Overview of the State Budgetand the State Economy

Overview of the State Budgetand the State Economy

Recovery Takes a Long Time

The Economic Cycle

Stabilization

December2007

Spring2010

2015

RecessionRecovery

B-11

Forecast

Governor’s Budget 2010-11

For the current year, 2009-10, the Governor’s January Budget proposes no change in revenue limit funding, with the deficit factor remaining at 18.355%

In 2010-11, the statutory cost of living adjustment (COLA) is negative 0.38% and is fully “funded”

The deficit factor of 18.355% remains unchanged in the 2010-11 budget

In addition to the negative COLA and the continuation of the 18.355% deficit factor, the Governor’s Budget proposes an ongoing targeted cut of $1.5 billion in 2010-11

$1.2 billion is aimed at “school district administrative costs”

$300 million assumed to follow from the “elimination of administrative costs” via contracting out language

The Governor’s budget provides no specifics on how this will be implemented

Budget Year Adjustments – Revenue Limit COLA

2009-10 fiscal year – no further cuts proposed

2010-11 fiscal year – “fully-funded” COLA; however, the COLA is -0.38%

This is looking like another unusual year for calculations

The funded rates for 2010-11:

C-10

District Type2010-11 Statutory COLA

<0.38%>

All Elementary Districts <$23>

All High School Districts <$28>

All Unified Districts <$24>

Administrative Cuts and Efficiencies

The Governor proposes cutting a total of $1.5 billion targeted as “noninstructional,” or administrative costs at school districts and COEs

$1.2 billion ongoing reduction to revenue limit funded targeted at school district central administration and $300 million attributable to eliminating barriers related to contracting out for services

This would apply to all districts, regardless of the current level of administrative spending or cuts made prior to 2010-11 Monitoring would occur through review of reported Standardized Account Code Structure (SACS) dataThe Governor has yet to share the specifics of the proposal, but if the cut were to apply based on current revenue limit rates per ADA, it would be as follows:

C-12

Elementary High School Unified$191 $231 $201

Undeficited Revenue Limit – Example

2007-08 2008-09 2009-10 2010-11$5,000

$5,100

$5,200

$5,300

$5,400

$5,500

$5,600

$5,700

$5,800

$5,900

$6,000

$6,100

$6,200 Ocean View School District

2007-08 Funded Base Revenue

Limit

$315COLA

$315COLA

$250COLA$5,838

$6,088

$5,523

2007-08 Funded Base Revenue

Limit

2007-08 Funded Base Revenue

Limit

2007-08 Funded Base Revenue

Limit

$315COLA

$250COLA

$6,065*

2-8

* 10-11 includes a -$23 COLA

Projected vs. Actual Funding Per ADAB-16

Average Unified District

$5,523

$5,838$6,088 $6,065

$4,761$4,718*

$5,380$5,523

$4,000

$5,000

$6,000

$7,000

2007-08 2008-09 2009-10 2010-11

Dol

lars

Per

AD

A

Projected Statutory COLA

Flat Funding

Actual Funding

Loss of COLA

Loss of baseline dollars

How Much?

The Governor’s proposal is anticipated to impact OVSD by:

Fully funded -0.38% COLA x Projected 10-11 ADA-$23 x 2412 = -$55,476

Proposed “central administration reduction”-$191 x 2412 = -$460,692

TOTAL ADDITIONAL LOSS Above 1st Interim Projections = -$516,168

B-16

Next Steps

Balanced budget must be adopted by district prior to June 30, 2010

State Budget will most likely not be in place by then

Developing the budget requires:

Clarifying assumptions

How much revenue?

How will expenditures change?

Once the State Budget is adopted, the district makes adjustments to its budget within 45 days

What have we done so far?

BUDGET

3 years ago began monitoring budget needs in anticipation of state’s economic disaster

Reduced department expenditures

Utilized categorical flexibility

Supplies review and reduction

Continued monitoring of class sizes

Monitored benefit costs

Reduced conference & travel costs

Continued monitoring of enrollment, class sizes, staffing needs

What have we done so far?

PERSONNNEL

Vacant classified positions

Grounds/Maintenance position

Custodian position

Account Technician

Bus Driver

Reduced DO certificated Resource Teacher

08-09 Certificated Retirement Incentive (10 participants)

Replaced 3 of 10 vacancies

1 administrative salary reduction day in 08-09

Moved personnel costs to categorical funding as allowable

Utilized one-time ARRA $ to save jobs

INSTRUCTION / INTERVENTION

Continued monitoring of class sizes

Reduced “block scheduling” at OVJH

Reduced “push-in” teachers

Reduced/eliminated after school intervention programs

Reduced district-wide staff development costs

Eliminated Summer School except for Special Education

Eliminated CBET program

What have we done so far?

TRANSPORTATION

Eliminated 12 transportation routes

Increased walking distance

Reduced number of bus stops

Adjusted MVS & LVS school boundaries

REVIEWED CONTRACTS

New copy machines (40% cost savings)

AT&T Phone Service versus VOIP

Implemented Infinite Campus SIS and POS

Monitored and reduced utility costs

Auto shutdown of computers and copiers

Summer shutdown

Implemented 4/10 summer work schedule

ATTENDANCE

Implemented Saturday School to recoup lost ADA

Increased attendance monitoring

Site attendance incentives

What are the other districts doing?

Ventura CountyAcross the State

Cash is King!

A review of our CASH FLOW.

Questions?