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Budget Adoption 2012-2013Ramona Unified School DistrictJune 7, 2012Opening CommentsRamona Unified is facing an unprecedented financial crisisProjected ending fund balance below or at 0%A cash crisis may occur which would result in a state loan unless this scenario changes2012-2013 July 1st NumbersRevenues$42,219,398Expenses$47,887,523Difference (structural imbalance)($ 5,668,125)Projected Beginning Balance$ 4,232,257 (June 30, 2012)Ending Balance($ 1,349,867)(Projected for June 30, 2013)

Fund 17, Special Reserve Fund, houses the 3% reserve -- or $1,490,000 -- which is not reflected in the above number or in the multi-year projectionsStructural ProblemProjected ending balance is ($1,349,867)The lack of ongoing revenues, plus the inability to reduce ongoing expenditures fast enough, has created the structural imbalance($5,668,398) is the projected structural deficitThis imbalance is projected to increase each year as revenue increases are unable to keep pace with increases in expendituresThus, each year without a permanent solution creates a larger financial problemLoss of RevenuesCurrent year revenues are $46.5 million and next year projected revenues drop to $42.2 millionIn 2007-2008 revenues were $55 millionIn 2008-2009 revenues increased to $56.4 millionIn 2008-2009, $4.87 million in revenues came from the Federal stimulus, or ARRAIn 2010-2011, $1.2 million in additional Federal dollars came from the Jobs Bill Projections Are Based Upon AssumptionsAssumptions are used for key measures Based upon past history, trends, proposed legislationBased upon direction from SDCOE, advice from School Services of California, Inc., and information from Legislative Analysts Office, etc.Assumptions are used in our formulasThe formulas with the assumptions results in the projectionsAs assumptions change, projections changeAssumptions For 2012-2013A key assumption is that the new taxes to be voted on in November will not be approvedA reduction to Ramona of $441 per ADA, or $2.5 million, is includedEven with successful passage of the tax measure, the structural budget imbalance will not be solvedAssumptions For 2012-2013RevenueCurrent year P-2 ADA for revenue limitNo COLA increase Transportation is fully funded, but flexibleCategorical flexibility is part of the weighted student formula (funding same for 12-13 due to hold harmless)K-3 class size penalties is flexible with new funding formulaExpenses10% increase in health benefitsServicing all salary schedulesSavings from classified and certificated layoffsSavings from retireesAssuming dollars budgeted in 2011-2012 are spentMulti-Year Projection2012-132013-142014-15Revenue42,219,39842,431,48742,678,214Expenses47,887,52349,910,77852,532,990Difference (5,668,125) (7,479,291) (9,854,776)Transfer fromReserve Fund 86,000 86,000 86,000 Beg. Balance 4,232,258(1,349,867) (8,743,158)Ending Balance(1,349,867) (8,743,158) (18,511,934)9Reductions That Have Already Been MadeThis projection is based on factoring in the following actions and scenariosReduction of funding and carryover for sites and departmentsLayoff of classified staff membersLayoff of certificated staff membersElimination of positions through retirement or resignationThree unpaid furlough days for all classified and administrative employeesReduction of high school summer school programBuy-up option for administrative employees who choose Health NetIncrease in student bus feesOther reductions, transfers, and flexibility

Reductions That Have Not Yet Been MadeEmployee Concessions for 2012-2013AdministratorsTeachersClassified EmployeesCash For 2011-2012Ramona will not have sufficient cash in the General Fund to meet payroll for June 30, 2012On May 31, after payroll, only $88,000 of cash remains in the General FundInternal borrowing will be just enough to meet June 30, 2012 payroll

