Devin Vodicka, EdD

Assistant Superintendent, Business Services

March 14, 2012

3/9/2012 1

First Interim presented in December 2011

First Interim represented Financial Condition through October 31, 2011

Second Interim represents Financial Condition through January 31, 2012

Reflects updated estimates of revenues, expenditures, and ending balance components for current fiscal year.

Background Information

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CUSD remains “qualified” as we are able to meet

current financial commitments for the remainder of this fiscal year but not for the two subsequent years

Projected deficits:

2012-13: $5 million

2013-14: $10.3 million

Current Information

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Additional $367,000 in donations, 6th grade camp

funds, Lancer Jacks staff reimbursement

Additional $95,000 in insurance claim reimbursement

Additional $651,000 in 2012-13 through NCCSE Equalization and $1.3 million in 2013-14.

Major Changes: Revenues

3/9/2012 4

Reduction of $500,000 in site and department

operational budgets

Reclassification of $400,000 of deferred maintenance expenses to various Community Facility District and State School Construction funds.

Blue Shield “credits” applied, including reserve of $370,799 for 2012-13

Major Changes: Expenditures

3/9/2012 5

Notices to all management, confidential, and

supervisory employees of potential salary reductions and/or work day reductions for 2012-13

Layoff notices to over 100 teachers

Major Changes: Expenditures

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2011-12

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2012-13

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Local Property Taxes: No change made to projection of

$60,683,436. Flat growth estimated for FY 2012-13 and 1% growth estimated for FY 2013-14.

Redevelopment Agency Funds: With successful passage of ABX1 27, redevelopment agencies have been dissolved and agency funds will now support local schools and other agencies. Though the California Department of Education (CDE) projects district will receive over $900,000 in redevelopment funds this fiscal year, final figures will not be known until outstanding debt against these monies is reported by cities. Thus, district is not recognizing these funds at this time.

Important Assumptions

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Basic Aid “Fair Share” Reduction: Implementation of SB 81

increased the Basic Aid “Fair Share” reduction by 0.65%, resulting in a total cut of 9.57% projected for FY 2012-13.

State Funding Proposals: The Governor’s Budget proposal for FY 2012-13 includes a new weighted student funding formula that may negatively impact the District. As a Basic Aid District, Carlsbad Unified is not on the list and thus, may lose most of its State funding. Furthermore, it is projected that districts across the state may lose up to $455/ADA if the November initiative proposed by Governor in his budget does not pass. Consultants from the California Department of Education have advised us that Basic Aid districts are likely to be impacted by these adjustments in FY 2013-14. Consequently, the District has reduced its State funding budget for 2013-14 to only include lottery funds and the constitutional requirement that state provide at least $120 per ADA to each district.

Additional Assumptions

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How Did We Get Here?

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3/9/2012 12

CUSD Revenue, Expenditures, and Reserves

2006 2007 2008 2009 2010 2011 Mar-12 Proj 2013

Reserve $7,290,197. $9,709,801. $13,011,027 $18,462,237 $16,712,892 $15,047,689 $7,618,524. $3,449,089.

Revenue $71,585,198 $81,515,019 $86,090,419 $86,346,873 $85,934,756 $82,598,872 $73,881,246 $71,630,806

Expenditures $72,003,526 $78,516,236 $81,547,117 $83,895,662 $87,684,101 $84,264,075 $81,310,411 $75,800,241

$-

$10,000,000.00

$20,000,000.00

$30,000,000.00

$40,000,000.00

$50,000,000.00

$60,000,000.00

$70,000,000.00

$80,000,000.00

$90,000,000.00

$100,000,000.00

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Revenues

2006 2007 2008 2009 2010* 2011 Mar-122013Proj

2014Proj

Transfers/Other $1,302,615 $- $28,420.00 $- $1,823,248 $2,416,917 $400,314.0 $-

Other Local $7,362,500 $7,858,977 $8,777,946 $9,004,226 $7,614,831 $6,570,459 $4,760,310 $4,335,612 $5,015,484

Other State $9,071,549 $14,134,27 $12,767,88 $10,164,26 $8,563,081 $7,270,847 $4,583,752 $3,272,094 $2,673,769

Federal Revenue $3,267,208 $2,974,965 $2,870,708 $4,147,599 $6,050,813 $4,963,121 $3,146,623 $3,033,005 $3,063,335

State Aid/Other Revenue Limit $4,908,043 $6,977,531 $606,970.0 $309,159.0 $246,497.0 $284,770.0 $306,811.0 $306,659.0 $321,520.0

Property Tax/Revenue Limit $46,975,89 $49,569,26 $61,066,91 $64,201,01 $63,156,89 $61,092,75 $60,683,43 $60,683,43 $61,290,26

$-

$10,000,000.00

$20,000,000.00

$30,000,000.00

$40,000,000.00

$50,000,000.00

$60,000,000.00

$70,000,000.00

$80,000,000.00

$90,000,000.00

$100,000,000.00

Expenditure Reductions: June 2011

Increasing class size in grades 1-3 to approximately 32 students in each class.

