor’s Budget, Jan 2010 Possible Additional Cuts if State Savings Unrealized Line of Probability Analyzing State’s Economy

  7. Budgeting in Uncertain Times 2008-09 2009-10 2010-11 2011-12 2012-13 If No Action Taken Adopted Budget First Interim Second Interim Unaudited Actuals $5,480 per ADA $5,346 per ADA $5,225 per ADA $5,628 Projected GUSD Deficit (Before Gov Budget) -- $32.8 million (0% COLA 2009-2012, One-Time $253 Cut in 2009-10) $4,949 per ADA $5,199 Projected GUSD Deficit (After Gov Budget) -- $40.9 million (-38%COLA 2010-11, 1.8% COLA 2011-12, 2.4% COLA in 2012-13, $201 per ADA Cut) $5,148 $4,928 Projected GUSD Deficit (After Gov Budget) -- $50.3 million (-38%COLA 2010-11, 0% COLA 2011-13, $201 per ADA Cut) Projected Budget Using State Figures Figures Adjusted Using Governor’s Budget Possible Additional Cuts if State Savings Unrealized Line of Probability Analyzing State’s Economy

  8. Governor’s Proposed Budget(January 2010) Need to address by 2nd Interim or declare “Qualified” certification Need to address by 2010 Budget Adoption (June 2010) or declare “Negative” certification

  9. Governor’s Proposed Budget(January 2010) Need to address by 2nd Interim or declare “Qualified” certification Need to address by 2010 Budget Adoption (June 2010) or declare “Negative” certification Caution: May Revise projections predict further reductions, thus increasing these deficit levels Caution: These figures do not include a possible $50 per ADA reduction equaling $1.28 m annually Caution: Does not include the potential loss of $7m in 2012-13 if Class Size Reduction (CSR) flexibility is not extended Caution: Does not include a potential revenue limit reduction in 2010-11 due to impact of increased absences in 2009-10 (potential -$1.1 m).

  10. $0 -$10 m -$20 m -$30 m -$40 m -$50 m -$60 m 2010-11 2011-12 2012-13 The Budget GapFirst Interim BudgetDecember 15, 2009(Ending Fund Balance in Excess of 3%) $13.4 m - $6.7 m - $32.8 m

  11. $0 -$10 m -$20 m -$30 m -$40 m -$50 m -$60 m 2010-11 2011-12 2012-13 The Budget Gap Governor’s Proposed Budget with COLAsJanuary, 2010(Ending Fund Balance in Excess of 3%) $7.5 m - $15.6 m - $40.9 m

  12. $0 -$10 m -$20 m -$30 m -$40 m -$50 m -$60 m 2010-11 2011-12 2012-13 The Budget Gap Governor’s Proposed Budget without COLAsJanuary, 2010 (Ending Fund Balance in Excess of 3%) $7.5 m - $18.5 m - $50.3 m 1.8% COLA 2.4% COLA

  13. Early Retirement Incentive Furlough Days Health Insurance Containment $0 -$10 m -$20 m -$30 m -$40 m -$50 m -$60 m 2010-11 2011-12 2012-13 Filling The Budget Gap K-3 Class Size 30-to-1 Examine Summer School Alternatives $7.5 m - $18.5 m - $50.3 m

  14. Early Retirement Incentive Furlough Days Health Insurance Containment $0 -$10 m -$20 m -$30 m -$40 m -$50 m -$60 m 2010-11 2011-12 2012-13 Filling The Budget Gap K-3 Class Size 30-to-1 Examine Summer School Alternatives $7.5 m $6.5m - $18.5 m - $50.3 m $7.5m $6.5 m $6.5 m $6.5 m $6.5 m $6.5 m

  15. Early Retirement Incentive Furlough Days Health Insurance Containment $0 -$10 m -$20 m -$30 m -$40 m -$50 m -$60 m 2010-11 2011-12 2012-13 Filling The Budget Gap K-3 Class Size 30-to-1 Examine Summer School Alternatives $7.5 m $6.5m - $18.5 m - $50.3 m $7.5m $6.5 m $6.5 m $6.5 m $6.5 m $6.5 m

  16. Early Retirement Incentive Furlough Days Health Insurance Containment $0 -$10 m -$20 m -$30 m -$40 m -$50 m -$60 m 2010-11 2011-12 2012-13 Filling The Budget Gap K-3 Class Size 30-to-1 Examine Summer School Alternatives $14 m - $5.3.0 m - $30.5 m

  17. Actions in Progress to Curb Future Budget Deficits • Increasing Class Size in K-3 • Examining Summer School • Proposing to Limit the District’s Contribution to Health Benefits • Offering Early Retirement Incentives • Reconfiguring Work When Individuals Retire or Leave GUSD

  18. Increase K-3 Class Size to 30 Students • Increase K-3 class size to 30 students • Savings $3.7 to $6.6 m (beginning vs. average teacher salary) • Staff Reductions: 112 FTE • Retirements • Reassignments • Reductions-in-Force

  19. Early Retirement Incentive • Early retirement being offered to certificated (GTA), classified (CSEA), and management • Reduce the number of positions without Reductions-in-Force (RIFs/layoffs) • Re-examine staffing ratios • Fiscal impact unknown

  20. School Services General Recommendations for Savings • Requiring Negotiations • Furlough days • Salary roll-backs • Reductions in hours, days, or work year • Elimination or reduction of preparation time • Freeze of step and/or column • Freeze or reduction of contributions for employee health and welfare benefits

  21. Immediate Direction Needed(to prepare for March 15, 2010) • Initial target for class size in grades Kindergarten – 3rd Grade

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