First Interim ReportDecember 18, 2014

Tonight’s PresentationDistrict’s First Interim Report

Provides a summary to the Governing Board of the District’s current financial situation with updated assumptions and projections

District’s multi-year outlookProvides a summary to the Governing Board of

the assumptions of multi-year projections

2014-2015 BudgetMost changes occur from the adoption of the

budget (July 1) until the First Interim Report State of California Budget

Trailer bills, which define some of the funding that was not signed, includes one-time mandated cost dollars

RUSD’s previous year’s budget was not closed Unspent dollars from the previous year needed to be

budgeted in the current year and the previous year’s ending balance needed to be updated in the new projections

Information was not yet known on other budget items The final cost of employee settlements from June of 2012 Summertime resignations Current year enrollment and staffing

This year, changes are similar to changes which occurred in past years

The 2014-2015 BudgetFirst Interim TotalsTotal Revenues $48,645,308Total Expenses $53,678,724

Beginning Balance $ 7,928,488Ending Balance* $

2,895,070

*Projected Ending Balance for June 30, 2015

Carryover Factored Into BudgetCarryover in Budget*

Site/Dept. Carryover $ 1,564,137Formerly Restricted Cat. $ 1,716,708Total $ 3,280,845

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

*From 2013-2014 Unaudited Actuals, presented to the Governing Board in August 2014

Changes from Budget AdoptionTo be able to spend the dollars from the ending

balance, expenditure budgets must be developedThe expenditures go up by $3.28 millionThe majority of dollars are in the 4000 object code

Revenues that significantly increasedLocal Control Funding Formula increaseOne-Time Mandated Costs revenuesOut-of-Home BedsFederal dollars from Title One and Medi-Cal

Reimbursements

Changes from Adopted BudgetSignificant changes to expenses

Increase to the utility budget for electricity This was offset by the reduction to diesel fuel costs

Employee compensation Step and column is corrected Resignations, replacements, and new hires are in place The final cost of the settlement to all employee groups

for the June 2012 agreement and the August settlement with CSEA

Additional dollars budgeted for deferred maintenance needs

COP payments

Certificates of ParticipationWith the increase of revenues from developer

fees, the current year’s General Fund contribution to the Certificates of Participation dropped to $1,425,000Since the development of this report, an

additional $35,000 has been received, so this expense will decrease by at least $35,000

In 2015-2016: $1,685,381 payment from General Fund

In 2016-2017: $1,760,494 payment from General Fund

Multi-Year ProjectionsAB 1200 requires each district to project the

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 the 2014-15 and 2015-2016 school years

With the current set of assumptions, RUSD’s reserve will likely not meet State’s requirement for the 2016-2017 school yearQualified Status: A district might not be able to

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

A qualified budget can change at the second interim with new or updated information

Multi-Year Projections  2014-2015 2015-2016 2016-2017Current Yr. Revenues $ 48,645,308 $ 48,839,437 $ 49,031,620 Current Yr. On-Going Expenses $ 47,452,879 $ 48,761,728 $ 50,816,343

Deficit/Surplus $ 1,192,429

$ 77,709

$ (1,784,723)

COP Payment From General Fund $ 1,425,000 $ 1,685,381 $ 1,760,494

One-time Expense from Carryover** $ 3,280,845

$ -

$ -

One-Time Expense for Employee Settlements from 2012-2013 $ 470,000

$ -

$ -

One-Time Expense for Professional Development $ - $ 125,000

$ -

One-Time Expense for Math and Language Arts Textbooks $ 550,000 $ 200,000

$ -

Additional Expense for Deferred Maintenance Plan $ 500,000

$ -

$ -

Beginning Balance $ 7,928,488 $ 2,895,072 $ 962,400 Ending Bal. $ 2,895,072 $ 962,400 $ (2,582,816)** $1,716,708 from Restricted Programs, $1,564,137 Site and Departments

Assumptions for Multi-YearRevenue

2015-2016 a 20.68% Gap funding to the LCFF increase Based upon the Department of Finance projections

2016-2017 a 8.2% Gap funding to the LCFF increase Based upon School Services of California recommendations

Continued declining enrollment is factored into the LCFF A lower than expected decline in student enrollment is

factored in all the years However, drop of 70 next year for the funded ADA of 2016-

2017 is assumed

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Assumptions for Multi-YearOne-Time revenues, such as Mandated Costs

and Out-of-Home beds, are not included RUSD will receive significantly smaller amount of

Out-of-Home beds in the future

ExpensesThe assumption is that all the carryover dollars

are spent in their entirety The expenses dramatically drop Backing out of other one-time expenses

The expenses from the June 2012 settlement Textbooks dropping to $200,000 and then to zero

Assumptions for Multi-YearExpenses

Increase in healthcare costs at 10% each yearStep & Column salary increases at 2% per yearSavings from the new District copier lease

agreementGeneral Fund contribution to the payment of

Certificates of Participation at $1.68 and $1.76 million These will be adjusted in those years as developer

fees are realized

Points to PonderA qualified vs. a positive budget certification

Any budget needs to be based upon sound and reasonable assumptions

Elimination of deficit spendingNew one-time projectsGovernor’s 2015-2016 Budget proposal in

January

  2014-2015 2015-2016 2016-2017

Current Yr. Revenues $ 48,645,308 $ 48,839,437 $ 50,520,169 Current Yr. On-Going Expenses $ 47,452,879 $ 48,686,728 $ 50,516,343 Deficit/Surplus $ 1,192,429 $ 152,709 $ 3,826 COP Payment From General Fund $ 1,425,000 $ 1,660,381 $ 1,735,494

One-time Expense from Carryover** $ 3,280,845

$ -

$ -

One-Time Expense for Employee Settlements from 2012-2013

$ 470,000 $ -

$ -

One-Time Expense for Professional Development

$ -

  $ -

One-Time Expense for Math and Language Arts Textbooks $ 550,000  

$ -

Additional Expense for Deferred Maintenance Plan  

$ -

$ -

Beginning Balance $ 7,928,488 $ 3,395,072 $ 1,887,400 Ending Bal. $ 3,395,072 $ 1,887,400 $ 155,732 ** $1,716,708 from Restricted Programs, $1,564,137 Site and Departments

Changed Assumptions Revenues in 2016-2017 are based upon State

Department of Finance Changes assumption of GAP funding to LCFF

from a 8.2% to 25.48%One-Time expenses of Deferred Maintenance

plan in 2014-2015, and one-time expenses of textbooks and Professional Development in 2015-2016 have been eliminated

Assumes slightly more developers fee revenues in the next two years

Assumes a reduction of expenses for utilities

Alternative Multi-YearBoth scenarios are based upon sound

assumptionsBoth School Services of California and

Department of Finance are credible sources of information

Developer Fee revenues have been greater than anticipated the last two years, and potential housing construction projects are inline to support this increase of revenues

Training and planning have begun to continue the savings from utilities

Board OptionsMust have approval of an Interim Budget

Adoption of current budget and multi-year plan A qualified budget

Adoption of the alternative budget and multi-year plan A positive budget

Consideration of new assumptions before adopting

What is NextGovernor Brown’s January Budget

What are the Governor’s priorities for current year’s increase in State revenues

Increase to LCFFMore one-time projects such as mandated

costs, common coreNew programs such as expanded pre-school

Enrollment ProjectionsHelp to determine staffing and revenues

QuestionsQuestions?

Comments?

Concerns?

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