1. every student. every classroom. every day. January 30, 2008 The Financial Impact to the Oakland Unified School District

2. every student. every classroom. every day. 2 Agenda Governor’s 2008-09 Budget Proposal Impact on 2007-08 Budget Implications for 2008-09 Budget Development Effect on state categorical funding in 2008-09 Other program impact and flexibilities

3. every student. every classroom. every day. 3 Governor’s 2007-08 Proposition 98 Minimum Guarantee Reduction  Proposition 98 is the basis by which all California school districts receive their unrestricted, General Purpose dollars.  Reduced state tax revenues forecast allows 2007- 08 Proposition 98 guarantee to be reduced by $1.4 billion  Governor proposes to cut only $400 million; anticipates that amount can come from 2007-08 categorical ending fund balances.

4. every student. every classroom. every day. 4 Governor’s 2007-08 Proposition 98 Minimum Guarantee Reduction (Cont.)  As a safe guard all districts are currently required to plan for a current year revenue limit decrease of.5 of 1%.  The effect on OUSD’s 2007-08 revenue limit will be a reduction amount of $1.067 million.  Based on the current proposal, all unexpended OUSD 2007-08 state categorical funds will be confiscated by the state Department of Finance.

5. every student. every classroom. every day. 5 Governor’s Proposed 2008-09 Suspension of Proposition 98  Reduces K-12 education revenue by $4 billion. The budgeted 2008-09 4.94% COLA Revenue Limit increase becomes a (2.40%) Revenue Limit deficit.  For OUSD in 2008-09 this means a total reduction in unrestricted, General Purpose dollars of $15.66M. 4.94% Inflation Increase $6,037 per ADA

6. every student. every classroom. every day. 6 Governor’s 2008-09 Budget Proposal: Categorical Programs  On average, every state categorical programs will be reduced by 6.5%.  For OUSD in 2008-09 this means total state categorical funds will be reduced from $103.4M to $96.6M. A total approximate reduction of $6.7 million.

7. every student. every classroom. every day. 7 Governor’s 2008-09 Budget Proposal: Other Programs  Cuts to state Special Education funding will have a dramatic effect on the District’s current $15M encroachment.  Because of OUSD’s SELPA designation a special analysis will have to be completed. District is working with ACOE to determine the potential financial impact.  Adult Education is projected to have a net (3.46%) reduction from 2007-08 base funding.  Regional Occupation Program is projected to have a net (5.41%) reduction from 2007-08 base funding.

8. every student. every classroom. every day. 8 Governor’s 2008-09 Budget Proposal: Other Programs (cont.)  Child Development programs should anticipate getting less in 2008-09 than received in 2007-08. Specific impact on OUSD has not been determined because of uncertainty in state program reductions.  Child Nutrition programs will have state meal reimbursements reduced by 2 cents per meal.  Instructional Materials will be reduced by 6.5% from the 2007-08 budget. This will have a major impact on textbook adoption purchases.

9. every student. every classroom. every day. 9 Governor’s 2008-09 Budget Proposal: Facilities and Cash Flow  A new state facility bond is proposed to be on the November 2008 ballot (AB100 sponsored by Mullin). In the bond $9.087B, which earmarks $6.4B for K-12 facilities.  Currently the June ADA apportionment is paid in July. The Governor proposes to move the July payment to September. The District is exploring opportunity to obtain a July 1 st Tax & Revenue Anticipation Note (TRAN).

10. every student. every classroom. every day. 10 Governor’s 2008-09 Budget Proposal: Categorical and Program Flexibilities  Budget proposal includes adding additional categorical transfer flexibility for Mega-Item programs (minimal impact), federal dollars (up to 30% transfer to/from Title 2, Safe & Drug Free Schools, and Enhancing Education Technology), and AB825 programs;  The Governor has proposed taking action to delay timelines for textbook adoption. For OUSD this means delaying math and English textbook ordering.

11. every student. every classroom. every day. 11 Governor’s 2008-09 Budget Proposal: Revised Multi-Year Budget Projections Data below accounts for all known, proposed changes to date. See following slide for reserve designations. 1 st Interim Recap, General Purpose Only2007-082008-09 Beginning Fund Balance$18,276,299$18,154,326 Revenues$232,379,063$234,813,352 Expenditures$232,501,036$234,202,720 Net Increase/(Decrease)($121,973)$610,632 Ending Fund Balance$18,154,326$18,764,958 Governor’s Proposed Reduction($1,067,000)($15,565,800) Enrollment Adjustments (2008-09 Only)$3,037,174 Total Net Adjustments($1,067,000)($12,528,626) Revised Ending Fund Balance$17,087,326$4,558,700

12. every student. every classroom. every day. 12 Governor’s 2008-09 Budget Proposal: Revised Multi-Year Budget Projections 1 st Interim Recap, General Purpose Only2007-082008-09 Revised Ending Fund Balance$17,087,326$4,558,700 Projected Required 2% Reserve for Economic Uncertainty$8,711,731 Projected Audit Finding Designations$3,500,000 Projected Declining Enrollment Contingency$3,500,000 Total Minimum Needed Ending Fund Balance$15,211,731 Total Minimum Expenditure Reduction Needed$10,653,031 Additional Safety Net Required$2,500,000 TOTAL REDUCTIONS NEEDED$13,153,031 Please note that the 2 nd Interim financial report is scheduled to be presented at the March 12 th Board meeting. This will be the most up-to- date, official District financial report.