Impact of the Governor’s Proposed Budget

on the AUSD

The AUSD Response

February 26, 2008

AUSD Goals and Core Values

AUSD Goals 2006-2009• Narrow and close the achievement gap in English language arts and

Mathematics between our lowest performing students and our highest performing students, while increasing or maintaining the performance of any group performing at the proficient or advanced level.

• Align the spending plan with educational objectives while ensuring the highest and best use of limited resources and long-term solvency.

• Ensure all students will be in educational environments that are safe and conducive to learning.

• Recruit and retain highly qualified and diverse staff, and provide systems of support for and recognition of all employees.

AUSD Core Values• Support student achievement by promoting efficiency, communications, and

responsibility.• Preserve fiscal integrity and responsibility.• Recruit and retain highly qualified competitively compensated employees.

Criteria for Spending Reductions & Resource Reallocation

• Maintain core academic programs for students to ensure students graduate high school

• Ensure campuses are safe for students and staff • Shift expenditures to grants to other funding

sources where possible• Work with employee groups regarding negotiated

items• Comply with necessary local, state, and federal

mandates

Impact on Pathway to Excellence and Equity

Process for two-way communication

SUPERINTENDENT

EXTENDED CABINETWORKGROUPS

SOUNDING BOARD(community)

SUPT’S COUNCIL(employee groups)

BOARD OF EDUCATION

SUPERINTENDENT’S RECOMMENDATIONS

Timeline of meetings

• Extended Cabinet Workgroups: – February 1, 4, 8, 11, 14

• Superintendent’s Council Meetings:– February 6, 13, 21

• Sounding Board Meetings:– February 7, 14, 21

• Board Meetings:– February 4, 26 (Info), March 4 (Action), 11

Certificated & non-certificated staff Planning for 2008-09

• January 18 Due to HR - Planning and staffing notification forms from teachers-identify needs for the 08-09 school year.

• February 7 Due to HR Non- reelect list • March 1 Due to HR Certificated employees Leave of

Absence intentions for 08-09• March 4 Special BOE Meeting• March 11 Resolution to the BOE to vote on

staffing reductions• March 14 Ed Code Law requires that all certificated

teachers and administrators must be noticed• April AUSD Non- certificated Employees will be

Notified of Potential Lay offs per Ed Code 45117

Suspending Proposition 98

Proposition 98 Appropriations(Billions)

55.156.7

59.7

55.6

50

52

54

56

58

60

62

FY06/07 FY07/08 FY08/09(Minimum

Guarantee)

FY08/09(Governor'sProposal)

Loss of $4B

Suspending Proposition 98

AUSD Base Revenue Limit

$5,525

$5,777

$6,065

$5,641

$5,000

$5,400

$5,800

$6,200

FY06/07 FY07/08 FY08/09(MinimumGuarantee)

FY08/09(Governor'sProposal)

Loss of $4M

Multi-Year ProjectionsAs of FY07/08 First Interim

FY07/08 Projection

FY08/09 Projection

FY09/10 Projection

Revenues 83,755,624 86,552,977 87,325,387

Expenditures 86,870,395 84,970,470 86,467,560

Other Sources (Uses) (435,906) (435,906) (435,906)

Net Inc/Dec in Fund Balance (3,550,677) 1,146,602 421,920

Beginning Balance 7,666,016 4,115,339 5,261,940

Ending Balance 4,115,339 5,261,940 5,683,861

Components of Ending Balance

Revolving Cash 50,000 50,000 50,000

For Economic Uncertainties 2,619,189 2,562,191 2,607,104

Legally Restricted Balance - - -

Mandate Cost Reimbursement 1,080,000 1,080,000 1,080,000

P2 ADA 137,207 - -

Available Unrestricted Reserve 228,943 1,569,749 1,946,757

Available for spending

priorities – compensation increases, new programs and

program expansions,

Multi-Year Projections As of FY08/09 Governor’s Budget

FY07/08 Projection

FY08/09 Projection

FY09/10 Projection

Revenues 83,480,865 82,432,304 83,613,268

Expenditures 86,870,395 85,027,949 86,565,050

Other Sources (Uses) (435,906) (435,906) (435,906)

Net Inc/Dec in Fund Balance (3,825,436) (3,031,550) (3,387,687)

Beginning Balance 7,666,016 3,840,580 809,029

Ending Balance 3,840,580 809,029 (2,578,658)

Components of Ending Balance

Revolving Cash 50,000 50,000 50,000

For Economic Uncertainties 2,619,189 2,563,916 2,610,029

Legally Restricted Balance - - -

Mandate Cost Reimbursement 1,080,000 1,080,000 1,080,000

P2 ADA 137,207 - -

Available Unrestricted Reserve (45,816) (2,884,886) (6,318,686)

Available for spending

priorities – compensation increases, new programs and

program expansions,

What happened to the fund balance?

