1. DCSD Budget Reduction Plan for 2010-11 March 2, 2010

2. AGENDA  State revenue challenges for 2009-10, 2010-11, and 2011-12 (Terry Casey)  Recommended reductions for 2009-10 and 2010-11 (Steve Herzog)  BoE asked to determine whether reduction plan is reasonable (Steve Herzog)

3. State Funding Impacts  State revenue shortfall presented by David Hart and Terry Casey  Impacts for K-12 schools  Impacts for DCSD

4. Recommended Reduction Summary $71 M State revenue shortfall DCSD 2009-10 through 2011-12 $ 5 M 2nd year of planned DCSD reductions for 2010-11 $76 MAnticipated reductions for 2009-10 through 2011-12 $12 M 2009-10 state rescission $64 M $40 M2010-11 reduction plan $24 M2011-12 remaining shortfall to address

5. Recommended Reductions for 2009-10  Mid-year CDE rescission of $9.2M - $12.4M  1.93% saved $ 7.7M  1.25% from all sites$ 2.2M  1.25-2.50% from Departments$ 1.5M  Contingency$.6M TOTAL identified$12.0M IMPACT: Less resources in schools and departments for 2009-10. Hiring freeze in place with only essential personnel replaced.

6. Recommended Reductions for 2010-11  Central Office/Services Reductions (6 - 10%)  Capital Reserve (defer maintenance/technology)$4,000,000  Reorganize/reduce Custodial Services $1,070,000  Reorganize/reduce Learning Services $ 800,000  Reorganize/reduce Operations & Maintenance $ 715,000  Reorganize/reduce ITS Services$ 400,000  Reduce Construction, Planning & Risk Mgt.$ 290,000  Reorganize/reduce Human Resources$ 250,000  Reorganize/reduce Business Services $ 130,000  Reduce mileage, phones, printing$ 120,000  Reorganize/reduce Legal Services $ 100,000 Subtotal $7,875,000  Impact: Approximately 40 FTE

7. Recommended Reductions for 2010-11  Program Reductions/ Reorganizations  School-Based Budgeting Enhanced$2,000,000  Transportation changes due to calendar changes$1,000,000  205 Drivers with less hours each  36 Transportation EA’s with less hours each  Schedule A (athletics fees will help restore)$1,000,000  ETIL supplement for 10 schools $ 650,000  Innovation & Development reduction$ 500,000  eDCSD becomes fully self-funded$ 200,000 Subtotal$5,350,000  Impact: Approximately 35 FTE

8. Recommended Transportation Reductions for 2010-11  Conversion from a 4-track calendar to a conventional or modified calendar at 14 elementary schools in the 2010-2011 school year means:  Most bus drivers and Transportation Education Assistants (TEA) currently budgeted at.81 FTE (12 months) will be reduced to.59 FTE (9 months)

9. Additional Transportation Costs Additional cost could be offset by Transportation Usage Fee (based on 2009-2010 ridership) $1.00 per student per day = $2.5M estimated revenue

10. Recommended Reductions for 2010-11  School or Site Based Budget (SBB) Funding Reductions  SBB reduction of $250 per site$12,500,000  $100 SBB reduction from 2-year reduction plan ($5M)  $150 additional SBB due to state revenue shortfall  Student growth funding savings$ 1,500,000  Special Education ratios change$ 1,500,000 Subtotal$15,500,000  Impact: Approximately 220-300 teachers/classified FTE (including 190 one-year only teachers)

11. Recommended Reductions for 2010-11  Compensation Reductions (negotiated)  Compensation freeze for all employees (0.4%)$3,000,000  Furlough day for all employees – 1st day$1,100,000  2 nd day$1,100,000  3 rd day$1,100,000  Reduce substitute pay for retired teachers$ 200,000 (Now $150 per day, reduce to $115 per day) Subtotal$6,800,000 ____________________________________________________  Pay for Performance for all employees $4,200,000 RECOMMEND: Suspend for 1 year while program is under revision and move to Benefits Incentive Plan

12. Recommended Revenue for 2010-11  Fees for services  ITS fee of $25 per student$1,300,000  Transportation fee of $1 per day per rider$2,000,000 Subtotal$3,300,000 Increase Athletic/Activities fees to help $ 500,000 restore reductions to Schedule A  Middle School increase $20 per student  High School increase $30 per student

13. Recommended Reductions/Revenues for 2010-11 SUMMARY  Central Offices / Services$ 7,875,000  Program Reductions/ Reorganizations$ 5,350,000  School-Based Funding$15,500,000  Compensation$ 6,800,000  Pay for Performance$ 4,200,000 TOTAL$39,725,000 Fees for services$ 3,300,000 Total$43,025,000

14. Recommended Plan: 2010-11 Identified reduction + fee revenue$43,025,000 2010-11 State revenue shortfall $31,000,000 Health Benefit Incentive$ 4,200,000 Balance $ 7,825,000 Other factors to be considered: TBD = Charter override sharing plan($ 1,500,000) State final budget to be released in May 2010($ ????????)

15. Budget Pressures on DCSD  Key Considerations  Multi-year state revenue shortfall ($71M)  PERA annual increases through 2018  Assessed valuation decreasing  Need to address equity issues across the system

16. Recommended Reduction Summary $71 M State revenue shortfall DCSD 2009-10 through 2011-12 $ 5 M 2nd year of planned DCSD reductions for 2010-11 $76 MAnticipated reductions for 2009-10 through 2011-12 $12 M 2009-10 state rescission $64 M $40 M2010-11 reduction plan $24 M2011-12 remaining shortfall to address

17. Timeline for Reductions March 2, 2010 BoE finds proposed budget balancing plan reasonable March 22, 2010 State economic forecast update expected May 2010 Legislature adopts final budget May 2010 Preliminary DCSD 2010-11 budget shared with BoE June 2010 Final DCSD 2010--11 budget adopted by BoE