second interim report 2012-13
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Second Interim ReportSecond Interim Report2012-132012-13
Anaheim City School DistrictAnaheim City School District
March 15, 2013March 15, 2013
Darren DangDarren DangAssistant Superintendent, Administrative ServicesAssistant Superintendent, Administrative Services
TopicsTopics
Proposition 30Proposition 30 Local Control Funding FormulaLocal Control Funding Formula Financial Status (Second Interim)Financial Status (Second Interim) Cash Flow ConcernsCash Flow Concerns Help ACSD Balance Our BudgetHelp ACSD Balance Our Budget
3/13/133/13/13 22
Passage of Proposition 30Passage of Proposition 30 A Big Thank You for your support to A Big Thank You for your support to
public educationpublic education Prevented cuts of $420 / student or Prevented cuts of $420 / student or
$7.9M$7.9M No new money for 2012-13 but did free No new money for 2012-13 but did free
up money for the state to spend in up money for the state to spend in 2013-142013-14
Per student funding for 2012-13 is still Per student funding for 2012-13 is still 10% below 2007-08 level10% below 2007-08 level
33
Local Control Funding FormulaLocal Control Funding Formula
44
LCFFLCFF WSF
Favors low income districts
Favors low income districts
Tiered FundingTiered
Funding
Restores Deficit & Deferrals
Restores Deficit & Deferrals
1st year 2013-14: $6,678 per ADA
1st year 2013-14: $6,678 per ADA
$416/ADA increase
($7.7M) in 1st year
$416/ADA increase
($7.7M) in 1st year
Full implemen
tation: 2020-21 $11,656
Full implemen
tation: 2020-21 $11,656
1st year 2012-13: $6,445
per ADA
Proposal wasn’t
adopted
Full implemen
tation: 2017-18 $12,162
LCFF = Local Control Funding Formula. WSF = Weighted Student Funding.
$6,940 for 2013-14
LCFF – Managing ExpectationsLCFF – Managing Expectations If adopted, ACSD will benefit from the Local If adopted, ACSD will benefit from the Local
Control Funding FormulaControl Funding Formula Policy Committee could delay Policy Committee could delay
implementation to 2014-15 implementation to 2014-15 Governor’s January Proposal is just the very Governor’s January Proposal is just the very
first step of long journeyfirst step of long journey A lot of things could change, and probably A lot of things could change, and probably
will, between now and thenwill, between now and then Budgeting 1.65% COLA, $1.5M instead of Budgeting 1.65% COLA, $1.5M instead of
$7.7M LCFF$7.7M LCFF
55
Multi-Year Financial SummaryMulti-Year Financial Summary2012-13 2012-13
22ndnd Interim Interim2013-142013-14
ProjectedProjected2014-152014-15
ProjectedProjected
Total RevenueTotal Revenue $152,253,146$152,253,146 $153,330,370$153,330,370 $156,790,659$156,790,659
Total Expend. Total Expend. $158,067,611$158,067,611 $163,237,883$163,237,883 $169,814,745$169,814,745
Net changeNet change ($5,814,465)($5,814,465) ($9,907,513)($9,907,513) ($13,024,086)($13,024,086)
Beg. BalanceBeg. Balance $21,990,983$21,990,983 $16,176,518 $16,176,518 $6,269,005$6,269,005
Ending Bal.Ending Bal. $16,176,518$16,176,518 $6,269,005$6,269,005 ($6,755,081)($6,755,081)
Economic Economic UncertaintiesUncertainties
$4,742,028$4,742,028
3%3%$4,897,136$4,897,136
3% 3% $5,094,442$5,094,442
3%3%
Designated Designated FundsFunds $2,784,476$2,784,476 $2,869,077$2,869,077 $2,806,682$2,806,682
Undesignated / Undesignated / (Shortfall)(Shortfall) $8,650,014$8,650,014 ($1,497,208)($1,497,208) ($14,656,205)($14,656,205)
66
Why Expenditures Increase By Why Expenditures Increase By $5.1M in 2013-14 $5.1M in 2013-14
3/13/133/13/13 77
No Furlough Days (restored No Furlough Days (restored 8 furlough days in 2012-13 8 furlough days in 2012-13 to 0 for 2013-14)to 0 for 2013-14)
+$4.0 M+$4.0 M
Step and Column IncreasesStep and Column Increases +$1.3 M+$1.3 M
Other AdjustmentsOther Adjustments - $0.2 M- $0.2 M
Total Expenditure IncreaseTotal Expenditure Increase ++$5.1 M$5.1 M
Why Expenditures Increase By Why Expenditures Increase By Another $6.6M in 2014-15 Another $6.6M in 2014-15
3/13/133/13/13 88
Class size restored to 28:1 Class size restored to 28:1 per contractual agreementper contractual agreement +$3.2 M+$3.2 M
Step and Column IncreasesStep and Column Increases +$1.3 M+$1.3 M
10% Health & Welfare 10% Health & Welfare IncreaseIncrease +$2.0 M+$2.0 M
Other AdjustmentsOther Adjustments +$0.1 M+$0.1 M
Total Expenditure IncreaseTotal Expenditure Increase ++$6.6 M$6.6 M
Multi-Year Financial SummaryMulti-Year Financial Summary Even with 8 furlough days this year, ACSD is Even with 8 furlough days this year, ACSD is
overspending by $5.8 Millionoverspending by $5.8 Million Next year 2013-14, expenditures exceed income by Next year 2013-14, expenditures exceed income by
$9.9 Million$9.9 Million– After depleting our reserve savings of $8.5 Million, still After depleting our reserve savings of $8.5 Million, still
short $1.5 Millionshort $1.5 Million In 2014-15, expenditures exceed income by $13 In 2014-15, expenditures exceed income by $13
MillionMillion– Budget shortfall of $14.7 Million over next two Budget shortfall of $14.7 Million over next two
yearsyears If Local Control Funding Formula is adopted, it will If Local Control Funding Formula is adopted, it will
solve our revenue problem but we can’t count on it.solve our revenue problem but we can’t count on it.
