REDWOOD CITY SCHOOL DISTRICT Educating Every Child For Success - PowerPoint PPT Presentation

REDWOOD CITY SCHOOL DISTRICT Educating Every Child For Success Preliminary Budget for 2012-13 Presented by: Jan Christensen, Superintendent Raul A. Parungao, Chief Business Official June 13, 2012 1

Outline  State Budget  Revenue and Expenditure Assumptions  Preliminary Budget 2012-13  Contingencies  Multi-Year Projection  State Preschool  Challenges and Uncertainties  Significant Dates 2

State Budget  State budget gap - $15.7 billion  Governor’s proposed solutions to close the budget gap include: Proposed Solutions In Billions Increase State revenue by temporarily increasing income tax $8.84 and sales tax via ballot initiative in November 2012 Offset by increase Proposition 98 funding due to increase in -2.91 revenue Reduce State expenditures 5.23 Other solutions 5.35 Total Proposed Solution $16.51 Source: Legislative Analyst Office 3

State Budget  The increase in Prop 98 funding does not provide additional funds for school districts. Additional funds will be used to:  Backfill one-time actions  Pay down apportionment deferral (25% of the current $10 billion)  Restore transportation funding  Other proposal  Weighted Student Formula (WSF)  Mandate Block Grant  Eliminate Transitional K requirements and funding  Significant cuts to preschool and child care 4

State Budget  If Voters reject the Governor’s initiative for November, there will be trigger cuts, such as:  School Districts and Community Colleges - $5.5 billion  UC and CSU - $0.5 Billion  For School Districts  The proposal to pay down the deferral will be eliminated  Reduction in funding by $441 per student  Weighted Student Formula will not be implemented 5

Base Revenue Limit per ADA for RCSD 6

Historical Deficit Factor Deficit Factor is the percentage by which an expected allocation of funds to a school district or county office of education is reduced. The State may apply deficit factors to revenue limits and categorical programs when the State appropriation is insufficient based on the funding formulas specified by law. 7

Assumptions for Revenue Projection  Enrollment – 9,382 (109 students more than last year)  Average Daily Attendance (ADA) – 9,054 or 96.5% attendance rate 8

Assumptions for Revenue Projection  Funded Base Revenue Limit per ADA Description 2010-11 2011-12 2012-13 Base Revenue Limit (BRL)-Prior Year $6,098.55 $6,074.55 $6,211.55 Add: COLA -24.00 137.00 202.00 BRL-Current Year $6,074.55 $6,211.55 $6,413.55 Less: Deficit Factor -1,091.17 -1,227.03 -1,428.43 BRL Before Trigger Cuts $4,983.38 $4,984.52 $4,985.12 Less: Trigger Cuts 0.00 -52.67 * Funded BRL per ADA $4,983.38 $4,931.85 $4,985.12  * If the ballot initiative fails, the Governor proposed a trigger cut of $441 per ADA, which will bring Funded BRL to $4,544.12 ($4,985.12 minus $441) 9

Assumptions for Revenue Projection  Medical Administrative Activities (MAA) - $600K  Mandate Reimbursement - $0 (will adjust once the funds are received)  K-3 Class Size Reduction Funding – 70% of the funding up to 20 students per class  Lottery - $118 per ADA  Special Education revenue - No COLA  One-time transfer of fund balance from Deferred Maintenance Fund 10

Assumptions for Revenue Projection  Federal categorical program  Loss of one-time Jobs Bill Fund - $1.3 million  Loss of one-time Program Improvement Fund - $0.8 million  State categorical program  Economic Impact Aid and After School Program-same as last year  Loss of Quality Education Investment Act (QEIA)  Tier III Categorical funding-same as last year  Local revenues  Redwood City Education Foundation (RCEF)  Sequoia Health Care District (SHCD)  Family Center, which includes Tri-part agreement, Grove, SFF, & DHHS  TOSA Foundation  Parent Group donations  New funding commitments will be budgeted during the year 11

General Fund Revenue 12

Assumptions for Expenditure Projection  Classroom staffing are projected using class sizes of:  30:1 for Grades K-3  31:1 for Grades 4-8  170 student contacts for McKinley and Kennedy Middle School  2 classes of Transitional K  New Positions  1.0 FTE Student Attendance Coordinator funded by increased ADA  3.0 FTE Technology Resource Teacher funded by Title II and EIA  1.0 FTE Special Education Administrator funded by General Fund  Upgrade Technology Engineer Analyst position to Systems Manager 13

Assumptions for Expenditure Projection  Work year  Teachers – 186 days (178 instruction, 8 Professional Development)  Classified Support and Management work year are based on full calendar  Status of Collective Bargaining  RCTA – settled for 2012-13 with contingency language that is tied to funding level  CSEA – currently in negotiation and the District proposed similar concession like RCTA  The management calendar will be adjusted accordingly, but will be credited by the previous work year reduction 14

