Post Election Day Fiscal Analysis & Preliminary First Interim LookNovember 27, 2012
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Presentation Overview
• Opening Remarks• Proposition 30 Impacts• Budget Outlook – LAO Report• SDCOE Guidance for First Interim• Cash Flow Projection/Deferrals• Budget Solutions List – Before Governor’s Budget proposal
• Closing Remarks
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Opening Remarks• Presentation Objectives:– Provide Post Election Fiscal Update to the Board– “Set the Table” for First Interim Report– Obtain Board Feedback/Concurrence for First Interim Strategy
• Uncertain Budget Setting…But Encouraging Way Ahead– Prop 30, Prop Z, LAO Report
• Reality…Still Have Deficits…and New Revenue• The Real Budget Development Begins with the Governors
Proposed Budget – January 2013• Focus: Must Stabilize District Operations and Advance
Collaboration and Communications
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Proposition 30 Highlights
• Proposition 30 2012-13 Budget Impacts– Level Funding in current year 2012-13– No Mid Year 2012-13 reduction…No Shortened
School Year!• No $441 Revenue Limit/ADA or $47.2 M mid-year cut
– Deferral buy down by state will improve cash flow projections in 2013-14, but will not help current year• Anticipate deferral buy down in July and August 2013 for
2012-13 fiscal year
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2013-14 Budget Outlook
• No Specific Budget Guidance Available Until Governor Releases Budget in Early January
• Early Indications Are Promising For Funding Improvements for K-12– COLA and Deficit Factor Changes
• November LAO Report Highlights Positive Signs– Manageable 2013-14 State Deficit– Prospects for budget surpluses in subsequent years
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SDCOE First Interim Guidance
• San Diego County Office of Education (SDCOE) First Interim Guidance– Still urges caution– Will allow flexibility in solutions proposed pending
Prop 30 implementation in January Budget Proposal– Stresses need for adequate reserves to enhance
stability
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Cash Flow Projections
• District Cash Flow Must Remain A Primary Short Term Budget Focus– State deferral schedule changes DO NOT help
2012-13 cash flow– District is at limit of TRANs borrowing– TRANs borrowing for 2013-14 will be constrained• By alternative liquidity limitations
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2012-13 Cash Flow Projection With Prop 30
JUL AUG SEPT OCT NOV DEC 01-05
DEC 06-31
JAN 01-15
JAN 16-30
FEB MAR APR MAY JUN
Actual 82.41445787
97.96758679
38.56740786
57.93636699
NaN NaN NaN NaN NaN NaN NaN NaN NaN NaN
Pro-jected
NaN NaN NaN NaN 53.4198230308
49.3690838808
162.398826831
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92.9359011516
87.1124896612
50.278495612
32.9597866528
11.8528796536
83.6141620344
23.5948127352
$12.5
$37.5
$62.5
$87.5
$112.5
$137.5
$162.5
Mill
ions
Low Cash Balance
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Prop 30 Impact on 2013-14 Deficit
Amount Budget Adjustment
- $92 mil Original budget shortfall for GFU 2013-14
+ $47 mil Additional Prop 30 revenue for GFU 2013-14
- $33 mil Less loss of 14 day furlough savings for GFU 2013-14
- $2 mil Less impact of 1% raise for top of salary schedule (TA) for GFU 2013-14
- $80 mil Revised GFU Budget Shortfall for 2013-14(Projection at Adoption of Revised Budget July 2012 Post TA and Reaffirmed November 2012)
GFU Budget Shortfall for 2013-14
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2013-14 Budget Solutions
• District Required to Submit Solutions List for 2013-14 in First Interim Report to SDCOE
• Solutions List Based on 2012-13 Budget Solutions List Approved by the Board in June 2012
• With Board Concurrence, First Interim Report (SACS) Will Include Solutions List– Superintendent will return to the board in January
with specific recommended adjustments to reflect Governor’s budget proposal
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Budget Solutions List for First Interim Report
2013-14 Budget Solution Category * Reductions in $ Millions
Central Office Reductions:Program reductions, staffing reductions
$5.6 million
School Site Reductions:Adjust for declining enrollment, school realignments, staffing adjustments
$55 million
Other Solutions:Real estate revenues, TRANS savings, Prop Z savings and other funds
$20 million
Total Solutions $80.6 million
* Specific solutions and adjustments will be made based on January Governor’s proposed budget. Notional strategy supports First Interim report.
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Budget Development Timeline
Step Task Date
1 Impact of Proposition 30 Passing to Budget Development - Update
November 27, 2012
2 Board Approval of First Interim Report- BOARD ACTION
December 11, 2012
3 Governors Proposed Budget Released Mid-January, 2013
4 Superintendent Report on 2013-14 Budget Solutions Adjustments
January 22, 2013
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Closing Remarks
• Laser Focus on Stability, Trust, and Team Building• Maintain Solid Communications– Budget numbers will change based on First Interim
Report and Jan-June cycle– Jan proposed budget, Legislative engagement, May
Revision, state approved budget– Update all Stakeholders as Sacramento adjusts
direction• Deal with deficits in transparent, inclusive way• Proceed with First Interim report refinement/finalize