Governors Budget Announcement January 12, 2010 Richard Nicoll, Ph.D., Superintendent Bryan Richards, Director, Fiscal Services

State Fully Funds COLA! However, the COLA is NEGATIVE. That means a 0.38% DECREASE in funding; ($24) per ADA (which works out to about ($19.59)/ADA when deficited) or ($636,226) Additionally, we have to subtract the positive COLA previously projected of $848,666 Total effect of negative COLA is $1.5M

One Time Deficit to Continue! This year we have a one-time additional deficit of $ per FUNDED ADA ( actual P-2 ADA) or about $ per current funded ADA Starting next year it will become ongoing and be $201 per current year funded ADA This deficit is to be applied to administrative costs. Unclear how districts such as MDUSD that have already cut administration will be affected by this, nor is administrative defined in the proposal.

Declining Enrollment Steepens! At adoption we projected a decline of ADA At CBEDS we adjusted downward by ADA to a decline of ADA due to enrollment decline At P-1 we are actually down ADA so we have projected the P-2 ADA downward again by an additional ADA We are now down 2.17% from prior year

Funded Revenue Limit vs Graph courtesy of School Services of California, Inc.

K-12 Revenue Limit – MDUSD Mt. Diablo Unified for Base Revenue Limit per ADA (A) Proration Factor (B) Funded Base Revenue Limit (C) = (A) x (B) Base Revenue Limit$6, $5, COLA per ADA261.00–– Base Revenue Limit6, *5, One-Time Reduction ( x 08/09 funded ADA) – 5.Net Funding (C3 minus C4)$4, Dollar Change (Line 5, Column C minus Line 1, Column C) 7. Percentage Change (Line 6, Column C divided by Line 1, Column C) * = (deficit factor) Chart courtesy of School Services of California, Inc.

K-12 Revenue Limits – MDUSD Mt. Diablo Unified for Base Revenue Limit per ADA (A) Proration Factor (B) Funded Base Revenue Limit (C) = (A) x (B) Base Revenue Limit$6, $5, COLA per ADA –– Base Revenue Limit6, *5, Ongoing Administration Cost Reductions – 5.Net Funding (C3 minus C4)$4, Net Funded Revenue Limit (Slide TK Line 5, Column C)4, Dollar Change (Line 5, Column C Minus Line 6, Column C)$ Percentage Change (Line 7, Column C Divided by Line 6, Column C) % * = (deficit factor) Chart courtesy of School Services of California, Inc.

The 10/11 revenue limit cut increases from $1,175 to $1,366/ADA

Piling it on (what has changed since 1 st interim?) Loss of COLA/funding negative COLA $1.5M Additional student attendance decline $0.3M Additional cut of $201/ADA $6.5M Total decline in revenue limit $8.3M Decline in other State revenues $0.3M Total State revenue decline $8.6M Note: All of these cuts are ONGOING

Multi Year Projection Undesignated + Tier 6/10 $13,279,341 Operating Deficit 2010/11 (21,821,373) Adjustment in 2% reserve 26,853 Unappropriated Balance 6/11 ( 8,515,179) Operating Deficit 2011/12 (27,059,026) Adjustment in 2% reserve 67,882 Unappropriated Balance 6/12 ($35,506,323)

$35,506,000 across 2 years is only the start to fixing the real problem Unappropriated Balance 6/12 ($35,506,323) Projected Deficit in 2012/13 ($24,431,947) Unappropriated Balance 6/13 ($59,924,712) Projected Deficit in 2013/14 ($28,170,814) Unappropriated Balance 6/14 ($88,182,084) Projected Deficit in 2014/15 ($27,781,521) Unappropriated Balance 6/15 ($115,933,241) Average deficit is $25,852,936 per year

How much less must we spend? Enrollment declines projected to continue through 2014 at rates between 0.71% and 1.26% per year We must decrease ongoing annual spending by a minimum of $25.85M by 7/1/2010 for the 2010/11 school year OR, Cut at least $35,506,323 over two years by 2 nd interim and plan for even deeper cuts later to solve the rest of the structural deficit. However, the amount of backlog will grow at over $9M per year As promised, the deficits got bigger when the State cut more

What next? More from Sacramento Governors Budget came out January 8 School Services updated dartboard based on the new budget January 12 LAO will issue review of budget to legislature State budget talks begin in legislature

Meanwhile back in Concord… We must adopt a balanced budget by June 30 th Budget Calendar will come to board January 26 th We must plan an additional contingency if the State doesnt fund the COLA when it returns to a positive number in (an additional $3,020,000 ongoing cut)

Thank you and tune in next time for…