1. Ramona Unified School District Board Meeting August 25, 2011

2. Importance of End-of-Year Close Staff has reported on the importance of the unaudited actuals The ONLY time during the year when an accurate picture of the District’s finances can be seen Shows the picture on one specific day -- June 30th All revenues and expenses are accounted for All other times are predictions of the finances However, with the current fiscal crisis, end-of-year close is a piece of information which helps to determine the finances for future years

3. 2010-2011 Financial Highlights Federal Jobs Bill $1.19 million to RUSD, which has been spent Federal Stimulus Dollars Spent the remainder of these funds in the amount of $900,000 State Budget Adoption (October 2010) State budget was adopted with no anticipated reduction to revenues No mid-year reductions Remained on qualified status Governor Brown took office, reduced non-education budget, and proposed an extension of temporary taxes

4. 2010-2011 Financial Highlights School districts ended with a roller coaster ride of flat funding versus a reduction of revenue limits to their 2011-2012 budgets Now, with a signed 11-12 budget, still uncertainty with: World economy National economy State economy The State budget has trigger language for mid-year reductions Current State revenues are below projections for the triggers Triggers could mean a mid-year cut of $2 million to Ramona

5. 2010-2011 Unaudited Actuals Total Revenues$50,281,269.58 Total Expenses$49,416,532.47 Difference$ 864,737.11 Shows both unrestricted side and restricted side of the financial picture A transfer of $800,000 from Special Reserve, Fund 17, was part of the closing of 2010-2011

6. The Final 2010-2011 Outcome Beginning Balance $ 7,329,657.65 Ending Balance$ 8,194,394.76 Unrestricted Ending Balance$ 6,908,672.50 Restricted Ending Balance$ 1,285,722.26

7. Components of Ending Balance Unrestricted Revolving Cash $25,000.00 Formerly Restricted Programs$1,214,769.74 Site/Department Carryover$666,713.12 Vacation Liability$720,064.00 Remaining Balance for 2012-2013$4,282,125.64 Total$6,908,672.50 Vacation Liability plus remaining balance means $5,002,189 will be carried over to 2012-2013 school year

8. Multi-Year Problem 2011-2012 (current year), RUSD has the fiscal resources to meet obligations 2012-2013 (only 10 months away), RUSD must realize significant reductions to meet its financial obligations What could change the scenario?

9. 9 2011-20122012-20132013-2014 Beg. Bal. 5,002,1892,862,448(1,932,178) Revenues45,638,52245,476,61446,306,864 Total Rev. 50,640,71148,339,06244,374,686 Expenses48,678,26350,271,24051,875,177 Transfers 900,000 900,00000 Ending Bal. 2,862,448(1,932,178)(7,500,491) Multi-Year Projection No new Federal Money, if any, a reduction of Title I and Title II The multi-year projections have cost of increases from the State Health care and employee costs will not likely to go down The State and National economy is sluggish Is there, and in what form, a next silver bullet to help us out in the future?

10. Multi-Year Problem - Conclusion Ramona is facing a $1.9 million shortfall for 2012-2013 Dollars in various funding sources, such as textbooks, ROP, and site/department carryovers, will help to fund this shortfall However, this is not enough to eliminate the shortfall Other reductions must happen to alleviate the shortfall 2013-2014 year is projecting a $7.5 million shortfall Must begin to plan for this sooner rather than later 2014-2015 becomes the third year in the forecast, starting with the first interim report in December Multi-year projections are constantly changing with new information

11. Loss of Federal Funding In 2010-2011 Ramona received and spent: $1,190,000 in Fed Jobs money $900,000 in remaining ARRA funds These Federal dollars (over $2 million) are not being replaced for 2011-2012 Costs have gone up: Over $500,000 in health care costs alone

12. Health Insurance Costs Gap for Kaiser and Health Net insurance programs has increased significantly Health Net increase is $507,000 Kaiser increase is marginal CSEA, RTA, and ALT have agreed to negotiate and/or discuss cost-savings ideas with the District by Sept. 7 Open Enrollment has been delayed to determine if savings are possible for this year May be possible to cut the 2012-2013 shortfall with creative solutions to control rising health care costs

13. Resolution 2010-11-21 The Board adopted a resolution in June that identified the amount of budget reductions needed in future years RUSD must submit a list of Board-approved budget reductions by the First Interim Report, December 15, 2011, which corrects the imbalance RUSD must provide a list of the cuts that have already been made and a list outlining the timetable of remaining cuts and/or concessions

14. Other Funds Fund 17 Special Reserve Fund Revenues (Interest)$ 20,269.76 Expenses (Transfers out)$ 820,269.76 Ending Balance$2,395,945.55 Note about the ending balance: A 3% minimum reserve is $1,482,496 $900,000 is budgeted to be transferred to general fund in 2011-2012 $2,395,945 minus $900,000 leaves ONLY the 3% reserve

15. Other Funds Cafeteria Fund Revenues $1,932,726.91 Expenses$2,003,614.77 Ending Balance$ 688,705.29 Self Insurance Fund Revenues$577,225.74 Expenses$719,617.56 Ending Balance$209,580.49

16. Other Funds Developer Fees Revenues $ 141,926.27 Expenses $1,076,290.91 Ending Balance $7,266,061.99

17. Conclusion Ramona Unified is facing a potentially devastating financial crisis in 2012-2013 and beyond This is without any “triggers” happening Downward world, national, and state economies could mean no growth for school funding and no “silver bullet” Structural problem in our budget Cash shortages and the inability to borrow the cash will become the problem