Assumptions for Expenditure Projection  Employee benefits  Statutory benefits – 0.6% decrease  Health and Welfare – projected at 8.4% increase  Utilities – same as last year  Supplies and other operating expenses are about the same  Cost of contract for Attention2Attendance  Cost of contract for Infinity Communications (E-Rate consultant)  Estimated net cost of short-term borrowing -$120K  Special education budget deficit - $8.6 million 15

General Fund Expenditures 16

Preliminary Budget 2012/13 (in thousands) Audited Estimated Preliminary Actual Actual Budget 2010/11 2011/12 2012/13 Revenues $78,800 $80,810 $77,809 Less: Expenditures 76,669 82,675 80,445 Surplus/(Deficit) $2,131 ($1,865) ($2,636) Add: Beginning Fund Balance 6,550 8,681 6,816 Ending Fund Balance $8,681 $6,816 $4,180 Less: Designations 2,184 1,309 353 Reserve ($) $6,497 $5,507 $3,827 Reserve (%) 8.47% 6.66% 4.76% 17

Preliminary Budget 2012/13 (in thousands) Unrestricted Total General Special Categorical Tier III General Fund Education Programs Categorical Fund Revenues $51,062 $7,806 $10,096 $7,426 $76,390 Less: Expenditures 50,393 16,397 10,930 2,725 80,445 Surplus/(Deficit) $669 ($8,591) ($834) $4,701 ($4,055) Add: Transfer from Fund 14* 1,419 0 0 0 1,419 Add: Flexibility Transfer 4,701 0 0 (4,701) 0 Add: Contributions (8,693) 8,591 102 0 0 Net Increase/(Decrease) in Fund Balance ($1,904) 0 ($732) 0 ($2,636) Add: Beginning Fund Balance 5,972 0 844 0 6,816 Ending Fund Balance $4,068 $0 $112 $0 $4,180 Less: Designations 241 0 112 0 353 Reserve ($) $3,827 $0 $0 $0 $3,827 Reserve (%) 4.76% 0.00% 0.00% 0.00% 4.76% 18 * One-time transfer from Deferred Maintenance Fund

Contingencies  Possible trigger cuts, if ballot initiative for November fails  The Governor proposed reduction in funding of $441 per student or about $3.9 million for RCSD  As a result, the work year for all employees will be reduced (up to 13 days), with corresponding reduction in pay. Expenditures will be reduced by about the $3.9 million  Pay down of deferral will be eliminated – this would require larger short-term borrowing  Weighted Student Formula will not be implemented 19

Assumptions for Multi-Year Projection 2011-12 2012-13 2013-14 2014-15 COLA 2.24% 3.24% 2.50% 2.70% Deficit Factor -20.602% -22.272% -22.272% -22.272% Funded BRL $4,932 $4,985 $5,110 $5,248 Enrollment 9,273 9,382 9,442 9,409 Enrollment Growth (%) 1.69% 1.18% 0.64% -0.35% ADA 8,902 9,054 9,159 9,174 Attendance Rate 96.0% 96.5% 97.0% 97.5% 20

Assumptions for Multi Year Projection  Contingency language with RCTA will expire at 6/30/2013  Will resume negotiation by January 2013  Step and Column Adjustments is estimated at 1.5%  Health Benefits are projected to increase by 10% each year  Utility costs are projected to increase by 10% each year  Budget cuts needed to maintain minimum reserve  2013/14 - $2 million ongoing  2014/15 – additional $1 million 21

Multi-Year Projection (in thousands) Estimated Preliminary Projected Projected Actual Budget Budget Budget 2011/12 2012/13 2013/14 2014/15 Revenues $80,810 $76,390 $77,463 $79,412 Add: One-time Transfer In 0 1,419 0 0 Total Revenue $80,810 $77,809 $77,463 $79,412 Expenditures 82,675 80,445 80,485 82,093 Budget Cuts- Ongoing (2,000) (2,000) Budget Cuts-Ongoing (1,000) Total Expenditures $82,675 $80,445 $78,485 $79,093 Surplus/(Deficit) ($1,865) ($2,636) ($1,022) 319 Add: Beginning Fund Balance 8,681 6,816 4,180 3,158 Ending Fund Balance $6,816 $4,180 $3,158 $3,477 Less: Designations 1,309 353 121 121 Reserve ($) $5,507 $3,827 $3,037 $3,356 Reserve (%) 6.66% 4.76% 3.87% 4.24% 22

District’s Reserve 23 A 1% reserve is equivalent to about $800K

Challenges and Uncertainties  Result of the ballot initiative for November 2012  Impact of the trigger cuts in the projected years  Cash Flow  Reserve level is at a tipping point – no room for any unplanned expenditures  Increasing cost of health benefits and other operating costs  No salary increases in the last 4 years and possibly in the next 3 years  Sacrifices from all employees  Employees moving to other districts or private sectors 24