Devin Vodicka, EdD           Assistant Superintendent, Business Services                          May 9, 20125/3/2012     ...
California’s Education Spending                                                                     Continues to Lag      ...
Choices and Priorities Matter California demands and                                       deserves a “world-class”     ...
San Diego County:           Revenue Per Student Comparison                               Data from      http://www.ed-  ...
Background Information                  First Interim presented in December 2011;      represented Financial Condition t...
Current Information                           CUSD remains “qualified” as we are able to meet current financial      com...
Major Changes: Revenues                                  Special Education Transportation – State Funding:      Revenue ...
Major Changes: Revenue                                 Local Income (Interest, facility use fees, District      rentals,...
Major Changes: Expenditures                                      PERS Increase: FY 2011-12 rate is 10.92303%. Due to    ...
Major Changes: Expenditures                                  Retiree Benefits: Projected premium increases      effectiv...
Major Changes: Expenditures                                      Recent Expenditure Reductions: On April 18, 2012, the B...
Major Changes: Expenditures                                  Contribution to Restricted Programs: Special      Education...
2011-12             5/3/2012             13
2012-13             5/3/2012             14
How Did We Get Here?              5/3/2012                     15
CUSD Revenue, Expenditures,                 and Reserves      $100,000,000.00                                             ...
Average Daily Enrollment                                           11000            10800            10600            104...
Revenue Increases                            One-Time                                        Ongoing Expenditure          ...
Class Sizes                                                       Kindergarten 1st-3rd   4th-5th   6th-8th   9th-12th    ...
Consideration for Reduction       Expenditure Category                        Outcome           Group 1: Strong           ...
Deficit Spending Problem                                  $-                                                             ...
What Now?                                 Conclude CUTA Negotiations            Path A: Agree on furlough days with con...
5/3/2012       23
5/3/2012       24
Recommendation                      It is respectfully recommended that the Board of      Trustees approve submission of...
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Third Interim

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Presented at the School Board Meeting on May 9, 20

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Third Interim

  1. 1. Devin Vodicka, EdD Assistant Superintendent, Business Services May 9, 20125/3/2012 1
  2. 2. California’s Education Spending Continues to Lag $600  California’s K-12 Spending Per Student Lags Behind That of the Rest of the U.S. More Than at Any Time in 40 Years National AverageCalifornia’s Spending Per Student Minus Spending $200 -$200 Per Student in the Rest of U.S. -$600 -$1,000 -$1,400 -$1,800 -$2,200 -$2,600 -$2,856 (est.) per student loss in 2010- 11 -$3,000 * 2010-11 data estimated Note: Rest of U.S. excludes the District of Columbia Source: National Education Association
  3. 3. Choices and Priorities Matter California demands and  deserves a “world-class” Bottom education system Top Five The top five states, in terms Five of student performance, are Vermont, Rhode Island, Per-student $16,000 – $6,700 – Wyoming, New Jersey, and spending $22,000 $8,700 Maine The bottom five are Percent of state 4.2% – 3.2% – California, Idaho, Mississippi, Nevada, and resources 6.0% 3.9% Arizona What’s different? 4th Grade NAEP* 32% – 44% 22% – 33% California has fallen from number one to number 46 in 8th Grade NAEP* 34% – 47% 19% – 37% per-ADA funding; and the *National Assessments of Educational Progress results bear that out
  4. 4. San Diego County: Revenue Per Student Comparison   Data from http://www.ed- data.k12.ca.us  Most recent data available is from 2009-105/3/2012 4
  5. 5. Background Information   First Interim presented in December 2011; represented Financial Condition through October 31, 2011  Second Interim presented in March 2012; represented Financial Condition through January 31, 2012  Reflected updated estimates of revenues, expenditures, and ending balance components for current fiscal year.5/3/2012 5
