Cambrian School District

2011-12 First Interim Report

December 8, 2011

Presented by:

Don FoxInterim CFO

First Interim Report

● School boards are required to certify the projected year end and subsequent years’ financial condition twice a year

■ Known as Interim Reports

● The First Interim is a snapshot of the District’s financial position as of October 31, 2011

● Included in this report is a multiyear projection for fiscal years 2012-13 and 2013-14

1

$16,2

85,5

69

$16,5

12,4

52

$1,4

10,9

73

$1,4

56,9

43

$3,1

07,0

37

$3,8

52,8

15

$2,5

16,2

21

$2,4

79,0

46

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

$20,000,000

RevenueLimit

Federal OtherState

OtherLocal

2011-12 Adopted Budget

2011-12 at 1st Interim

Revenue Changes from Adopted Budget to First Interim Report

Rev. Limit $ 226,883

Federal 45,970

Other State 745,778

Other Local <37,175>

Total $ 981,456

General Fund Revenue Changes from Adopted Budget to First Interim Report 2

1xxx Certifi-cated

Salaries

2xxx Classi-fied

Salaries

3xxx Em-

ployee Benefits

4xxx Books and Sup-

plies

5xxx Ser-vices and

Other Operat-

ing

6xxx Equipment

7xxx Other Outgo

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

$20,000,000

$13,964,323$

3,0

71

,92

8

$4

,22

2,6

79

$6

59

,66

5

$2

,77

4,1

53

$4

1,9

50

$1

1,1

09

$1

3,2

85

,19

7

$3

,14

4,5

12

$4

,37

2,7

66

$1

,23

3,8

27

$2

,99

9,0

46

$4

1,9

50

$1

1,1

09

2011-12 Adopted Budget2011-12 at 1st Interim

Expenditure Changes from Adopted Budget to First Interim Report 3

Expenditure Changes from Adopted Budget to First Interim Report

1xxx $ 759,157

2xxx 72,584

3xxx 150,087

4xxx 574,162

5xxx 224,863

6xxx 0

7xxx 0

Total $ 1,780,853

Budget Assumptions and Multiyear Projections

● 2011-12: 2.24% revenue limit COLA with ongoing 19.754% deficit

● 2012-13: 3.10% revenue limit COLA* with ongoing 19.754% deficit

● 2013-14: 2.80% revenue limit COLA* with ongoing 19.754% deficit

● From 2011-12 to 2012-13: Revenues in other state and federal funding remains “flat” – no COLA applied

● ADA projected to be static in “out” years

● One-time federal funding is exhausted in 2011-12

● Deficit spending is projected in 2012-13 due to reversion of penalties for Class Size Reduction and collective bargaining agreement changes

4

*Based on State’s ability to fund

Multiyear Projections – Many “Moving Parts”

Current Year2011-12

Current Year Plus 12012-13

Current Year Plus 22012-13

State’s Structural Budget Deficit

State Budget “Trigger”pulled

Federal Jobs Dollars

State Budget Uncertainty Remains

No Furlough Days

State Budget Unceretainty

5

Certification of Financial Condition

● The recommendation from staff to the Board is to approve the First Interim Report as submitted

■ Positive Certification

This means that based upon current assumptions and projections the District will meet its financial obligations for the current fiscal year and subsequent two fiscal years

6

Ongoing State Budget Concerns

● The current State Budget assumed dramatically improved revenues.

● Revenues have fallen short and as a result it appears that the trigger mechanism defined in the budget compromise will certainly be pulled.

● Most experts doubt that the trigger cuts will ultimately be as are currently statutorily defined, but what???

● First preview will likely be in conjunction with the release of the Governor’s 2012-13 proposed budget in January.

7

Cautions About the State Budget

● How should we treat this Budget?

■ The recommendation from financial experts is: Include a provision for midyear revenue cuts in the current

year. Reevaluate in January in the context of the Governor’s

Budget Proposal for 2012-13. Assuming no legislative solution in the interim, the

Governor’s May Budget Revision next spring, will be the next important peek at what the future may hold.. The State Budget solution is ultimately more a matter of

politics than sound economics

8

Questions

● Questions?