third interim
DESCRIPTION
Presented at the School Board Meeting on May 9, 20TRANSCRIPT
Devin Vodicka, EdD
Assistant Superintendent, Business Services
May 9, 2012
5/3/2012 1
California’s Education Spending Continues to Lag
-$3,000
-$2,600
-$2,200
-$1,800
-$1,400
-$1,000
-$600
-$200
$200
$600
Cal
ifo
rnia
’s S
pen
din
g P
er S
tud
ent
Min
us
Sp
end
ing
Per
Stu
den
t in
th
e R
est
of
U.S
.
California’s K-12 Spending Per Student Lags BehindThat of the Rest of the U.S. More Than at Any Time in 40 Years
* 2010-11 data estimatedNote: Rest of U.S. excludes the District of Columbia
Source: National Education Association
-$2,856 (est.) per student loss in 2010-11
National Average
Choices and Priorities Matter
California demands and deserves a “world-class” education system
The top five states, in terms of student performance, are Vermont, Rhode Island, Wyoming, New Jersey, and Maine
The bottom five are California, Idaho, Mississippi, Nevada, and Arizona
What’s different?
California has fallen from number one to number 46 in per-ADA funding; and the results bear that out
Top Five Bottom
Five
Per-student spending
$16,000 – $22,000
$6,700 – $8,700
Percent of state resources
4.2% – 6.0%
3.2% – 3.9%
4th Grade NAEP* 32% – 44% 22% – 33%
8th Grade NAEP* 34% – 47% 19% – 37%
*National Assessments of Educational Progress
Data from
http://www.ed-data.k12.ca.us
Most recent data available is from 2009-10
San Diego County: Revenue Per Student Comparison
5/3/2012 4
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.
Background Information
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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 million
Current Information
5/3/2012 6
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.
Major Changes: Revenues
5/3/2012 7
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
Major Changes: Revenue
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.
Major Changes: Expenditures
5/3/2012 9
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”.
Major Changes: Expenditures
5/3/2012 10
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
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
Major Changes: Expenditures
2011-12
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2012-13
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How Did We Get Here?
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CUSD Revenue, Expenditures, and Reserves
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 $77,020,805
$-
$10,000,000.00
$20,000,000.00
$30,000,000.00
$40,000,000.00
$50,000,000.00
$60,000,000.00
$70,000,000.00
$80,000,000.00
$90,000,000.00
$100,000,000.00
Average Daily Enrollment
2009 2010 2011 Adopted 2012
ADA 10317 10417 10593 10596
9000
9200
9400
9600
9800
10000
10200
10400
10600
10800
11000
AD
A
5/3/2012 17
Revenue Increases One-Time Expenditure Reductions
Ongoing Expenditure Reductions
• “Fair Share” Recalculation (subject to change)
• NCCSE Equalization • Donations
• Reducing deferred maintenance contributions.
• Reduce start-up spending in 2012-13 for Sage Creek High School
• Reduce Sage Creek Expenditures in 2013-14 • Reduction in Travel and Conference
budgets • Reduction in Site/Department accounts • Reduction in Special Education budget
based on program savings • Reduce Tier III Certificated Non-
instructional Hourly • Reduce Personnel Commission
Discretionary Budget • Reclassification of maintenance expenses • LIUNA Fair Share Benefit/Salary
Reductions • Management Compensation Reductions • Teacher layoffs necessary to cover CUTA
“Fair Share” portion of projected deficit • Blue Shield Credits
• Increasing class size in grades 1-3 to approximately 32 students in each class.
• Eliminating K-6 Home Study program. • Eliminating one Director of Curriculum &
Instruction position. • Eliminating the Administrative Assistant—
Language Assessment Center position. • Eliminating one English Language
Development Resource Teacher. • Elimination of general education summer
school (K-8) and reduction of general education summer school (high school).
• Eliminating two part-time certificated librarians.
• Elimination of Admin Assistant to AP • Elimination of Accompanist • Reduction in Athletics budget • Reduction or elimination of programs such
as Cal-SAFE and Add-Up • Reduce CVA by 2.0 Full-Time Equivalent
(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 savings
5/3/2012 18
Kindergarten (Half-Day CSR)
1st-3rd Grade
4th-5th Grade
6th-8th Grade
9th-12th Grade
2009-10 32 20 32 33 34
2010-11 32 22 32 33 34
2011-12 32 32 32 33 34
2012-13 (projected)
33 32 32 33 38.5
2013-14 (projected)
33 32 36 36 38.5
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Class Sizes
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Consideration for Reduction Expenditure Category Outcome
Group 1: Strong Sage Creek Delay Budget compressed for 2012-13 and 2013-
14
Reduce/Eliminate Admin/Management
Done
Reduce/Eliminate Stipends Done
Employee Compensation Reductions
CUTA Negotiations in process
LIUNA TA Completed
Management Notices Completed
Reduce/Eliminate Travel & Conference
Done
Reduce/Eliminate Site and Department Accounts
Done
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 Positions
Done
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 21
Deficit Spending Problem
2010 2011 May-12 Proj 2013
Deficit Spending $(1,749,345.00) $(1,665,203.00) $(7,361,723.00) $(4,080,530.00)
Cumulative Deficit Spending $(1,749,345.00) $(3,414,548.00) $(10,776,271.00) $(14,856,801.00)
$(16,000,000.00)
$(14,000,000.00)
$(12,000,000.00)
$(10,000,000.00)
$(8,000,000.00)
$(6,000,000.00)
$(4,000,000.00)
$(2,000,000.00)
$-
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 fails
What Now?
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It is respectfully recommended that the Board of
Trustees approve submission of the Third Interim Report with certification of “qualified” financial condition, as presented.
Recommendation
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