  6. 6. Current Information   CUSD remains “qualified” as we are able to meet current financial commitments for the remainder of this fiscal year but not for the two subsequent years  As a result, the Third Interim report is required by the County Office of Education.  Reflects updated information through April 30, 2012.  Projected deficits:  2012-13: $0  Includes layoff of required number of certificated personnel to make up for CUTA “Fair Share” of projected deficit  Includes layoff of additional certificated personnel to ensure financial balance in the event of midyear cuts  Includes savings from LIUNA Tentative Agreement and Management Compensation Reductions.  2013-14: $10.4 million5/3/2012 6
  7. 7. Major Changes: Revenues   Special Education Transportation – State Funding: Revenue of $137,000/year cut by State action effective 2013-14. Increased district contribution to program operations to offset loss of funding.  Federal Revenues: In FY 2011-12, recognized receipt of one-time Federal Education Jobs funds totaling $30,500; lowered Title II award for current year to permit “carryover” of $35,000 to cover operations in FY 2012-13.5/3/2012 7
  8. 8. Major Changes: Revenue   Local Income (Interest, facility use fees, District rentals, miscellaneous income, etc.): Lowered current and future projected interest earnings to 0.50%. Budget affected by ($75,000) per year.  Other Local Income (donations, grade camp funds, etc.): Since Second Interim, an additional $202,296 received to date in donations and other reimbursements. For next two years, only $80,000 projected in donations each year from Educational Foundation; all other donations are recognized upon receipt.5/3/2012 8
  9. 9. Major Changes: Expenditures   PERS Increase: FY 2011-12 rate is 10.92303%. Due to State economic conditions, the PERS investment portfolio has suffered significant losses. Latest CalPERS school employer contribution rate is projected to be 11.81% effective FY 2012-13 and beyond. CalPERS Board is expected to take action to adopt final rate for 2012-13 at its May 16, 2012 meeting.  Other Labor Related Cost Changes: Late March 2012, SDCOE JPA announced Worker’s Comp rate for district would be reduced from 1.74% to 1.62% for next year. In April 2012, SDCOE announced Unemployment Insurance Tax Rate would reduce from 1.61% to 1.10% effective FY 2012-13. Both changes are included herein.5/3/2012 9
  10. 10. Major Changes: Expenditures   Retiree Benefits: Projected premium increases effective January 1, 2012 based on current number of retirees. An additional 20 more retirees--qualifying for benefits until age 65 from all employee groups-- are projected effective July 1, 2012. Cost for additional retirees is projected at $300,000 beginning FY 2012-13. OPEB liability is “pay-as-you-go”.5/3/2012 10
  11. 11. Major Changes: Expenditures   Recent Expenditure Reductions: On April 18, 2012, the Board of Trustees approved reorganizing site operations at Carlsbad Village Academy. Subsequently, the District settled compensation negotiations with LIUNA, the classified employee group. Savings from these actions are reflected herein.  Other Expenditure Reductions: Earlier this year, Board action included layoff notices to over 100 teachers. To balance budget for Third Interim purposes, the District has cut the budget by an appropriate number of teacher FTEs. Management, confidential, and supervisory employees were formally noticed of salary and/or work day reductions effective July 1, 2012. This budget cut is also incorporated herein.5/3/2012 11
  12. 12. Major Changes: Expenditures   Contribution to Restricted Programs: Special Education and Special Education Transportation: Due to dissolution of most NCCSE funded regional classes effective FY 2012-13, the district will lose reimbursement of $149,000 for one regional class. On March 28, 2012, the Board approved transportation bid reducing service costs by over $1M. Pending final student counts, gas prices, etc, the transportation budget was reduced by $920,000.5/3/2012 12
  13. 13. 2011-12 5/3/2012 13
  14. 14. 2012-13 5/3/2012 14
  15. 15. How Did We Get Here? 5/3/2012 15
  16. 16. CUSD Revenue, Expenditures, and Reserves $100,000,000.00  $90,000,000.00 $80,000,000.00 $70,000,000.00 $60,000,000.00 $50,000,000.00 $40,000,000.00 $30,000,000.00 $20,000,000.00 $10,000,000.00 $- 2006 2007 2008 2009 2010 2011 May-12 Proj 2013 Reserve $7,290,197. $9,709,801. $13,011,027 $18,462,237 $16,712,892 $15,047,689 $7,685,966. $3,605,436. Revenue $71,585,198 $81,515,019 $86,118,839 $87,826,266 $85,934,756 $82,598,872 $74,284,010 $72,940,275 Expenditures $72,003,526 $78,516,236 $82,817,613 $83,895,662 $87,684,101 $84,264,075 $81,645,733 $77,020,8055/3/2012 16
