First Interim ReportDecember 15, 2011

Tonight’s PresentationDistrict’s first interim report

To provide a summary to the Board of our current financial situation with updated assumptions and projections

District’s multi-year outlookTo provide a summary to the Board of the

assumptions of multi-year projectionsPresentation of E-2

Identification of the budget reductions and fiscal plan for the San Diego County Office of Education

BudgetMost change occurs from the adoption of the

Budget (July 1st) until the First Interim Report State of California Budget is not even signed

Adopted budget had a revenue limit reduction built in Increased revenue limit is the largest change

Previous year’s Budget is not finalized Unspent dollars from the previous year needs to be

budgeted in current year Changes to expenses due to carryover is the largest

changeInformation on other budget items are not

known Final cost increases of health care Summer time resignations enrollment

The 2011-2012 Budget, First Interim TotalsTotal Revenues $46,217,387Total Expenses $53,248,092Difference ($ 7,030,705)

Transfer from Fund 17 $ 986,000

Beginning Balance $ 8,194,395Ending Balance* $ 2,149,690

*Projected Ending Balance for June 30, 2011

Carryover Factored Into BudgetCarryover in Budget*

Site/Dept. Carryover $ 666,713.12Formerly Restricted Cat. $ 1,214,769.74Restricted Cat. $ 1,285,009.66Total $ 3,166,492.52

Consists of budgeted expenditures, no new revenues Revenues are from previous years

*From 2009-2010 Unaudited Actuals (page 2), which was presented to the Board in August 2010

Multi-Year ProjectionsState requires each district to project out

current year and next two fiscal years to maintain fiscal health and to identify any significant issues

RUSD’s reserve meets State’s requirement for 2011-2012Triggers?

RUSD’s reserve will not meet the State’s requirement for 2012-2013Qualified Status: A district might not be able to

meet its financial obligations for the current and two (2) additional years

Our current projections2011-12 2012-13 2013-14

Revenue 46,217,387 46,102,060 46,993,484

Expenses 49,905,240 51,075,908 52,456,308

Difference 3,687,853 4,973,848 5,522,824

Carryover Expenses 3,342,852 0 0

Reserve Fund Above 3% Min.

986,000

0 0

Beg Balance 8,194,395 2,149,690 2,824,158

Ending Balance 2,149,690 2,824,158 8,346,9827

Assumptions for 2012-2013Revenue

Same revenue formula as this yearAdd a 2% Cost-of-Living increaseNo mid-year triggersContinued declining enrollment

ExpensesIncrease in health care costs (10%)Step & Column salary increases

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Basic problemRecent trend of state revenue falling below

district’s annual expensesSupported by ARRA, Federal Jobs Bill, State

budget tricksAnnual costs

Declining student enrollment 100 students = $523,000

Rising health care costs (10% = $558,000)Step & Column for all employees ($538,000)

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San Diego County Office of EducationIn June 2010, SDCOE had 3 conditions for the

approval of the RUSD 2011-20122 Budget1. Adopt a resolution which identifies the

amount of budget reductions needed2. Submit the list of reductions that have been

made and the timetable for making remaining reductions

3. Submit a list of Board approved budget reductions which corrects the 2011-2012 imbalance

Current Year Reductions One-time reductions

District and site grantsMid-year retirementsReduce long-term sub payIMFRP carryover – 100%SLIP carryover – 90%Site/Dept allocation carryover – 90%Ed Services carryover – 100%

No Cuts to carryover from lottery, GATE, donations, or Outdoor Ed

TOTAL: $ 1,751,000 (one-time, only)11

Spread over three years One-time reductions will be spread over

three years:2011-12 (current year)2012-132013-14

Feels like an annual ongoing savings of:

Annual TOTAL: $ 583,000

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Proposed reductions for 2012-2013Site allocation for IMFRP (50%)BTSAEd Services allocationsSocial Security alternative (PERS rule)

No Cuts to basic site allocation, basic SLIPTOTAL: $195,000

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Student bussingContinue to streamline transportation

services, including possible increase of student fees

TOTAL: $100,000 (or more)

Note: Complete elimination of bussing for General Ed students may save as little as $300,000.

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Avoid replacing retireesMaintain selected vacancies:Administrative positionsClassified positionsCertificated positions

Most elementary classroom positionsSelected secondary classroom positions

TOTAL: $ 700,000

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Reduction in Force Administrative positions Classified positions Certificated positions

IssuesPer diem pay for tenured teachersClass size penalties for K-3 CSRClass sizes approaching maximum levelsNeeds of our children

TOTAL: $ 500,000

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Potential ongoing reductions$ 583,000 One-time site/dept

reductions 195,000 Ongoing site/dept reductions 100,000 Student transportation 700,000 Retirees 500,000 Layoffs

TOTAL: $2,078,000

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Employee concessionsReduction of salaries (via furlough days or

across-the-board cuts)Contribution toward benefits

TOTAL: $2,500,000 (from 2012-13 values)

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The Board’s objectivesRestructure the District budget for the long

view Maintain maximum support for educational

programs and studentsSupport employees to the fullest extent

possible – in light of the challenging fiscal dilemma

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QuestionsQuestions?

Comments?

Concerns?

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In SummaryStaff is recommending the Board’s approval

of item E-1 First Interim ReportStaff is recommending the Board’s approval

of item E-2 reduction plan to be submitted to San Diego County Office of Education