Lynwood Unified School District

2011-12 First Interim Financial Report

Board PresentationDecember 13, 2011

Table of Contents

BackgroundKey AssumptionsRevenue Limit Deficit Factor HistoryBase Revenue Limit After Deficit FactorRevenue Limit per ADA – Actual vs. Statutory LevelActual Revenue Limit Funding LossMulti-Year ProjectionsFuture OutlookQuestions

Background

Statutory RequirementAB 1200 - enacted in the early 1990s in response to a number of near bankruptcies, requests for state loans, or defaults on school district obligationsAt least twice a yearDecember 15 and March 15

CertificationsPositive – Will meet financial obligations in the current and subsequent two fiscal yearsQualified – May not meet financial obligations in the current or subsequent two fiscal yearsNegative – Will NOT meet financial obligations in the current or subsequent two fiscal yearsQualified or negative status requires additional reporting (due June 1) until district is “positive” again

Key Assumptions

Average Daily Attendance (ADA)Continued enrollment decline, per law, use higher ADA number from previous year

Revenue Limit COLA – 2.24%Revenue Limit Deficit Factor – 19.754% (increased from 17.963%)Net Revenue Limit Funding Change – 0%Mid-Year Cut - $181 per ADA per Legislative Analyst Office est. (Approx. $2.7 million set-aside)Flat funding in 2012-13, i.e. 0% COLA and deficit factor remains the same (3.1% COLA assumed in Adopted Budget, LACOE and SSC both suggest extreme caution to include the COLA in MYP due to the recent economic developments.)

Revenue Limit Deficit Factor History

B-18

Base Revenue Limit after Deficit Factor

$0$1,000$2,000$3,000$4,000$5,000$6,000$7,000

$6,530

$5,240

$6,530

$1,290

Funded Base

Revenue Limit

Apply the 2011-12 deficit of 19.754% to the undeficited base revenue limit

Funded revenue limit= $6,530 x (1 - 0.19754)= $6,530 x 0.80246= $5,240

Revenue Limit Funding Per ADA – Actual vs.

Statutory Level

2007-08 2008-09 2009-10 2010-11 2011-12$4,700

$5,700

$6,700

$5,821

$6,121

$6,383 $6,387

$6,530

$5,821$5,641

$4,958

$5,240 $5,240

Lynwood Unified School District

Projected Statutory COLAFlat FundingActual Funding

Dolla

rs P

er A

DA

Loss ofbaseline dol-lars

Loss of COLA

State Budget Cuts - Actual Revenue Limit Funding Loss

2008-09 2009-10 2010-11 2011-12

Base Revenue Limit Per ADA 6,120.94$ 6,382.94$ 6,387.10$ 6,530.10$

Funded Base Revenue Limit Per ADA 5,640.81$ 4,958.36$ 5,239.79$ 5,240.14$

Per ADA Funding Loss (480.13)$ (1,424.58)$ (1,147.31)$ (1,289.96)$

Revenue Limit ADA 16,204.10 16,054.89 15,736.00 15,002.00

Total Funding Loss (Ongoing) (7,780,018)$ (22,871,453)$ (18,054,145)$ (19,351,919)$

Multi-Year Projections – Unrestricted General Fund

2011-12 2012-13 2013-14Total Revenues 95,550,367$ 92,970,266$ 94,866,539$

Total Expenditures 80,345,560$ 81,867,599$ 81,328,026$

Other Financing Sources/Uses 15,022,218$ 15,781,662$ 16,573,246$

Operating Surplus/(Deficit) 182,589$ (4,678,995)$ (3,034,733)$

Beginning Fund Balance 14,713,928$ 14,896,517$ 10,217,522$

Ending Fund Balance 14,896,517$ 10,217,522$ 7,182,789$

Other Reserves 3,050,000$ 3,050,000$ 3,050,000$

Reserve for Economic Uncertainties* 11,846,517$ 7,167,522$ 4,132,789$

Future Outlook

State budget structural deficitProjected state budget deficit through 2014-15, will grow without corrective measureGovernor’s proposed tax increase is an uncertainty

The volatility of global economy may negatively impact both the national and state economy recovery . The recovery timeline may be longer, especially for California

Sunset of TIER III programs and other flexibility provisions

Cash Flow – Apportionment Deferral

Declining Enrollment

Growing facility needs

Other needs, textbooks, instructional materials, staffing……

Questions