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2. Table of Contents 2  The Big Picture  Total General Fund  State Loan  Unrestricted General Fund  2014-15 Budget Update  2015-16 State Budget and Impact on the District  OUSD 2015-16 Budget Development Update  Appendix

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4. District Overview 4 Funding (1 st Interim 2014-15) Schools (14-15 at-a-glance) Students (14-15 at-a-glance) Total Expense Budget:$633.6 MTotal:86Total:37,147 General Fund:$442.1 MElementary:54TK-5:20,585 Other Funds:$191.5 MMiddle:136-8:7,369 High:109-12:9,193 Alt/Cont:9

5. 2014-15 Oakland Unified Revenue by Type Total District Revenue: $568.9M (Millions) 5

6. 6 Total Budgeted Expenditures $633.6 M General Fund $442.1 M OTHER FUNDS WITH NO EXPENSES Tax Override Debt Service (COPS Pmts) Child Develop. $13.3 M Bond Int. and Redemption $59.1M Self Insurance $17.9 M Adult Ed. $1.9 M Cafeteria $17.6 M California Districts use the funds listed above to account for activities to be managed and accounted for separately. All of the activity in these Funds is restricted, with the exception of the General Fund. The General Fund has both unrestricted and restricted resources and activities that need to be managed. Construction Related $81.7M 2014-15 First Interim See page 36 in the Appendix for description of fund use Restricted Resources Restricted & Unrestricted Resources

7. Fiscal Oversight Process 7  The Alameda County Office of Education (ACOE) has oversight responsibilities over all districts in the county, including OUSD.  The State requires periodic financial reports to be submitted for review to all county offices of education, including ACOE, then to the State (see next slide for schedule of reports).  Districts self-certifies, based on projections at the time of the report, whether the fiscal condition is:  Positive – able to meet financial obligations for the current and subsequent two fiscal years.  Qualified – may not meet financial obligations for the current and subsequent two fiscal years.  Negative – unable to meet financial obligations for the current and subsequent two fiscal years.

8. Fiscal Oversight Process (Continued) 8  OUSD has self-certified as “Qualified” for the past several years because we are behind in our audits and may end up with financial penalties that could affect our ability to meet financial obligations.  ACOE provides a letter with comments to districts after reviewing each report.  In addition, all labor agreements must be reviewed by the ACOE for fiscal feasibility prior to Board approval.

9. State-Required Financial Reports and Due Dates 9 Financial Snapshot:Report Due to County:Report Name July 1 (beginning of FY)Within 5 days of adoption by the Board or no later than July 1 Adopted Budget July 1 (beginning of FY)Within 45 days of adoption of State Budget Revised Budget (if necessary) October 31December 15First Interim Report January 31March 15Second Interim Report April 30June 1Third Interim Report* June 30 (end of FY)September 15Closing of the Books / Unaudited Actuals June 30December 15Audit Report * Third Interim only required if Second Interim was certified as “Qualified” or “Negative”.

10. Annual Financial Audit Status 10  The State Controller’s Office (SCO) has had sole responsibility for completing the District’s annual audits. This responsibility began in 2002-03 and will continue until the State Loan is fully repaid.  Over the past 13 years, the SCO completed 8 audits, however an opinion on the financials was not provided until 2014 for the 2011- 12 audit.  OUSD and the SCO agreed to skip the audit for two years (2008-09 and 2009-10). We remain 2 years behind (2012-13 and 2013-14). Currently, we are working on the 2012-13 audit.  As of last week, the SCO agreed to allow our outside audit firm, Vavrinek Trine & Day (VTD), to perform the 2012-13 audit.  Over the years, the SCO audits included hundreds of audit findings and millions of dollars in questioned costs. The District has fought most findings, resulting in less than $5 million paid to-date.

11. State Loan 11  In May 2003, the State of California authorized an emergency loan of $100 million to OUSD and a State Administrator was appointed to take over the powers and responsibilities of the governing board of the District.  In June 2003, the District drew down $65 million of the $100 million. The remaining $35 million was drawn down on June 30, 2006.  On June 29, 2009, the powers and responsibilities were returned to the Board.  The interest on the loan is 1.77%, and each draw down has it’s own 20- year repayment schedule.  The $65 M requires a payment of $ 3,890,534 every year through 2023.  The $35 M requires a payment of $ 2,094,903 every year through 2026.  The Total Annual Payment is: $5,985,437.