Available Unrestricted Reserve As of 1st Interim (Dec 11, 2007)

1,569,749

Deficit Factor of 0.5% - Revenue Limit (274,759)

Increase in COLA of 0.64% - Revenue Limit 354,381

Increase in COLA of 0.64% - Class Size Reduction 21,690

Deficit Factor of 6.99% – Revenue Limit (4,032,329)

Deficit Factor of 10.9% – Class Size Reduction (236,893)

Deficit Factor of 10.9%– Special Education (285,000)

Change to 3% Reserve (1,724)

Available Unrestricted Reserve As of Governor’s Proposed Budget (Jan 10, 2008)

(2,884,886)

Decrease

of $4.5M

What can the AUSD do?

• Increase Revenue

• Reduce Expenditures

• Negative Certification

• Combination

Overview of Recommendations and Actions

Item Amount FY

1. Modify Classroom Staffing

2. Reduce Secondary Counseling Services

3. Adjust Secondary School Staff

4. Eliminate Support for Athletic Programs

5. Reduce MOF Services

6. Adjust District Office Support

7. Defer On-Going Spending Reductions for One Yr

8. Enhance Revenue

9. Shift Spending

10. Reduce MOF

11. Reduce District Office Support

12. Restructure K-12 Program

393.0

90.0

140.0

465.0

125.0

19.0

-

60.0

375.0

50.0

21.3

2,261.7

FY08/09

FY08/09

FY08/09

FY08/09

FY08/09

FY08/09

FY08/09

FY08/09

FY08/09

FY08/09

FY08/09 FY09/10

Total 4,000.0

Overview of Recommendations and Actions

Year 1 – FY08/09 Amount

Spending Shifts and Reductions 1.7M

Spend Reserves – One-Time Mandate Cost

Reimbursement Set-Aside

1.1M

Spend Reserves – Undesignated Available 1.6M

Total 4.4M

Year 2 – FY09/10

Spending Reductions - Restructure K-12 Program (i.e., School Closures, Class Size, Counseling Services)

2.3M

FY08/09 Recommendations

Item Cut/ shift

Superintendent’s Recommendation

1. MODIFY CLASSROOM STAFFING

a. Reduce Class Size Reduction (CSR) - Grade 9 Cut 92.0K

b. Eliminate JROTC Cut 61.0K

c. Eliminate 0.5 FTE Independent Study Teacher Cut 40.0K

d. Eliminate Elementary Grades 1-3 Music Prep Positions

Cut 200.0K

2. REDUCE SECONDARY COUNSELING SERVICES

a. Reduce Middle School (MS) Counselors Cut 90.0K

Cut = Spending Decrease/Service Reduction or Elimination; Shift = Spending transferred to categorical funds

FY08/09 Recommendations

Item Cut/ shift

Superintendent’s Recommendation

3. ADJUST SECONDARY SCHOOL STAFF

a. Eliminate 1 Vice Principal at Encinal HS Cut 95.0K

b. Reduce Clerical Support at Encinal HS Cut 45.0K

4. ELIMINATE SUPPORT FOR ATHLETIC PROGRAMS

a. Eliminate High School Athletic Program Cut 345.0K

b. Close Swim Centers Cut 120.0K

Cut = Spending Decrease/Service Reduction or Elimination; Shift = Spending transferred to categorical funds

FY08/09 Recommendations

Item Cut/ shift

Superintendent’s Recommendation

5. REDUCE MOF SERVICES

a. Reduce Site Based Cleaning to Alternating A/B Schedule

Cut 125.0K

6. ADJUST DISTRICT OFFICE SUPPORT

a. Reduce Clerical Support at District Office Cut 19.0K

7. DEFER ON-GOING SPENDING REDUCTIONS FOR ONE YEAR

a. Spend One-Time Mandate Cost Reimbursement to Defer On-Going Spending Reductions for One Year

Cut 1,080.0K

Cut = Spending Decrease/Service Reduction or Elimination; Shift = Spending transferred to categorical funds

What does $4M look like?

Unit Cost of 1% Reduction FTE

AEA $380K $2.77M 46

ACSA $54K $0.39M 4

Alameda Blue $37K $0.27M 6

CSEA $79K $0.57M 16

TOTAL $550K $4.00M 72

Reduction Factor = 7.3

Spending $2.65M of Reserves on On-Going Costs

Unit Cost of 1% Reduction FTE

AEA $380K $1.8M 31

ACSA $54K $0.3M 3

Alameda Blue $37K $0.2M 4

CSEA $79K $0.4M 11

TOTAL $550K $2.7M 48

Reduction Factor = 4.8

FY08/09 Actions

Item Cut/ shift

Superintendent’s Recommendation

8. ENHANCE REVENUE

a. New Leases Rev 60.0K

9. SHIFT SPENDING

a. Shift Technology Classified Staff to Categorical Funds

Shift 200.0K

b. Shift Instructional Supplies to Categorical Funds

c. Apply Mega-Item Transfer from Food Service to General Fund

Shift

Shift

125.0K

50.0K

Cut = Spending Decrease/Service Reduction or Elimination; Shift = Spending transferred to categorical funds

FY08/09 Actions

Item Cut/ shift

Superintendent’s Recommendation

10. REDUCE MOF

a. