CALISTOGA JOINT UNIFIED SCHOOL DISTRICT

2010-2011

UNAUDITED ACTUALS FINANCIAL REPORT

Graphics courtesy of School Services of California

Superintendent: Dr. Esmeralda Mondragon

Governing Board: Marty Hunt, President To be determined, Clerk Marco DiGiulio, Trustee Indira Lopez, Trustee Jeff Maxfield, Trustee

Superintendent: Dr. Esmeralda Mondragon

Governing Board: Marty Hunt, President To be determined, Clerk Marco DiGiulio, Trustee Indira Lopez, Trustee Jeff Maxfield, Trustee Presented for approval on September 19, 2011

By Teri Malvino, Director of Business ServicesPresented for approval on September 19, 2011By Teri Malvino, Director of Business Services

Financial ReportingRequirements

Fiscal YearJuly 1, 2010 – June 30, 2011

1st InterimJuly 1 – October 31

Due to COEDecember 15

2nd InterimJuly 1 – January 31

Due to COEMarch 15

Unaudited Actuals

July 1- June 30

Due to COESeptember 15

2

GOALS DRIVE BUDGETDistrict Strategic Goals

Ensure Academic Excellence for All Students

Develop a Positive and Unified School Community Culture

Maintain and Improve Facilities

3

2010 - 2011

ALLFUNDS

SUMMARY

4

ALL FUNDS

REVENUESDoes include other financing sources/uses

Funds 2009-10 Actuals

2010-11 Actuals

Difference

General 11,971,532 11,244,932 <726,600>

Cafeteria 438,802 442,131 3,329

Deferred Maintenance

3,402 94,091 90,689

Special Reserve - Non Capital Outlay

835 586 <249>

Building Fund 5,962 5,962

Developer Fees 65,234 34,686 <30,548>

Special Reserve - Facilities Fund

5,840 7.197 1,357

Bond Interest and Redemption Fund

232,710 220,940 <11,770>

Retiree Benefit Fund

14,298 52,992 38,694

General Fund

$ 199,150 Property Taxes (Rev Limit Sources)

$ 117,801 Federal

$ - 756,397 State- 33,233 Spec Ed (Prior Yr.)

- 36,830 Transportation- 17,714 Spec Ed Trans.- 40,923 EIA (Econ. Impact Aid)

- 70,758 State (Prior Yr.)- 145,577 K-3 CSR- 13,456 Lottery- 465,374 All Other State+ 67,468 Mandated Cost Reimbursement

$ - 287,154 Local Income- 211,509 Sp Ed Prop Tax- 18,133 Interest Income- 5,000 Summer Sch.- 20,000 ASES/Career- 8,000 After Sch/ASES- 12,000 Daycare- 12,512 Donations

Deferred Maintenance

$ 42,507 State Match$ 50,179 Extreme Hardship (Roof Project/CHS)

Developer Fees

$ - 28,171 School Impact Fees

Bond Interest & Redemption

$ - 11,770 Property Tax &Interest Income

Retiree Benefit Fund

$ 38,694 Interest Income

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ALL FUNDS

EXPENDITURESDoes include other financing sources/uses

Funds 2009-10 Actuals

2010-11 Actuals

Difference

General 10,929,677 10,689,293 <240,384>

Cafeteria 420,837 500,833 79,996

Deferred Maintenance

256,019 41,114 <214,905>

Special Reserve - Non Capital Outlay

0 0 0

Building Fund 0 429,572 429,572

Developer Fees 148,301 197,750 49,449

Special Reserve - Facilities Fund

<43,219> <10.336> <32,883>

Bond Interest and Redemption Fund

219,037 222,495 3,458

Retiree Benefit Fund

3,182 4,387 1,205

General Fund

$ - 27,669 Salary/Benefits

$ - 307,296 Equipment/Services2009-10 Busses2009-10 Truck

$ - 130,494 Transfers In/Out- 89,340 Def. Maint.- 40,309 Retiree Trust

$ 225,075 Services/Other

Cafeteria - Point of Sale System

Deferred Maintenance2009-10 CJSHS Roof Project

Building FundGOB Sale & Pre-construction

Developer FeesCOP Gallis Property payment

Special Reserve-Facilities2008-09 Payables closed

Bond Interest/Redemption FundPrincipal & Interest payments

Retiree Benefit FundPARS Administration fees

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2010 - 2011

GENERALFUND(FUND 01)

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Basic Aid vs. Revenue Limit

2007-08 2008-09 2009-10 2010-11 $-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

$10,000,000 $8,379,555 $9,250,324 $9,228,759 $9,326,500

$4,87

1,614

$4,74

6,942

$4,47

8,592

$4,33

1,944

(Data from Unaudited Actuals - Form RL)

Basic Aid Revenue Limit

General Fund

Unrestricted and Restricted

PROPERTY TAX REVENUE (Revenue Limit Sources)

$9,805,825

87%

FEDERAL$532,729

5%

STATE$711,803

6%

LOCAL / OTHER$194,574

2%

2010 – 2011Unaudited Actuals

$11,244,932

General Fund

Unrestricted and Restricted

Cer-tifi-

cated Salari

es$5,324,85850%

Clas-sified Salari

es$1,921,12718%

Em-ploye

e Bene-

fits$1,709,85116%

Books &

Sup-plies

$487,0325%

Ser-vices/Utili-ties

$1,242,75711% Capital Outlay

$35,670Less than 1%

Other$-32,002

Less than 0%

Salaries and benefits ($8,955,836) vs. Total Outgo ($10,689,293) = 84%Salaries and benefits ($8,955,836) vs. Total Revenue ($11,244,932) = 80%

Salaries and benefits ($8,955,836) vs. Total Unrestricted Property Tax Revenue ($9,805,825) = 91%

2010-11Unaudited Actuals

$10,689,293

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2010 - 2011

SUPPLEMENTAL INFORMATION

• 2010-2011 Key Achievements

• State COLA vs. CJUSD

• Enrollment vs. Average Daily Attendance

• 2011-2012 Budget Assumptions

• School Services Fiscal Report Basic Aid Reserves – How much is enough

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2010 – 2011

• Measure A approved by voters

• Bonds issued:– $6.5M General Obligation Bonds– $1.5M Clean Renewable Energy Bonds

• Pre-construction phase in progress

• CJUSD & SHUSD develop UVSSJPA Up Valley Support Services Joint Powers Authority

Leverage higher level of services for greater efficiency and effectiveness

• Point of Sale System implemented

• Technology in the classroomFoster 21st Century learning

• Medical Administration Authority (MAA) Capture revenue reimbursement for mandated

services

• Deferred Maintenance–fully funded

• Routine Maintenance–fully funded

• 1.75% off-schedule salary compensation

KEYACHIEVEMENTS

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CJUSD is fortunate to be a Basic Aid District

Fiscal Year

State COLA

Calistoga Settlement

One-Time Bonus

1993-94 -0.56% 1.00% 3.00%

1994-95 0.00% 3.00% 4.00%

1995-96 2.73% 2.00% 2.00%

1996-97 3.21% 3.50%  

1997-98 2.65% 3.00%  

1998-99 3.95% 3.63%  

1999-00 1.41% 3.20%  

2000-01 3.17% 8.52%  

2001-02 3.87% 2.80%  

2002-03 2.00% 1.89%  

2003-04 -1.20% 4.50% 0.50%

2004-05 2.41% 3.80%  

2005-06 4.23% 5.50%  

2006-07 5.92% 6.90%  

2007-08 4.53% 6.15%  

2008-09 -2.67% 7.30%  

2009-10 -7.64% 0.00%  

2010-11 -0.39% 0.00% 1.75%13

Enrollment vs.

Average Daily Attendance

ATTENDANCE MATTERS

06-07 07-08 08-09 09-10 10-11325

345

365

385

405

425

445

465

485

CES En-rollment

CES ADA

CJSHS Enrollment

CJSHS ADA

District WideEnrollment

vs.Average Daily Attendance

99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11760

780

800

820

840

860

880

900

920

940

960

980

Enrollment ADA

2011 - 2012BUDGET

ASSUMPTIONSNapa Co. property tax revenues to be increased 1.5% over 2010-11 ActualsNo increase to Sonoma Co. property tax revenueState Categorical COLA based on School Services Dartboard

2010-11 Basic Aid “Fair Share” reductions budgeted in 2011-12Deferred Maintenance – fully fundedRoutine Restricted Maintenance – fully funded

PARS and STRS Golden Handshake budgeted in 2011-12

District will continue to focus on implementation of Strategic Plan Objectives

Step and Column budgeted in 2011-12

10% Reserve for Economic Uncertainty (REU)

Maintain 1-time $220,000 REU set-aside

GOB pre-construction costs to be budgeted to Fund 21

District is committed to continue conservative budgeting 16

School Services of California Issue #43, October 2010

Basic Aid Reserves—How Much is Enough?Over the past three decades, we have often written about the level of reserves needed in basic aid districts and why they need to be higher than those of revenue limit districts. Most of the advice we have given has been offered during more “normal” times than these. We, therefore, want to update our advice and the rationale for that advice in light of current economic times and the practical considerations necessary to cope with those conditions.

Basic Aid Reserves During Good TimesDuring good times, when revenue limit districts get their historical average of about a 4% increase in revenues and basic aid districts get their historical average of about 6.5% in increased property taxes, our advice to basic aid districts is very straightforward. We think that, in addition to the standard 3% reserve for economic uncertainties maintained by all districts, basic aid districts need to put aside a separate basic aid reserve equal to about 1/3 of the difference between the district’s revenue limit funding level and its basic aid funding level.

As a revenue limit district transitions to basic aid, we recommend that in the first year the district set aside at least 1/3 of the excess revenues provided by property taxes. So, if the district gets $3 million above its revenue limit funding level, we recommend that you reserve $1 million and spend no more than $2 million. In the second year, if the district gets another $3 million, for a total of $6 million, another $1 million should be added to the reserve and no more than $5 million would be spent. As you can see, reserves only have to be set aside once and, therefore, spending increases proportionally each year after the first year.

Districts that have followed our recommendations typically carry a standard 3% reserve for economic uncertainties and another 33% in the basic aid reserve. Our reason for recommending the higher reserve is that basic aid districts have no protection when property taxes decline until they once again become a revenue limit district. (Revenue limit districts have some degree of protection because they are funded on the greater of current– or prior-year ADA.) Any negative changes in enrollment, expenditures, or property tax revenues are the sole responsibility of the district. We think our recommended policy regarding the level of reserves has served basic aid district well for three decades. 17

Basic Aid Reserves During Bad TimesAs we have seen more recently, during bad times—those when the state is cutting both revenue limit and categorical funding and property taxes are declining as well—we think further discussion of reserves is in order. Specifically, the threats to fiscal stability for basic aid districts have increased in both number and severity.

Over the past three years, state-wide average property taxes have declined each year. Additionally, beginning in 2008-09, categorical funds received by all districts, including basic aid districts, have been cut by a total of 19.84%.We have also seen periodic renewals of the state’s attack on excess property taxes. And to create the perfect storm, basic aid districts are expected to pay a “fair-share” contribution equal to the per-student amount lost by revenue limit districts. (Although the state has reversed its latest proposed revenue limit reduction and therefore basic aid districts are not currently required to make a fair-share contribution for 2010-11, they will make the 2009-10 contribution in 2010-11.)

Schools of choice, charter schools, districts of choice and other unique district factors, such as the loss of a major employer or construction slowdown, have also affected the fiscal stability of basic aid districts. For many basic aid districts, especially those that are newly basic aid not so much from growth in property taxes, but because of reductions to the revenue limit, the vulnerabilities are overwhelming. The newer basic aid districts, especially those that “backed-into” basic aid, may be barely above the level of revenue limit funding and have not yet had a chance to build a basic aid reserve.

As a result, in the short term many basic aid districts are seeing their reserves erode at an alarming rate. It is no longer unusual to hear that a basic aid district has a serious fiscal problem. At least a couple have implied that, absent an improvement in the economy, they will receive a qualified or even negative certification. Especially vulnerable are those newer basic aid districts that have experienced substantial declines in property tax revenues, increasing enrollment, creation of charter schools, and other losses of revenue or increased costs. And for all districts, the delayed payment of categorical funds has created cash flow challenges.

School Services of California Issue #43, October 2010

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So, How Does This Impact Our Advice On Reserves?First, current economic conditions and their effect on basic aid districts has reinforced our conviction that basic aid districts definitely need higher reserves than do revenue limit districts. And we think that, long term, our 33% guideline remains appropriate. But as we have seen recently, even a very conservative reserve can evaporate quickly. The combined effects of step and column and health and welfare benefit increases, the “fair-share” contribution, increased costs of special education and other programs, and lost revenue have caused many basic aid districts to spend major portions of the reserve just to get through the current year, not to mention the challenge of meeting the state-required three-year multiyear projection.

Coupled with the considerable uncertainty as to whether a new administration will maintain the recently enacted Budget, basic aid districts have good reason for concern. Our advice is that basic aid districts remember that “Cash isKing” and that they avoid new commitments, at least until the May Revision next spring. It is easier to spend money you do have late than to deal with the problem of spending money early and finding out you do not have it. We believe that any reduction to revenue limits by the new administration will be accompanied by yet another “fair-share” contribution from basic aid districts. We think spending less and spending it slower is good advice for all districts, but particularly for the basic aid districts.

Bottom line, we now see our former recommendation as being the bare minimum, not the more comfortable level we once expected it to be. So now when a district asks us how much they need to have in reserve, our answer is always the same: “More.”—Ron Bennett

School Services of California Issue #43, October 2010

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GOALS DRIVE BUDGETDistrict Strategic Goals

Ensure Academic Excellence for All Students

Develop a Positive and Unified School Community Culture

Maintain and Improve Facilities

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Questions?

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