12. State Loan 12  The State refinanced the original $65M loan through a bond offering through the State Infrastructure Bank (I-Bank) resulting in higher interest rates and larger payments. However, the net payment by the District remains the same – the State pays the difference.  As of June 30, 2014, the total principal outstanding was $54,553,978.  Remaining payments total $60,153,640 through June 30, 2026; including interest.

13. Outstanding General Obligation (G.O.) Bonds 13  District voters have approved the “ authorization ” of 4 G.O. Bond measures totaling over $1.38 billion in bonds since 1994.  G.O. Bonds must be utilized to fund capital projects (modernization or new construction of school facilities) as specified in the language of the bond measure.  The District currently has $803 million of outstanding G.O. Bonds that are being repaid, with interest, by Oakland taxpayers.  Bonds are repaid on taxes from property values. The current tax rate for Bond repayment $174.50 per $100,000 of assessed value.

14. Outstanding General Obligation (G.O.) Bonds 14  The District still has authorization to “ issue ” $420 million as follows:  $65 million from Measure B  $355 million from Measure J OAKLAND UNIFIED SCHOOL DISTRICT GENERAL OBLIGATION BOND SUMMARY MEASURE CMEASURE AMEASURE BMEASURE J 1994 Election2000 Election2006 Election2012 ElectionTOTALS Original Authorization: $169,730,000 $303,000,000 $435,000,000 $475,000,000 $1,382,730,000 Issued Against Authorization: $169,730,000 $303,000,000 $370,000,000 $120,000,000 $962,730,000 Bonds Still to be Issued: $65,000,000$355,000,000 $420,000,000 Bonds Outstanding: $ 112,089,516 $242,705,484 $339,960,785 $108,200,000 $802,955,785

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16. Total General Fund 16 2014-15 First Interim (In Millions)

17.  Total General Fund Budget – 2014-2015 (Millions) 17 Total Budgeted Expenditures $633.6 M Other Funds $191.5 M General Fund $442.1 M School Support $133.9 M Infrastructure $77.9 M Elementary $117.7 M Middle $48.0 M High $57.0 M School Climate $7.2 M Extended Ed Svc. $7.9 M Pro/Currc Devel $5.6 M General Ed $8.8 M Bus, HR, Data, etc. $25.2 M Child Development - $13.3 M Self Insurance - $17.9 M Adult Ed. - $1.9 M Cafeteria - $17.6 M Construction - $81.7 M Bond Int & Redemption - $59.1 M Special Edu & Transportation $91.7 M Facilities Maint. & Construction $12.0 M Dist. Leadership $54.4 M Dist. Expenses $(1.7) M Note: See Appendix on pages 43-45 for detail of the above School Support and Infrastructure Private/CDC $1.6 M School Site Budgets $224.3 M State Loan $6.0 M Other Schools $0.7M 2014-15 1 st Interim Restricted Resources Restricted & Unrestricted Resources

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19. 2014-15 Unrestricted General Fund (In Millions) 19 2014-15 1 st Interim

20. How IS LCFF Funding Structured? 20 Concentration $12.9 M Concentration additional funding based on targeted students exceeding 55% of a district’s enrollment Supplemental $17.4 M Supplemental additional funding based on targeted disadvantaged students (English Learners, Low Income, & Foster Youth) Base $265.8 M Base per pupil funding based on average daily attendance (ADA). 2014-15 1 st Interim

21. 2014-15 Estimated Unrestricted General Fund (In Millions) Total Unrestricted Expenses: $322.9M 21

22. Total General Fund Budget – 2014-2015 (Millions) 22 Total Budgeted Expenditures $633.6 M Other Funds $191.5 M General Fund $442.1 M School Support $87.2 M Infrastructure $33.5 M Elementary $106.6 M Middle $39.1 M High $50.5 M School Climate $7.2 M Extended Ed Svc. $6.0 M Pro/Currc Devel $3.9 M General Ed $6.2 M Bus, HR, Data, etc. $18.4 M Child Development - $13.3 M Self Insurance - $17.9 M Adult Ed. - $1.9 M Cafeteria - $17.6 M Construction - $81.7 M Bond Int & Redemption - $59.1 M Special Edu & Transportation $51.2 M Facilities Maint. & Construction $12.0 M Dist. Leadership $18.7 M Dist. Expenses $(3.6) M Note: See Appendix on pages 43-45 for detail of the above School Support and Infrastructure Private/CDC $- M School Site Budgets $196.2 M State Loan $6.0 M Other Schools $0.7M 2014-15 1 st Interim Restricted* $119.2 M Unrestricted $322.9 M * See pages 50-53 for detail of Restricted Resources Restricted Resources Restricted & Unrestricted Resources Unrestricted Resources

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24. 24 Initial Assumptions for the 2014-15 OUSD Budget – LCFF Funding

25. Changes to LCFF Funding Based on the State Adopted 2014-15 Budget 25  The 2014-15 budget development process resulted in unrestricted resources available for ongoing expenses at adoption of $6.2 million  The final 2014-15 State Budget added LCFF funding of $2.5 million :  Based on the above, the total available for unrestricted on-going expenses for the revised 2014-15 budget was $8.7 million

26. Summer Adjustments To The 2014-15 Budget 26  The adopted and revised 2014-15 budget did not fully fund some of the District’s Priorities & other items.  Superintendent Wilson directed and led staff to 1) allocate $2.4M of additional funding from the State to expenses and 2) make central office reductions totaling approximately $ 2.3 M, including the reduction of 12 central office FTEs  These central cuts and additional allocations funded 1) additional District priorities totaling $3.5 M, and 2) Supt Wilson’s directed central office reorganization totaling $1.2M. These funds were primarily invested into school sites as follows:  Educator Effectiveness Program (teacher evaluation pilot program)  Additional Teachers in Specific Schools  PEC Teachers, Psychologist, Aides  Support for New Teachers (internship support)  Textbooks  Stipends & resources for teacher professional development  Investment in School Site Staff (to minimize classified bumping via desk audits).

27. 2014-15 Estimated Unrestricted General Fund (In Millions) 27  Total Unrestricted Expenses: $322.9M 27

28. 2014-15 Unrestricted per Pupil Analysis 28 2014-15 First Interim

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30. Assumptions for the 2015-16 Budget Before the January State Budget 30  The following were assumptions for 2015-16 for the District’s unrestricted Budget:

31. 2015-16 Budget Additional Items In Need of Funding 31  The following are District priorities for which we have not yet identified funding for 2015-16: * Will increase resources at school sites.

32. The Governor’s January State Budget 32  The highlights from the Governor’s Proposed Budget for 2015-16 for our District are as follows:  Additional LCFF Funding: Increase from an estimate of $15.3M to $23.8M, an additional $8.5M  One-time discretionary funding ($180/ADA): $6.4M  Increase in retirement rates (STRS & PERS) as previously anticipated  Additional funding potentially available for adult education, career and technical education, and internet connectivity: eligibility and amounts not yet known.

33. 33 Estimated Additional LCFF Revenue & Commitments - 2016-17

34. Enacting the State Budget – CliffsNotes™ Version 34  While the State Budget process is complicated and covers six months, here’s the CliffsNotes™ version Governor introduces State Budget proposal Budget Bill introduced in both houses shortly thereafter By January 10 February Early Spring Budget Trailer Bills are released, providing critical details to the January proposal Budget Subcommittees examine specific details of the proposal Some policy decisions made, most delayed until May Revision

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36. 2015-16 Budget Development Underway  School sites have been allocated a base allocation and are working on their budgets now.  School site councils will be engaged in the process over the next few weeks.  Central offices are next in line.  Unrestricted budgets have been reduced by $5.4 M  Additional student program needs of $2.5 M have been identified for funding  Central budgets will be 12% or less of total Unrestricted General Fund, per Board Policy #3150.  Plan to have all budget decisions in place by February 20 and finalized by February 27 so staffing work can begin as early as possible. 36

37. School Allocations for 2015-16 37  Same teacher staffing ratios as last year, except all TK-3 classes are staffed at 24:1. Grade15-16 Ratio14-15 RatioChange TK, K24:1 - 1 - 2 27:1Reduced by 3 3 24:1 27:1Reduced by 3 4-531:1 - 6-1232:1 -

38. Administrators & Clerical Staffing 2015-16 38  Administrators  All schools get a principal.  Assistant principals (APs) are allocated based on the school type and number of students.  Clerical  All sites are allocated one clerical admin.  All sites receive an allocation (from.5 FTE to 2 FTE) for an attendance clerk.  Noon supervisors and additional clerical staff allocations are based on school type and number of students.  Number of students for classified allocations includes special day class (SDC) students.

