Jim LangstraatChief Financial Officer

503-353-6021 langstraat@nclack.k12.or.us

AgendaReview current budget plan and changes.Review the 2010-11 budget plan.Review the use of one-time dollars and the

availability for future budgets.Review the potential impact of tax initiatives.Review the total difference and range of

impact.

Current Budget PlanBudget was based on a weighted enrollment

and funding from the State for K-12 education at $5.9 billion for the 2009-11 biennium.

Anticipated a fund balance of approximately $6.9 million at the end of 2009 fiscal year.

Anticipated total revenues, including transfers, of about $132.5 million. Budgeted expenditures of $135.8 million.

Anticipated a fund balance at the end of 2010 fiscal year of $3.6 million.

Changes Since June 4, 2009ADMr at the end of October is down 18 students

from projections. Over the past five years ADMr has decreased by an average of 70 over the second half of the year. Should this hold true for the current year the District will be short of projections by 88 students and over $500,000.

The remainder of the revenue picture for 2009-10 remains unchanged. Some concern that interest revenue will be able to meet projections due to lower fund balance and low investment rates.

Changes Since June 4, 2009Expenditures budget increased by $700,000

for increased allocations to schools, new school start up costs, textbook carryover, etc.

Tuition to other Districts remains a concern.Health insurance remains a large concern.

Budgeted for a 10% increase and it may be more.

It is quite possible that fund balance could be depleted by the end of June 2010.

2010-11 Budget PlanIn budget meetings last spring had talked of

raising enrollment figure by 100 for 2010-11. Without strong evidence to the contrary it would be advisable to leave enrollment at actual attendance levels.

August Economic and Revenue Forecast still showed State revenues decreasing form the June Report.

Next Economic and Revenue Forecast will be released in November.

Tax votes on January 26th will inform us of the funding level to anticipate for 2010-11.

One Time Funding Sources The 2009-10 budget was built on using $3.3

million of fund balance. Should any fund balance remain at June 30, 2010 it should be preserved to protect against future uncertainties.

Over $4.7 million of the State School Funding being received from the State is through federal stimulus funding. These funds will be in place for the 2010-11 year but are not guaranteed after that point.

One Time Funding SourcesThe District is utilizing Transfers from

Medicare ($600,000) and Facilities Grant funding ($3,000,000) in 2009-10. Between these funds and E-Rate a similar amount should be available for 2010-11 but will no longer be available after that point.

Education Stability Fund has been drained to “guarantee” K-12 education funding at the $5.8 billion level for the 2009-11 biennium.

Tax InitiativeIn order for K-12 education to receive funding

at the $6.0 billion level for the 2009-11 biennium the State must maintain $300 million in reserves.

Tax initiatives called for increasing the corporate minimum tax and tax on individuals earning more than $125,000 or families earning more than $250,000.

Sufficient votes have been gathered to require a public vote.

Public vote is set for January 26.

Tax InitiativeIf State reserves fall below $300 million in reserves

the shortage will subtract from the $200 million transfer to K-12 education.

The level of State reserves, not the implementation of the tax increases, is the trigger point for K-12 education receiving funding at the $6.0 billion level.

If the economy would continue to worsen it is possible that the tax measures could be implemented and school funding could still be reduced.

The Governor retains the ability to make budget cuts.

Tax InitiativeNorth Clackamas built the 2009-10 budget based

on funding for K-12 education for the 2009-11 biennium at the $5.9 billion level instead of the $6.0 billion level.

If the taxes are upheld the District could receive an additional $1,893,638 for the 2009-10 year.

If the taxes are upheld, the agreements with the certified and classified bargaining units would call for the restoration of two days.

The estimated cost of restoring two days would be $800,000.

Tax Initiative Should the tax increases be defeated and

funding be reduced to the “guaranteed” level of $5.8 billion funding for the 2009-10 year would be decreased by approximately $1.5 million. This reduction may come out of the 2010-11 funding instead of 2009-10.

Range of Impact2009-10 budget is built on total formula revenue

level of $125,814,944 with State funding at $5.9 billion.

Should the tax measures fail, enrollment meet projections, and the State leave funding at the $5.8 billion level then total formula revenues would increase to $129,445,560 for 2010-11.

Should the tax measures be implemented, enrollment meet projections, and the State continue funding at the 6.0 billion level then total formula revenues would increase to $132,921,178 for 2010-11.

Range of Impact Items that could continue to be a draw upon

resources include enrollment decreases, charter schools, tuition to other districts, health insurance, new school start up costs, and any potential State level reductions.

It is unlikely that fund balance will be available for the 2010-11 budget and this leaves a shortfall of $3.3 million.