Eliminating K-6 Home Study program. Eliminating one Director of Curriculum & Instruction position. Eliminating the Administrative Assistant—Language Assessment

Center position. Eliminating one English Language Development Resource Teacher. Leaving vacant two Instructional Aide—Computer Lab positions. Elimination of general education summer school (K-8) and

reduction of general education summer school (high school). Eliminating two part-time certificated librarians. Leaving vacant the position of Executive Assistant, Business

Services. Reducing deferred maintenance contributions.

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Expenditure Reductions: November 2011

Reduce start-up spending in 2012-13 for Sage Creek High School

Reduce Administration/Management expenses Reduction in Travel and Conference budgets Reduction in Site/Department accounts Reduction in Special Education budget based on program

savings Elimination of Classified positions Reduction in Athletics budget Reduction or elimination of programs such as Cal-SAFE

and Add-Up

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Expenditure Reductions: February 2012

A Reduce CVA by 3.0 Full-Time Equivalent (FTE) Teachers

B Increase staffing ratio at CHS to 38.5

C Increase staffing ratio in grades 4-8 to 36 in 2013-14

D Eliminate 1.0 Librarian

E Eliminate 1.0 Teacher On Special Assignment (TOSA)

F Eliminate 1.4 .4 FTE Psychologists

G Eliminate CHS Special Ed Teachers TBD

H Eliminate Guidance Technicians

I Reduce K-5 Library Technicians to .5 FTE

J Reduce Student Services Specialist to .5 FTE

K Eliminate 1.0 FTE Admin Assistant, Special Education

L Eliminate 1.0 FTE Office Assistant, Personnel Services

M Eliminate 1.0 FTE Executive Assistant, Business Services

N Eliminate 1.0 FTE Custodian

O Reduce Tier III Certificated Non-instructional Hourly

P Reduce Personnel Commission Discretionary Budget

Q Reduce School Resource Officer Contract

R Reduce Write4Fun Contractual by 50% 25%

S Eliminate Kontraband Contract

T Reduce Sage Creek Expenditures in 2013-14

U Eliminate Instructional Assistants—Computer Lab and add 1.0 FTE Computer Tech Position 3/9/2012 16

Data from

http://www.ed-data.k12.ca.us

Most recent data available is from 2009-10

San Diego County: Revenue Per Student Comparison

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Average Daily Enrollment

2009 2010 2011 Adopted 2012

ADA 10317 10417 10593 10596

9000

9200

9400

9600

9800

10000

10200

10400

10600

10800

11000

AD

A

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This reflects projected expenses after implementation

of $5 million in expenditure reductions

Sage Creek Expenses 2012-13

Sage Creek, $293,866.00

Other Expenditures, $70,453,551

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Pie Chart Expenses 2011-12

48%

14%

21%

3%

13%

0% 1%

CUSD Expenditures 2011-12 Second Interim 3-8-12

Certificated Salaries

Classified Salaries

Employee Benefits

Books & Supplies

Services/Other Oper. Expenditures

Capital Outlay

Other Outgo & Debt Service

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Bubble Expenses 2012-13

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Treemap Expenses 2012-13

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Projected Revenue in 2012-13: $71.6 million Projected Expenditures in 2012-13 (after $5 million in necessary cuts): $75.8

million

Why is the 2013-14 deficit projected at $10.3 million? Projected Deficit of $5 million in 2012-13 Deficit Spending of $4.2 million in 2012-13 after necessary cuts are made Projected decline of $1.3 million in State Funding in 2013-14 due to November

Election “Trigger” and Weighted Student Funding model implementation Additional Sage Creek expenses of approximately $1.4 million Expenditure Reduction of approximately $930k due to approved increase in

class sizes in grades 4-8 Additional NCCSE Revenue of $650k

Implication: Ongoing, not one-time, solutions are necessary

Deficit Spending Problem

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Resolve $5 million deficit for 2012-13 Collective Bargaining Wages

Benefits

Retiree Benefits

School Closures

Revenue Enhancements

“Safety Net” would require implementation of teacher layoff notices and further increases in class size

What Now?

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It is respectfully recommended that the Board of

Trustees approve submission of the Second Interim Report with certification of “qualified” financial condition, as presented.

Recommendation

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