39. Discretionary Funds 39 Discretionary unrestricted funds per pupil (same as 14-15): School Type2015-16 Amount Per Pupil 2014-15 Amount per pupil Change Elementary TK-5$175 - TK-8$200 - Middle School (6-8)$225 - High School (6-12)$263 - High School (9-12)$300 -

40. Supplemental & Concentration Funding At Schools 40 FundingBased On2015-162014-15Change EIAStudents who qualify for Free & Reduced Lunch $ -$9,954,000- $9,954,000 SupplementalLCFF target students (Low Income, English Learners, & Foster Youth) $12,379,000$3,000,000+9,379,000 ConcentrationZ Score of School$2,075,000$1,500,000+$575,000 TOTAL$14,454,000 $ - Concentration Allocations Z Score of School2015-162014-15Change Z=6 (10 schools)$100,000$95,000+$5,000 Z=5 (11 schools)$50,000 $ - Z=4 (21 schools)$25,000$ -+$25,000

41. Budget Development Process 41 PhaseDates 1 – Planning & PreparationNovember – January 2 – AppealsJanuary 21-23 3 – ConsultingJanuary 8 - February 20 4 – Decision Making & TradesJanuary 26 - February 6 5 – Approvals & FinalizationFebruary 6 - 20 6 – Lock-inFebruary 20-27

42. Appendix 42 Appendix Name Page(s)  School Support – General Fund 43  Central Infrastructure 44-45  Fund & Type Purpose 46  Per Pupil Analysis – Elementary School 47-48  Per Pupil Analysis – Middle & High School 49  Per Pupil Analysis – K-8, 6-12, * Alt. Ed. 50  General Fund Restricted Resources: Summary 51  General Fund Restricted Resources: Schools/CDC/Private 52  General Fund Restricted Resources: Central Office 53  General Fund Restricted Resources: District-wide 54  2014-15 Title 1: Central Allocation 55  2014-15 Measure J Spending Plan 56

43. Appendix - School Support General Fund 43

44. Appendix – Central Infrastructure 44

45. Appendix – Central Infrastructure (cont’d) 45

46. Appendix – Fund Type & Purpose 46 FUND NAMEFUND PURPOSE Child Development Fund Accounts for Federal, State, and local revenues for child development programs. Self Insurance Fund Accounts for repayment of principal and interest of locally approved General Obligation Bonds. Adult Education Fund Accounts for Federal, State, and local revenues for adult education programs. Cafeteria Fund Accounts for Federal, State, and local resources to operate the food service program. Bond Int. & Redemption Fund Accounts for repayment of principal and interest of locally approved General Obligation Bonds. Construction Related Funds: Deferred Maintenance Accounts for State apportionments and matching funds for deferred maintenance. Building Fund Accounts for proceeds from the sale and expense of locally approved General Obligation Bonds. Capital Facilities Accounts for funds received from developers' fees and redevelopment agencies. State Modernization Accounts for revenues and expenses associated with State- wide modernization. Special Reserve for Facilities Accounts for the revenues and expenses associated with restricted facilities funds.

47. Appendix – Per Pupil Analysis - Elementary 47

48. 48 Appendix – Per Pupil Analysis – Elementary (Continued)

49. Appendix – Per Pupil Analysis – Middle & High 49

50. Appendix – Per Pupil Analysis: K-8, 6-12, & Alt. Ed 50

51. 51 General Fund Restricted Resources - Summary In Millions

52. 52 General Fund Restricted Resources – Schools/ CDC/ Private In Millions

53. 53 General Fund Restricted Resources – Central Office In Millions

54. 54 General Fund Restricted Resources – District-wide In Millions

55. 2014 – 2015 TITLE 1 CENTRAL ALLOCATION 55 * In order to maintain equity in the Per Pupil Allocations as required by Title 1 Regulations, services are budgeted centrally and provided to students at targeted sites.

56. 2014 – 2015 MEASURE J SPENDING PLAN 56 Presented to the Board April 9, 2014