2010 Budget Information UpdateArcadia Unified School District

April 1, 2010

Summary of 2010 Budget Deficit and Impact on Education

Governor’s January 2010 Budget Proposal

Roughly $20 billion deficit in state budget through 2010-2011.

While Governor says budget protects education it in fact reduces K-12 education under Proposition 98 support from current-year levels by $1.9 billion

Governor proposes to make up a big part of the $20 billion deficit by asking the federal government for about $7 billion dollars – no one believes he will get anything close to this amount – means things will get worse in the May 2010 revise

Summary of 2010 Budget Deficit and Impact on Education

Governor’s January 2010 Budget Proposal

Governor’s proposal manipulates Proposition 98 – Legislative Analysts Office says it would be better to suspend 98 (this requires 2/3 vote of legislature)

Legislature made some attempts to close budget gap – Governor signed bills related to additional deferrals to K-12, but vetoed other actions – nothing more will happen at the state level till the May Revise

LAO Report - http://www.lao.ca.gov/analysis/2010/education/ed_anl10.pdf

Summary of 2010 Budget Deficit and Impact on Arcadia USD

If the Governor’s 2010 proposals are implemented:

About $200 per student reduction to revenue limit

$28 per student reduction from negative cola

Unsure of additional reductions to categorical programs and affect on flexibilities (e.g. ability to use certain categorical funds for general fund purposes and relaxed penalty structure for K-3 class size reduction)

County has advised us not to include the 2011-12, or 2012-13 COLAs in our upcoming three-year budget submissions – this equates to an additional reduction over the next three years we have to account for

The total deficit to us over three years (2008-2011) is 18.6 percent (means we have close to 20 % less revenue now than we did in the 2007-2008 school year

Summary of 2010 Budget Deficit and Impact on Arcadia USD

Other factors that affect our budget:

Increased expenses such as step and column, energy costs, supplies, contracted services, etc.

Declining enrollment – over the last three years we have lost about 100 students per year and project this decline to continue for at least the next two years

Funding Cliff – we received about 3 million dollars in Federal ARRA funds – these funds were one time money and end next year. We either have to eliminate programs or make up the difference from existing funds

We have been advised to project at least an additional $50 per student reduction to the revenue limit in the May Revise (so a total revenue limit reduction next year of $200 + $28 + $50 = $278)

Our goal will be to maintain at least a 4% reserve at the end of 2012-2013

Summary of 2010 Budget Deficit and Impact on Arcadia USD

What this specifically means for AUSD:

About an additional $4.2 million ongoing reduction

No mid-year cuts for 2009-2010

No Layoff of Certificated Probationary and Permanent Staff 2010-11

Increase 1st – 3rd grade class sizes to 22:1 next year, and 24:1 in 2012-13

Four temporary teachers will not be rehired

Four vacancies resulting from the early retirement incentive program will not be refilled

In order to balance the budget additional vacancies from the early retirement program may not be filled – we don’t know which ones and how many at this point in time

Summary of 2010 Budget Deficit and Impact on Arcadia USD

What this specifically means for AUSD:

Additional temporary teachers may not be rehired because of declining enrollment – we will notify those affected as soon as we know

The Board of Education has agreed to use more reserves and designated dollars (including monies in the Retiree Benefit Fund) to offset reductions

These are one-time monies and once used the deficits they are filling will still need to be taken care and may result in additional reductions in the future

We are exploring options for reinstating some of the concessions made by staff last year (including the 1.25 % salary reduction)

Reinstating concessions may result in additional reductions in the future including staff layoffs depending - on the State’s budget and future reductions to our Revenue Limit and categorical programs

Summary of 2010 Budget Deficit and Impact on Arcadia USD

The State has reduced our revenue over the last two years and projects additional reductions next year which resulted in the following to AUSD:

2008-2009: 2.8 Million in Cuts

2009-2010: 4.2 Million in Cuts

2010-2011: 4.2 Million in Cuts (projected)

We have maintained our goal of being among the top school districts in total compensation in Los Angeles County (we are currently third based on LACOE’s salary survey when comparing Salary and Benefits of Teachers with 25 years of experience)

Historical Context

School Year

Salary Increase

2004-2005 3.50%

2005-2006 3.94%

2006-2007 7.00%

2007-2008: 5.5% - .5 to freeze benefit cap for cash back 5.50%

2008-2009 0.00%

2009-2010 -1.25%

Average Last Six Years 3.12%

Salary Increases Last Six Years

Books and Supplies – 4000 Series and Carryover

In June, when the budget is adopted the 4000 series numbers (budget) reflect what is anticipated to be spent in that series (books and supplies) during the upcoming school year

At first Interim (October 30) which occurs after the budget for the previous year is closed the numbers gets significantly higher because it now reflects all of the carryover as well as any additional funds allocated to the school district that we had not received in June (for example last year the Fed. ARRA money)

Money is then transferred out of the carryover (4300) to cover current year expenses as needed (and approved)

Additionally in this current three-year budget (2009 – 2012), we committed large amounts (including but not limited to TIER III flexible program funds) for use to make up our multi-year budget deficit

At second interim (March 2010) 7.4 million dollars was transferred to designations in order to cover the multi-year budget projections (to address the deficits in the budget resulting from state cuts, funding cliffs (end of federal ARRA money), declining enrollment, and increased expenses)

Various 4000 Programs Carryover and Entitlements

School Site Carryover $2,888,738.00

CBET $1,100.00

School Safety $26,000.00

Art/Music Block Grant $6,060.00

CAHSEE $5,000.00

Supplies School site Counsel $6,896.00

Ed Tech Supple Grant $40,151.70

Gate $2,000.00

IMFRP - Textbooks $1,129,976.27

The following shows allocations (entitlements and or carry-over) for selected programs – these dollars are “committed” and therefore not available for use to balance the deficit in our budget:

Various 4000 Programs Carryover and Entitlements

School Library Block Grant $20,000.00

Teacher Credential Block Grant $1,800.00

Art/Music Block Grant 1X $3,760.00

EIA - English Learners $5,000.00

ELAP $560.00

Home to School Trans $38,083.00

IDEA Preschool $7,000.00

Restricted Lottery $185,000.00

Routine Repair Maintenance $706,000.00

School Based Management $1,000.00

Sp Ed Staff Dev $628.89

SP Ed AB602 $39,110.00

STAR - Testing $520.00

Federal Programs, Title I, II and IV $33,791.00

Various 4000 Programs Carryover and Entitlements

AEF Fundraising, Mini Grants, Script, etc. $660,561.00

All Weather Track $51,720.00

Arcadia Invitational Track Meet $190,500.00

At & t $14,187.00

Auditorium Music $25,040.00

Baseball Field Replace $2,258.00

Booster Clubs Fund Raising $173,557.00

Bus Replacement $545,668.00

Equipment Replace $37,486.00

Foothill Ed Tech $4,598.00

Gift Offers $15,775.00

Various 4000 Programs Carryover and Entitlements

Instrument Use Fee $74,879.00

PTA $12,329.00

Rotary $1,464.00

Sports field Replace $12,647.00

Student Activities $7,844.00

Tech Use Fee $7,214.00

Trading Post $97,338.00

Transportation $64,217.00

2010 Budget Information UpdateArcadia Unified School District

Thank You – We Will Keep You Updated As Things Change and Emerge