JEFFERSON SCHOOL DISTRICT 2010-2011 Budget

May Revise The 2010-11 budget includes the following assumptions from the Governor’s May Revise: Statutory COLA of -0.39% ($-58,407) No change to deficit factor – currently 18.355% Continuation of Tier III flexibility for categorical programs through 2012-13, including suspension of deferred maintenance match and instructional materials adoption timelines

May Revise (cont.) K-3 CSR funding penalties remain relaxed through 2011-12 Budget includes two additional teachers in 2012-13 to plan for CSR returning to previous penalty levels. We will review/consider options when we plan for 2012-13 budget

Budget Assumptions as Previously Presented P2 reported ADA of 2433.61 – slight increase over 2nd Interim ADA of 2429.95. (~+$18K) -0.39% COLA (-$58,407) in 10/11 and assumes a 0% COLA in 11/12 & 12/13 No salary or benefit changes through 12/13 Anticipate Lottery revenue of $110 per student unrestricted; $13 Prop 20 (restricted) ~ same lottery revenue as 2009-10 No mandated cost claim revenue anticipated Step & Column of $200K for certificated and $21K for classified. Estimated S&C in the out years based on the actual % of increase at budget (separately estimated for restricted vs. unrestricted) Retiree benefits maintained as they now exist Includes Consumer Price Index adjustment to 4xxx (Materials & Supplies) and 5xxx (Services) object codes of 2.4% for 2011-12 and 2.7% for 2012-13. Includes 5% increase for utilities for each year

Additional Assumptions Decrease of 17% in Title II funding (-$5,800) in 2011-12 forward Worker’s Compensation rate is estimated to increase 10% in 2011-12 and is included in the Multi Year Projection as an increase to statutory benefits Decrease of 0.38% in all categorical revenues

Previously Approved Budget Reductions Includes budget reductions of: $70K – no Deferred Maintenance match $28K – categorical offset for intervention specialists. $54K – revised Cafeteria Fund contribution. $175K – one time additional 1% reduction in Routine Repair and Maintenance contribution $203.7K – Offset of Special Ed expenses to ARRA funds $100K – correction of FICA expense budget $208K – one time sweep of categorical carryover balances $67K – reduction to Class Size Reduction contribution $63K – updated Curriculum coordinator & secretary positions, Intervention Specialist positions percentage charged to EIA (Resource 7090) to use EIA carryover for three years (2010-11 through 2012-13)

Previously Approved Budget Reductions (cont.) $59K – copier contract savings $ 4K – reduced budget for custodial uniform rental/cleaning $11.5K – estimated savings from Supplemental Early Retirement plan (three employees retired and accepted SERP) $30.2K – revised lottery textbook budget. Consumable (workbook) expenses for 2010-11 are estimated to be $94.8K. We are still ‘saving’ since we will not need to purchase textbooks (no adoptions due to flexibility provisions). We re-budgeted the items agreed to be reinstated (field trips, classroom supply budgets and technology) as planned – and still have an ending fund balance of $314,963 in unrestricted lottery money. $208K – one time sweep of categorical carryover balances (completed in 2009-10 which increased 2010-11 start balance)

Additional Budget Reductions/Changes Included in 2010-11 Budget During the budget development process, we identified other opportunities to utilize categorical funds as follows: $46K – budgeted partial expense of Traina Assistant Principal position to ARRA Title I (Resource 3011) one time in 2009-10 (increased Res 0000 beginning balance in 2010-11) $48.6K - revised percentage of position charged to Title I (Resource 3010) for Curriculum coordinator and secretary. 2010-11 forward $20.0K - changed percentage of assistant principal positions to charge 10% of costs to EIA (Resource 7090). 2010-11 forward

Additional Budget Reductions/Changes Included in 2010-11 Budget Also during Budget Development, we identified other reductions appropriate to implement at this time: $30K – reduced budget for water/trash services (2010-11 forward) $25K – reduced budget for electricity/natural gas We will continue to review utilities for additional reductions as our implementation of energy savings items progresses (2010-11 forward) $10K – reduced budget for property & liability insurance premium. Has historically been budgeted a bit ‘high’ so will correct that this year (2010-11 forward)

Year-End Changes We will confirm the following additional changes at year-end $100K – one time sweep of deferred maintenance funds to Unrestricted General Fund Confirm estimated increase to ending fund balance – the difference between budgeted expenses vs. actual expenses. Currently estimate the change to be $250K - $500K. There will also be additional funds in the ending fund balance on the restricted side We will identify and report these amounts in September when Unaudited Actuals is presented to the board.

Contributions Contributions from the general fund (Resource 0000) are estimated to be $1,253,120 as follows: Special Education $707,393 Transportation $115,060 Routine Repair & Maintenance $351,000 K-3 Class Size Reduction $ 47,063 Art & Music Block Grant $ 32,604 Note: The contribution for CSR & Art & Music grant are not included in the total contributions reported in the SACS budget forms, since these resources are now unrestricted.

District Status JESD is positively certified through 2012-13. In 2012-13, we are at zero in the unrestricted ending fund balance (still maintaining the 3% reserve for economic uncertainty, the board designated reserve of $500K and our other designations for lottery, mandated costs and board project carryover. A small adjustment ($569) of the mandated cost designation was required to not be negative

Deficit Spending Currently estimate district deficit spending to be ~$700K annually – net of the ‘gap’ (difference between budgeted expenses and actual expenses which we will continue to narrow as much as possible) Should education funding continue with the current revenue limit reductions, we may need to make decisions regarding 2013-14 forward we hoped to avoid There remain many unknowns -

Next Steps Will provide an update on historical budget reductions at August board meeting. 2009-10 will be closed in August, 2010, and Unaudited Actuals will be presented to the board in September. This will confirm our ending fund balance, carryover, etc. We will continue to be careful with our spending; monitor budget issues and report to the board frequently in 2010-11 Dana and Mindy will hold budget update meetings at all sites as well as a public meeting in late Fall, 2010.