Cash For 2012-2013With current projections, RUSD will NOT have enough cash to meet June 30, 2013 obligationsDollars in other funds will not be sufficient to meet demandsWith the passage of AB 103, Ramona does not qualify for a Tax and Revenue Anticipation Note (TRAN)A Temporary Transfer Agreement is being sought to ease the districts cash flow issues (see Agenda item B-7)At this time, unsure if the loan from San Diego County will occurEven if it does occur, staff is uncertain if this loan will solve the June 30, 2013 cash shortfallCash For 2013-2014In 2013-2014, Ramona will not have enough cash to meet its obligations, nor will it have the ability to borrow the cashWith current projections, Ramona Unified is, at most, 12 months away from a NEGATIVE certificationCash Flow Projections Before AB 103JulyAugustSeptemberOctoberNovemberDecemberBeginning Cash1 1,469,541 3,051,794 2,216,849 (1,906,094)(3,325,285)Total Revenues271,408 498,191 3,391,194 494,727 3,031,184 7,456,284 Total Disbursements1,438,708 1,713,441 4,462,354 4,868,087 4,531,683 4,370,961 Excess (Deficiency)(1,167,300)(1,215,250)(1,071,160)(4,373,360)(1,500,499)3,085,323 Total Changes to Balance Sheet Accounts2,636,840 2,797,503 236,215 250,417 81,308 146,555 Net Cash in Hand1,469,540 1,582,253 (834,945)(4,122,943)(1,419,191)3,231,878 Ending Cash in County Treasury1,469,541 3,051,794 2,216,849 (1,906,094)(3,325,285)(93,407)Cash Flow Projections Before AB 103JanuaryFebruaryMarchAprilMayJuneBeginning Cash(93,407)3,297,048 750,650 (2,120,837)(1,222,399)(3,128,995)Total Revenues7,683,663 1,866,318 1,428,092 5,361,022 2,512,029 2,216,396 Total Disbursements4,293,208 4,412,716 4,299,579 4,462,584 4,418,625 4,256,833 Excess (Deficiency)3,390,455 (2,546,398)(2,871,487)898,438 (1,906,596)(2,040,437)Total Changes to Balance Sheet Accounts0 0 0 0 0 0 Net Change in Cash3,390,455 (2,546,398)(2,871,487)898,438 (1,906,596)(2,040,437)Ending Cash in County Treasury3,297,048 750,650 (2,120,837)(1,222,399)(3,128,995)(5,169,432)Cash Flow Projections After AB 103JulyAugustSeptemberOctoberNovemberDecemberBeginning Cash1 991,506 2,620,180 1,088,387 (2,521,098)(4,081,149)Total Revenues(206,627)544,612 2,694,346 1,008,185 2,890,324 6,750,364 Total Disbursements1,438,708 1,713,441 4,462,354 4,868,087 4,531,683 4,370,961 Excess (Deficiency)(1,645,335)(1,168,829)(1,768,008)(3,859,902)(1,641,359)2,379,403 Total Changes to Balance Sheet Accounts2,636,840 2,797,503 236,215 250,417 81,308 146,555 Net Cash in Hand991,505 1,628,674 (1,531,793)(3,609,485)(1,560,051)2,525,958 Ending Cash in County Treasury991,506 2,620,180 1,088,387 (2,521,098)(4,081,149)(1,555,191)Cash Flow Projections After AB 103JanuaryFebruaryMarchAprilMayJuneBeginning Cash(1,555,191)(195,506)(2,576,347)(5,331,279)(3,657,211)(5,523,465)Total Revenues5,652,893 2,031,875 1,544,647 6,136,652 2,552,371 2,571,030 Total Disbursements4,293,208 4,412,716 4,299,579 4,462,584 4,418,625 4,256,833 Excess (Deficiency)13,597,685 (2,380,841)(2,754,932)1,674,068 (1,866,254)(1,685,803)Total Changes to Balance Sheet Accounts0 0 0 0 0 0 Net Change in Cash 1,359,685 (2,380,841)(2,754,932)1,674,068 (1,866,254)(1,685,803)Ending Cash in County Treasury(195,506)(2,576,347)(5,331,279)(3,657,211)(5,523,465)(7,209,268)ConclusionUnder the current scenario, Ramona Unified is facing a financial crisisConcessions from employees is clearly the only way outWhat Is Next?Many changes can occur at the StateActual adoption of the State budgetOn time in June?What will the outcome be for initiatives such as weighted student formula or the transitional kindergarten programWhat will be the reduction to revenues if the November ballot failsWhat Is Next?November ballot measureWill it pass?What happens if it does not pass?Closes the presentation prior to the Public HearingItem B-6, the Governing Board may ask questions and hear comments from San Diego County Office of Education