200506 Budget Presentation

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Vallejo City Unified School District
2005-06Budget Presentation
Board of Education Meeting November 16, 2005
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Table of Contents

• District Goals slide 2
• Budget Goals slide 3
• Outcomes for Budget Report slide 4
• Adopted Budget, June 2005 slide 5
• Budget Modifications for 2005-06 slide 6
• Current Budget Status slide 7
• Factors that could affect budgets slide 8
• 2005-06 Budget Reduction Goal slide 9
• Status of the State Loan slide 10
• Next Steps for VCUSD Budgets slide 11
• Future Budget Goals slide 12
• Appendix School Finance Terms slide 13

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GOALS

• The school district and each school will increase
  annually the number of students who achieve at
  the proficient level or higher on the STAR
  standards testing program.
• The school district and each school will show an
  increase in student achievement of each
  identified underperforming ethnic group that
  represents 5 or more of the student enrollment.
• Each school will improve its climate and student
  discipline so that every student and staff member
  feels safe, every teacher can teach and every
  student can learn.
• The school district will develop a long-term
  solution to the Districts fiscal crisis so that
  we can concentrate on the business of educating
  students, meeting expectations the State has for
  Vallejo, and returning to local control.
• 5) The State Administrator will build the
  capacity of the School District to sustain the
  achievement, fiscal and school climate
  improvements when local control is regained.

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• Budget Goals set in February 2005
• Reduce deficit by 10-12 million from 2004-05
  to 2005-06 budget
• Balance the District budget by the adoption of
  2006-07 budget

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Outcomes for Tonights Budget Presentation

• To provide those in attendance with a clear
  understanding of the following

• Condition of the Budget when adopted (June 2005)
• The changes that have occurred in the 2005-06
  Budget since adoption
• Condition of the 2005-06 Budget today (November
  16, 2005)
• The current Budget deficit
• Factors that may still affect 2005-06 and future
  Budgets

• To provide updated information on the use of
  the State Loan
• To review the Districts progress on fiscal
  recovery (Goal 4) since June 2003

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Adopted Budget As of June 2005 (Unrestricted
General fund Budget Only)
2005-2006
Deficit
Projected Expenditures 90.8M
Projected Income 82.8M
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2005-06 Budget ModificationsChanges to 2005-06
Adopted Budget

• Revenue Increases Revenue Decreases
• 1. Increased Student Attendance 151,000 1.
  Beginning Balance Audit Adj. 1,2000,000
• 16,840 to 16,869.45
• 2. State Budget Deficit Reduction
  221,000 2. Class Size Revenue Reduction
  389,000
• 3. Mandated Cost Reimbursements 100,000 Total
  Revenue Decreases - 1,589,000
• 4. Corbus Field Reimbursement 460,000
• Total Revenue Increases 932,000
• Expenditure Savings Expenditure Increases
• 1. STRS Restoration 1,000,000 1.
  Salary Increases Benefits Cap 266,000
• 2. Encroachments Reduced 500,000 2.
  Additional Debt service on loan 400,000
• 3. Certificated Salary Savings
  1,200,000 3. Workers Compensation claims
  776,000
• 4. Other Program Salary Savings 1,247,000 4.
  Utilities Increase 120,000
• 5. Legal fees reduction
  100,000 Total 1,562,000
• 6. Equipment Reduction 135,000
• Total 4,182,000
• Net Change 932,000 4,182,000 -
  1,589,000 - 1,562,000

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2005-06 Budget Status
2005-2006 Adjusted Budget As of November 16, 2005
2005-2006 Adopted Budget
Deficit
Deficit
Projected Expenditures 90.8M
Projected Expenditures 88.2M
Projected Income 82.2M
Projected Income 82.8M
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Factors that could affect2005-2006 and Future
Budgets

• Student Enrollment and ADA
• State Budget
• Resolution of 2003-04 Audit and Future Audit
  Findings
• Use of Surplus Property to Generate Revenues
• Encroachments from Categorical Programs
• Workers Compensation Liabilities and Costs
• Implementation of Employee compensation
  Agreements in 2006-2007 and 2007-2008
• Program and Service Reductions

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Lets revisit the Budget Reduction Goal . . .

• Budget Deficit Reduction goal for
  2005-06 10-12 million
• 2004-05 Deficit million
• 2005-06 Deficit million
• Reduction in Deficit 10.9 million
• Goal Achieved!

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Status of the State Loan

• State Loan Approved 60 million
• Loan Used to Date to Cover Deficits
• 2003-04 26.3 million
• 2004-05 16.9 million
• 2005-06 (est) 6.0 million
• Total Used 49.5 million
• Projected to be used by June 2006
• To be repaid annually over a 20 year period
  beginning in 2004-05 (approximately 2.9 million
  per year)

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Next Steps
Continue to refine 2005-06 Budget based on actuals
Begin to develop 2006-07 Budget
Implement the Phase I and II Property and Assets
Management Recommendations
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Future Budget Goals
2006-07
To adopt a balanced budget for 2006-07 in June
2006
2007-08
To begin building the required 3 reserve for
economic uncertainties (4.5 million)
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Glossary of School Finance Terms

• Cash Flow Cash available compared to cash
  needed to meet expenditure obligations.
• Fund Balance The difference between assets and
  liabilities. The fund equity of governmental and
  trust funds. Beginning Fund Balance is the
  difference between assets and liabilities carried
  over from the previous year. Denisemissing the
  line about Ending Fund Balance is see what I
  left for you
• Enrollment Enrollment is the actual number of
  students registered with the school district who
  actually attend its schools. This does not mean
  the number of students who are in attendance
  throughout the school district during any given
  period i.e., day, week, month, year. See ADA.
• Average Daily Attendance (ADA) Total approved
  days of attendance in the LEA divided by the
  number of days the schools in the LEA are in
  session for at least the required minimum day.
• Revenue Limit The amount of revenue that a
  district receives annually for unrestricted
  general purposes, usually funded from a
  combination of local property taxes and state
  aid. The amount of revenue a district receives
  is based on a per ADA unit formula

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Glossary of School Finance Terms (cont.)

• Deficit The amount by which a sum of money
  falls short of a required amount e.g.,
  apportionment deficits or budget deficits.
• Deficit Factor When the states appropriation
  for K-12 education is too low to pay all claims
  for state aid, a deficit factor is applied to
  reduce state aid.
• Equalization Extra state aid, when available,
  provided to low revenue districts, to promote
  revenue equalization among districts
• Categorical Reform The Governor and some
  legislators have proposed creating block grants
  in place of individual programs (impact is
  unknown at this time)
• Ongoing and Deferred Maintenance To receive
  State funding for school construction, each
  district must annually spend 3 of its general
  fund budget to maintain facilities.
• Encroachment The expenditure of school
  districts general purpose funds in support of a
  specialized or categorical program. Encroachment
  occurs in most districts and county offices that
  provide special education and transportation

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Glossary of School Finance Terms (cont.)

• Assets Resources that are held or accrued by a
  School District and that have monetary value
  i.e., cash, receivables, land, buildings major
  equipment.
• Liabilities Legal obligations that are unpaid,
  i.e., goods or services that have been received
  but not paid, or revenue received that has not
  been earned.
• Cash Flow Cash generated through revenues and
  expended in operation of school district.

• COLA Cost of-Living Adjustment, usually
  applied to Revenue Limit and most categorical
  programs