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First Interim Budget Report December 8, 2009 Richard Nicoll, Ph.D., Superintendent

Mt. Diablo Unified School District. First Interim Budget Report December 8, 2009 Richard Nicoll, Ph.D., Superintendent Bryan Richards, Director, Fiscal Services. Why an Interim Report?. Ed. Code §42130 requires the Board to certify two interim budget and financial reports

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First Interim Budget Report December 8, 2009 Richard Nicoll, Ph.D., Superintendent

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  1. Mt. Diablo Unified School District First Interim Budget Report December 8, 2009 Richard Nicoll, Ph.D., Superintendent Bryan Richards, Director, Fiscal Services

  2. Why an Interim Report? • Ed. Code §42130 requires the Board to certify two interim budget and financial reports • Certification is either Positive, Qualified or Negative • Positive – The district will meet its obligations for 3 years • Qualified – The district may not meet its obligations for 3 years • Negative – The district will not meet its obligations in current or upcoming year • 1st Interim with transactions to October 31 due December 15 • 2nd Interim with transactions to January 31 due March 15 • If 2nd Interim qualified or negative, 3rd Interim with transactions through April 30 due June 1

  3. When we last left Sacramento… STATE CAPITOL

  4. Revenue Limit Deficit balloons! • We thought we had it bad when the cut to the revenue limit was 17.97% • Has now grown to 22.35%

  5. Unrestricted General Fund Revenue • Revenue Limit Sources $ 158,651,759 • Federal Revenue 225,054 • Other State Revenue 29,134,910 • Other Local Revenue 2,396,999 • Total Revenue 190,408,722 • Less: Net Contrib. to RGF (37,552,110) • Net Available Revenue $ 152,856,612

  6. Revenue Limit is down from 89.8% of revenue to 83.4% because of the deficit.

  7. Unrestricted General Fund Expenditures • Certificated Salaries $ 91,188,209 • Classified Salaries 20,374,155 • Employee Benefits 31,947,487 • Books & Supplies 4,349,668 • Services & Operating 1,716,904 • Capital Outlay 137,720 • Other Outgo 929,381 • Interfund Transfers Out 6,202,658 • Total Expenditures 156,846,181

  8. Salaries and Benefits make up 91.5% of expenditures & transfers out! (This will adjust downward slightly as items are identified to ARRA)

  9. Unrestricted General Fund Summary • Net Available Revenue $ 152,856,612 • Net Expenditures 156,846,181 • Net (decrease) fund bal. ( 3,989,569) • Beginning Balance, July 1 24,529,701 • Projected Ending Balance $ 20,540,132

  10. Components of Ending Balance • Revolving Cash $ 300,000 • Stores Inventory 536,118 • Economic Uncertainties (2%) 5,812,158 • IRS Assessment Resolution 533,550 • FCMAT Implementation 78,965 • Undesignated + Tier 3 Bal. 13,279,341 • Ending Balance $ 20,540,132

  11. Restricted General Fund Revenue • Revenue Limit Sources $ 6,614,982 • Federal Revenue 31,515,828 • Other State Revenue 35,503,387 • Other Local Revenue 7,864,286 • Interfund Transfers In 0 • Net Contrib. from Unr. 38,349,013 • Total Revenue $119,847,496

  12. Restricted General Fund Expenditures • Certificated Salaries $ 34,997,554 • Classified Salaries 20,207,208 • Employee Benefits 22,597,978 • Books & Supplies 20,722,286 • Services & Other Operating 33,227,043 • Capital Outlay 301,514 • Other Outgo 2,505,016 • Transfers Out 0 • Total Expenditures $ 134,558,599

  13. Restricted General Fund Summary • Total Revenue $ 119,847,496 • Total Expenditures 134,558,599 • Net (decrease) in fund bal. (14,711,103) • Beginning Balance, July 1 22,687,425 • Projected Ending Balance $ 7,976,322

  14. 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

  15. Other Funds of the District (cont’d) • Capital Projects Funds (continued) • County School Facilities (State Allocations for construction) – Form 35I • Capital Project for Blended Component Units (Mello-Roos) – Form 49I • Debt Service Funds • Bond Interest and Redemption – Form 51I • Debt Service for Blended Component Units (Mello-Roos) – Form 52I • Foundation Private-Purpose Trust Fund (Scholarship Fund) – Form 73I • All “Other Funds” projecting positive fund balances

  16. General Outlook for the Future • Qualified Certification (we may NOT meet our obligations for this year and the next two) • Concerns • State fiscal health is precarious. Governor already suggesting across the board cuts. The new budget in January could include more mid-year cuts, as may the May revise. • Health care expense increases still exceeding CPI with no COLA to fund them • Declining enrollment for this year at 2%!! • DEFICIT – Our deficit spending is back (due to State cutting our revenue) and must be addressed.

  17. The 09/10 revenue limit cut $1,423/ADA or $47,239,402

  18. Supplemental Information • Form AI: Average Daily Attendance decrease of (655.24) in 09/10 will decrease funding for 10/11. • Form CASH: Cash Flow – to end year positive we must issue a $28M TRAN (this is double what we usually issue due to State deferrals) • Form RLI: Revenue Limit Calculations (Additional State cut of $9,415,303 since adoption from higher deficit factor and additional deficit #3) • Form 01CSI: Criteria & Standards • Form CI: Certification to Sign summarizes Criteria & Standards

  19. Form MYPI: Multi Year Projection • Undesignated + Tier 3 @ 6/10 $13,279,341 • Operating Deficit 2010/11 (13,250,623) • Adjustment in 2% reserve 26,406 • Unappropriated Balance 6/11 55,124 • Operating Deficit 2011/12 (17,396,982) • Adjustment in 2% reserve 67,720 • Unappropriated Balance 6/12 ($17,274,138)

  20. $17,274,000 across 2 years is only the start to fixing the real problem this time around • Unappropriated Balance 6/12 ($17,274,138)Projected Deficit in 2012/13 ($14,396,979) • Unappropriated Balance 6/13 ($31,657,604) • Projected Deficit in 2013/14 ($17,575,150) • Unappropriated Balance 6/14 ($49,319,391) • Average annual deficit over the next 4 years is $15,655,000 per year

  21. How much less must we spend? • Enrollment declines projected to continue through 2014 at rates between 0.71% and 1.26% per year • We must decrease ongoing annual spending by a minimum of $15.7M by 7/1/2010 for the 2010/11 school year OR, • plan for even deeper rounds of cuts later as we will utilize all reserves by June 30, 2011 at our present rate $62.8M/4 = $15.7M; $62.8/3 = $20.9M/yr • These deficit numbers will get bigger if the State cuts more

  22. What next?We go back to Sacramento • Governor’s Budget comes out January 8 • School Services updated dartboard based on the new budget January 12 • LAO will issue review to legislature • State budget talks begin in legislature

  23. Thank you and tune in next time for… STATE CAPITOL

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