1. Steven Lawrence, Ph.D., Superintendent Bryan Richards, Chief Financial Officer November 21, 2011

2.  Erased the 2.24% COLA with increase in Deficit Factor  Did not cut the additional $330 per ADA that was believed to be at risk at May revise  Instead, created trigger cuts if State revenues come in below projections, cutting funding mid-year ◦ Revenue limit up to 4% ◦ Home-to-School and Special Education Transportation approximately 50%  If triggers activated, districts may negotiate up to seven additional furlough days that reduce the school calendar up to a total of twelve days

3.  Estimated UGF ending balance$ 33.0M  Estimated undesignated balance$ 23.2M  Projected deficit 11/12$( 2.2M)  State fiscal uncertainty 11/12$(10.7M)  Estimated unassigned 6/12$ 10.3M  Projected surplus 12/13$ 7.1M  Reduction of 2% reserve$ 0.5M  State fiscal uncertainty 12/13$(10.7M)  Estimated unassigned 6/13$ 7.2M  Projected surplus 13/14$ 8.7M  State fiscal uncertainty 13/14$(10.6M)  Estimated unassigned 6/14$ 5.3M

4.  Actual UGF ending balance$ 45.5M  Actual undesignated balance$ 30.8M  Projected deficit 11/12$( 2.2M)  State fiscal uncertainty 11/12$(10.7M)  Estimated unassigned 6/12$ 17.9M  Projected surplus 12/13$ 7.1M  Reduction of 2% reserve$ 0.5M  State fiscal uncertainty 12/13$(10.7M)  Estimated unassigned 6/13$ 14.8M  Projected surplus 13/14$ 8.7M  State fiscal uncertainty 13/14$(10.6M)  Estimated unassigned 6/14$ 12.9M

5. Full utilization of State Fiscal Stabilization Fund and Education Jobs Fund in 2010-11 Tier 3 grants remain unrestricted Their unspent balances and site carryovers make up large part of ending balance

6.  Tier 3 Program Carryovers$ 3,178,903  Site Carryovers$ 1,786,820  Inventory & Prepaid adj.$ (27,678)  Fund Bal. Desig. Chgs$ 4,938,045  Undesignated is up by $7.6M due to one time Special Disability Adjustment +$2M, Mandated Cost Reimbursement +$1.4M, CSR +$0.5M, State Fiscal Stabilization funds used for salaries +$1.6M and cost savings efforts

7.  Higher deficit factor in 2011/12 (increased from 17.963% to 19.754% to offset COLA)  Base Revenue Limit = $6,489.02/ADA  Deficited Revenue Limit = $5,207.18/ADA  Deficit also applies to Meals for Needy and Beginning Teacher Salary Adjustment  Total deficit factor for 2011-12 = $42,055,325  Equivalent to eliminating 35.6 days’ instruction

8.  State Budget calls for graduated mid-year cuts if State revenues miss estimates. If it misses by $4 billion the following occurs:  Reduction of Revenue Limit (including MFN and BTS) by an additional 4% = $261.73 per ADA or $8,515,797  It will also reduce transportation funding by 50% = $1,129,707 or $34.72 per ADA  Total trigger cuts $296.45 per ADA or $9,645,504

9.  Furlough Days: Budgeted at 7 days, yet to be negotiated with MDEA ($6M)  $6M x 3 years = $18M  This is greater than the remaining unassigned balance in the three year term of the projection

10. New dartboard: Loss of 12/13 COLA: $- 5.4M Lose 3.2% COLA for 12/13 $- 5.4M Loss of 12/13 COLA in 13/14 County Guidance: Loss of 13/14 COLA: $- 4.7M Loss of 13/14 COLA Clayton Valley Charter High School Loss of $11.4M in Revenue (less oversight $0.1M, facilities use $0.2M) School expenses $7M if they leave SELPA

11.  Actual UGF ending balance$ 45.5M  Actual undesignated balance 6/11$ 30.8M  Projected deficit 11/12$( 8.2M)  Reduction of 2% reserve$ 0.4M  Trigger cuts 11/12$( 9.6M)  Estimated unassigned 6/12$ 13.4M  Projected deficit 12/13$(10.1M)  Reduction of 2% reserve$ 0.2M  Trigger cuts 12/13$( 9.9M)  Estimated unassigned 6/13$( 6.4M)  Projected deficit 13/14$(12.6M)  Trigger cuts 13/14$(10.0M)  Estimated unassigned 6/14$(29.0M)

12.  2011/12 Furlough days$ 6.0M  2012/13 Furlough days$ 6.0M  2012/13 COLA loss$ 5.4M  2012/13 CVHS loss$ 4.2M  2013/14 Furlough days$ 6.0M  2013/14 COLA loss (2 yrs.)$10.1M  2013/14 CVHS loss$ 4.2M

13. In 2010/11 the District spent $6.7M unrestricted and $2.2M restricted general fund dollars at CVHS The Site generated $9.0M in unrestricted revenue limit funding The site’s unrestricted budget is currently $7.0M The revenue the District must transfer to the charter school under the conversion scenario is $11.4M The district can negotiate rent and receives a 1% oversight fee calculated on certain revenues of the school

17. LAO projects State revenues miss estimates by $3.7 billion. Under their projection the following occurs:  Reduction of Revenue Limit by additional 2.9% +- $189 per ADA or $6,151,289 (less than the prorated percentage due to hitting proposition 98 floor)  It will also reduce transportation funding by 51.693% = $1,167,958 or $35.89 per ADA  Transportation may be exchanged for revenue limit cut @ statewide average of $42 per ADA or $1,366,953  Total trigger cuts $231 per ADA or $7,518,242  The trigger cuts become ONGOING!

18.  Why don’t costs track with revenue generated by site? ◦ Declining enrollment – funded on higher of current or prior year ADA district wide (not by site) ◦ Expenditure data based on Current Year Annual ADA ◦ General education programs support more costly programs such as  Special Education  Community Day School  Continuation Education  Home & Hospital

19.  SARC collects data on expenditures, both unrestricted and restricted by site  Not all unrestricted dollars are revenue limit, but most are  Separate handout, you can see how much revenue limit was generated by each site versus expenditures  Non site-based expenditures are apportioned out based on Annual ADA  Remaining funds contribute toward categorical programs such as special education & transportation

20.  We appreciate your taking time out of your autumn break to join us.