3/13/133/13/13 99
How Did We Get HereHow Did We Get Here
Significant Declining Enrollment Significant Declining Enrollment – Lost over 3,000 students since 2001-02Lost over 3,000 students since 2001-02
State Funding Cuts Over Last 5 yearsState Funding Cuts Over Last 5 years– $50 Million in total State funding cuts $50 Million in total State funding cuts
Increasing Special Education CostsIncreasing Special Education Costs– Federal Government underfunding Federal Government underfunding
Special Education by a total of $109M Special Education by a total of $109M over last 10 yearsover last 10 years
Deficit SpendingDeficit Spending
3/13/133/13/13 1010
Unsustainable Structural Unsustainable Structural Budget ProblemBudget Problem
1111
Impact of Deficit Spending: Impact of Deficit Spending: Diminishing CashDiminishing Cash
1212Source: Orange County Department of Education
$27.
0
$27.
6
$26.
1
$16.
7
$11.
9
$10.
7
$5.3
$30.
2
$34.
6
$32.
7
$27.
9
$17.
8
$21.
3
$22.
0
89.6% 79.7%79.9%
59.6% 67.1%
50.2%
24.1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Cash
as
a Pe
rcen
tage
of E
ndin
g Fu
nd B
alan
ce
Cash
and
End
ing
Fund
Bal
ance
(in
Mill
ions
)
Anaheim City School DistrictComparison of General Fund Cash and Ending Fund Balance
Cash Ending Fund Balance Cash as a % of Ending Fund Balance
$27.6$26.1
$15.7
$9.9
-$7.3
-$3.4
-$6.5-$10.0
-$5.0
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Mill
ions
Cash Balance Without Loans or Transfers
Cash Balance Without BorrowingCash Balance Without Borrowing
1313
projected
($6.5)
($2.6)
($5.6)($7.3)
($12.5)($14.7)
$9.4
$0.7
($6.8)($8.9)
$5.4
($3.9)
($12.9)
$(20)
$(15)
$(10)
$(5)
$-
$5
$10
$15
BeginningCash
July Aug Sept Oct Nov Dec Jan Feb March April May June
Mill
ions
2013-14 Monthly Ending Cash Without Borrowing
Precarious 2013-14 Cash SituationPrecarious 2013-14 Cash Situation
1414
Note: Need to add additional working capital reserve of $8.5 M
Note: Need to add additional working capital reserve of $8.5 M
Cash Flow PrognosisCash Flow Prognosis Chronic Deficit Spending over past 5 years Chronic Deficit Spending over past 5 years
has slowly depleted our cash reserveshas slowly depleted our cash reserves It will take us multiple years to address our It will take us multiple years to address our
cash problemcash problem Margin for error is razor thin in 2013-14Margin for error is razor thin in 2013-14 Continued deficit spending will put ACSD at Continued deficit spending will put ACSD at
serious risk for cash insolvency in 2014-15serious risk for cash insolvency in 2014-15 We need to have a plan to address deficit We need to have a plan to address deficit
spending until our revenue problem spending until our revenue problem improvesimproves
1515
We Need Your HelpWe Need Your Help
While we are hopeful that the While we are hopeful that the Governor’s proposal will help solve Governor’s proposal will help solve our $14.7 Million problem,our $14.7 Million problem,
We need to have a balanced budget We need to have a balanced budget over the next two yearsover the next two years
We need your help with ideas:We need your help with ideas:– Email to: Email to: budget@acsd.us
3/13/133/13/13 1616
For More InformationFor More Information
http://www.acsd.k12.ca.us/http://www.acsd.k12.ca.us/
3/13/133/13/13 1717
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