  17. 17. Average Daily Enrollment  11000 10800 10600 10400 10200 ADA 10000 9800 9600 9400 9200 9000 2009 2010 2011 Adopted 20125/3/2012 ADA 10317 10417 10593 10596 17
  18. 18. Revenue Increases One-Time Ongoing Expenditure Expenditure Reductions Reductions • “Fair Share” Recalculation (subject to • Reducing deferred maintenance • Increasing class size in grades 1-3 to change) contributions. approximately 32 students in each class.  • NCCSE Equalization • Reduce start-up spending in 2012-13 for • Eliminating K-6 Home Study program. • Donations Sage Creek High School • Eliminating one Director of Curriculum & • Reduce Sage Creek Expenditures in 2013-14 Instruction position. • Reduction in Travel and Conference • Eliminating the Administrative Assistant— budgets Language Assessment Center position. • Reduction in Site/Department accounts • Eliminating one English Language • Reduction in Special Education budget Development Resource Teacher. based on program savings • Elimination of general education summer • Reduce Tier III Certificated Non- school (K-8) and reduction of general instructional Hourly education summer school (high school). • Reduce Personnel Commission • Eliminating two part-time certificated Discretionary Budget librarians. • Reclassification of maintenance expenses • Elimination of Admin Assistant to AP • LIUNA Fair Share Benefit/Salary • Elimination of Accompanist Reductions • Reduction in Athletics budget • Management Compensation Reductions • Reduction or elimination of programs such • Teacher layoffs necessary to cover CUTA as Cal-SAFE and Add-Up “Fair Share” portion of projected deficit • Reduce CVA by 2.0 Full-Time Equivalent • Blue Shield Credits (FTE) Teachers • Increase staffing ratio at CHS to 38.5 • Eliminate 1.0 Librarian • Eliminate .4 FTE Psychologists • Eliminate 1.0 FTE Executive Assistant, Business Services • Eliminate 1.0 FTE Custodian • Reorganization of CVA/CSA • Reduce Administration/Management expenses • Eliminate Kontraband Contract • Reduce School Resource Officer Contract • Reduce Write4Fun Contractual by 25% • Leaving vacant two Instructional Aide— Computer Lab positions. • Transportation savings5/3/2012 18
  19. 19. Class Sizes  Kindergarten 1st-3rd 4th-5th 6th-8th 9th-12th (Half-Day Grade Grade Grade Grade CSR) 2009-10 32 20 32 33 34 2010-11 32 22 32 33 34 2011-12 32 32 32 33 34 2012-13 33 32 32 33 38.5 (projected) 2013-14 33 32 36 36 38.5 (projected)5/3/2012 19
  20. 20. Consideration for Reduction Expenditure Category Outcome Group 1: Strong Sage Creek Delay Budget compressed for 2012-13 and 2013- 14 Reduce/Eliminate Done Admin/Management  Reduce/Eliminate Stipends Done Employee Compensation CUTA Negotiations in process Reductions LIUNA TA Completed Management Notices Completed Reduce/Eliminate Travel & Done Conference Reduce/Eliminate Site and Done Department Accounts Reduce Special Ed Done Reduce Textbook Expenses Not feasible—we spend only $20 per student per year Group 2: Moderate Closing School(s) Reorganization of CVA/CSA Reduce/Eliminate Classified Done Positions Reduce/Eliminate Athletics Done Reduce/Eliminate Contractual Done Reduce/Eliminate Programs Done Reduce Instructional Days CUTA Negotiations in Process Group 3: Low Increase Class Size—Elementary Grades 4-5 increase to 36 in 2013-14 Increase Class Size—Middle Increase to 36 in 2013-14 Increase Class Size—High School Increase to 38.5 in 2012-13 Reduce/Eliminate Guidance Reduce 1.0 Counselor (CVA/CSA)5/3/2012 20
  21. 21. Deficit Spending Problem $-  $(2,000,000.00) $(4,000,000.00) $(6,000,000.00) $(8,000,000.00) $(10,000,000.00) $(12,000,000.00) $(14,000,000.00) $(16,000,000.00) 2010 2011 May-12 Proj 2013 Deficit Spending $(1,749,345.00) $(1,665,203.00) $(7,361,723.00) $(4,080,530.00)5/3/2012 Cumulative Deficit Spending $(1,749,345.00) $(3,414,548.00) $(10,776,271.00) $(14,856,801.00) 21
  22. 22. What Now?   Conclude CUTA Negotiations  Path A: Agree on furlough days with contingency language and rescind layoff notices  Path B: Continue with layoffs until negotiated agreement is reached  Implement LIUNA Benefit Restructuring  Revenue Enhancements  Aggressive fiscal conservation  Anticipate new round of expenditure reductions next year  Approximately $5 million if Governor’s November tax initiative passes  Over $10 million if Governor’s November tax initiative fails5/3/2012 22
  23. 23. 5/3/2012 23
  24. 24. 5/3/2012 24
  25. 25. Recommendation   It is respectfully recommended that the Board of Trustees approve submission of the Third Interim Report with certification of “qualified” financial condition, as presented.5/3/2012 25

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