Cambrian School District First Interim Report December 8, 2011 Presented by: Don Fox Interim CFO

First Interim Report ● School boards are required to certify the projected year end and subsequent years’ financial condition twice a year ■ Known as Interim Reports ● The First Interim is a snapshot of the District’s financial position as of October 31, 2011 ● Included in this report is a multiyear projection for fiscal years and

Revenue Changes from Adopted Budget to First Interim Report Rev. Limit $ 226,883 Federal 45,970 Other State 745,778 Other Local Total $ 981,456 General Fund Revenue Changes from Adopted Budget to First Interim Report 2

Expenditure Changes from Adopted Budget to First Interim Report 3 1xxx $ 759,157 2xxx 72,584 3xxx 150,087 4xxx 574,162 5xxx 224,863 6xxx 0 7xxx 0 Total $ 1,780,853

Budget Assumptions and Multiyear Projections ● : 2.24% revenue limit COLA with ongoing % deficit ● : 3.10% revenue limit COLA* with ongoing % deficit ● : 2.80% revenue limit COLA* with ongoing % deficit ● From to : Revenues in other state and federal funding remains “flat” – no COLA applied ● ADA projected to be static in “out” years ● One-time federal funding is exhausted in ● Deficit spending is projected in due to reversion of penalties for Class Size Reduction and collective bargaining agreement changes 4 *Based on State’s ability to fund

Multiyear Projections – Many “Moving Parts” Current Year Current Year Plus Current Year Plus State’s Structural Budget Deficit State Budget “Trigger”pulled Federal Jobs Dollars State Budget Uncertainty Remains No Furlough Days State Budget Unceretainty 5

Certification of Financial Condition ● The recommendation from staff to the Board is to approve the First Interim Report as submitted ■ Positive Certification  This means that based upon current assumptions and projections the District will meet its financial obligations for the current fiscal year and subsequent two fiscal years 6

Ongoing State Budget Concerns ● The current State Budget assumed dramatically improved revenues. ● Revenues have fallen short and as a result it appears that the trigger mechanism defined in the budget compromise will certainly be pulled. ● Most experts doubt that the trigger cuts will ultimately be as are currently statutorily defined, but what??? ● First preview will likely be in conjunction with the release of the Governor’s proposed budget in January. 7

Cautions About the State Budget ● How should we treat this Budget? ■ The recommendation from financial experts is:  Include a provision for midyear revenue cuts in the current year.  Reevaluate in January in the context of the Governor’s Budget Proposal for  Assuming no legislative solution in the interim, the Governor’s May Budget Revision next spring, will be the next important peek at what the future may hold..  The State Budget solution is ultimately more a matter of politics than sound economics 8

Questions ● Questions?