1. 2010-11 State Adopted Budget Board of Education October 19, 2010 LODI UNIFIED SCHOOL DISTRICT Business Services/Budget Department Prepared by: Dr. Cathy Nichols-Washer Douglas Barge Carrie Hargis Y:\Business Services\Budget\2010-11\Adusted\Meetings\B10-19-10\10-11 State Adopted B10-19-10.ppt

2. Table of Contents DESCRIPTION A.Opening Comments A1 – A2 B.Revenue Limit B1 – B3 C.Cash Flow C1 – C3 D.Other Funds D1 – D4 E.Budget Balancing Tools E1 – E2 F.Categorical Programs F1 G.Wrapping it Up G1 PAGE # i i

3. Opening Comments School District Governing Boards are required by Education Code 42127 to adjust their budgets within 45 days of the State adopting a budget plan This report is the first step in the process Staff will be reporting the major elements of the State Adopted budget that affect the Lodi Unified School District On November 3, staff will report the impact of the State budget plan on the District and present recommendations for changing the District budget Formal Board action to adjust the District budget will be presented on November 16 A1

4. Opening Comments This report will focus on changes to the education budget based on what the State has for us As with any State budget there are significant pluses & minuses Pluses: Fewer reductions than were being proposed back in May Some new funding (one-time) Minuses, lots and lots of minuses: Retains huge deficits Suspends Prop 98 Sales of State assets to create one-time resources, which will require on-going expenditures (rents) By all accounts the income assumptions have high risks Does not address the long term structural balancing at the State level A2

5. The 2010/11 Revenue Limit B

6. Revenue Limit Deficit 2008/092009/102010/11 (.39%) Or $25 Adopted Change #2 Adopted Change #1 B1

7. Revenue Limit Deficit Factor Revenue Limit is being increased by $1.5 B in 2010/11 $246 This increase amounts to about $246 per student This is a reversal of the Governor’s proposal made back in May The question of one-time verses on-going is still being researched by staff Deficit Factors Changes 2009/102010/11 January13.094%18.355% May Revision17.967%18.355% State Adopted18.355%17.963% (.39%) Or $25 B2

8. K-12 Revenue Limit Governor’s Jan. Proposal For 2010/11 Cola (.38%)Deficit 18.355% Governor’s May Proposal For 2010/11 Cola (.39%)Deficit 18.355% 2010/11 State’s Adopted Budget Cola (.39%)Deficit 17.963% Good Stuff ($1,147) B3

9. Cash Flow C

10. 2010/11 Cash Flow State Delays Paying Schools July 10 Dec 10 Aug 10 Sept 09 Sept 10 Oct 10 Nov 10 Jan 11 Feb 11 Mar 11 Apr 11 Dec 10 May 11 Jun 11 Jul 11 Aug 11 C 1 Jul 11 25% of my cash next year? Apr 11 9% 5% 9%.5% 8.5% 9% 6% 4.5% 3% 4.5% C1

11. State Funding Allocations C2

12. The Cash Flow Problem Panic Time C3

13. Other Programs D

14. Special Education The budget plan restores the loss of funding resulting from a negative COLA (.38%) Growth Funding is provided Mandate turmoil related to mental health services continues at two levels Who provides the services? How are they to be paid? D1

15. Mandated Programs These have historically been an extremely unreliable revenue stream The May budget proposals contained only a few token dollars This has changed with the new State Adopted budget for 2010/11 There is “Settle Up” funding for 2009/10 payments There is some funding for 2010/11 The amounts coming to the District are not known and should be considered one-time resources D2

16. Kindergarten Entry Age SB 1381 (Chapter 705/2010) changes the date for students starting kindergarten – they must turn five on or before: December 2 for the 2011/12 school year November 1 for the 2012/13 school year October 1 for the 2013/14 school year September 1 for the 2014/15 school year and each school year thereafter Requires school districts to offer a transitional kindergarten program, which is phased in over three years beginning in 2012/13 Defines transitional kindergarten as the first year of a two-year kindergarten program Uses curriculum that is age and developmentally appropriate D3

17. PERS & STRS Costs STRS Program is actuarially out of balance over the long term Rate increases are likely in the near future There will be other changes to the program Legislation will be required to increase contribution rates PERS Program is actuarially out of balance over the long term, as well Rate are going up D4

18. Budget Balancing Tools E

19. Flexibility Available Expires January 1, 2012: Proceeds from the sale of surplus property may be used in the General Fund – Ends June 30, 2012 Expires June 30, 2012: Minimum reserve requirements Reduced penalties for K-3 CSR Expires June 30, 2013: Standard aligned instructional materials sufficiency Base year of 2007/08 for ADA-Funded flexible programs (adult ed., ROP & others) 8 E1

20. Flexibility Available Expires June 30, 2013 (cont.): Routine Restricted Maintenance set aside reduced to zero (except for what is necessary for Williams compliance) Deferred Maintenance hardship funding suspended Suspension of Deferred Maintenance local match requirement Tier III Categorical Program flexibility Reduction of school year by up to five days and/or equivalent in instructional minutes Suspension of instructional materials adoption requirement 8 E2

21. Categorical Programs F

22. Program Changes Federal Jobs Program: First 90% of funding has arrived Funding may be used to support educational programs and related services It’s intended for staff Remaining funding may not equal the full 10% State Fiscal Stabilization Fund (SFSF) Final allocation adjustments will be coming to the District Could be between $40 & $50 per ADA This is one-time funding 6 F1

23. Wrapping It Up G

24. Conclusion Our next report will provide recommendations for adjusting our budget State Categorical Tier III flexibility will be coming to an end soon There are a lot of unknowns Funding is not guaranteed Requirements may or may not change Mandated income should not be budgeted until it arrives Federal Job program provides only one-time resources A plan can be put together to fulfill our negotiated agreement with LEA 10 G1

25. The End!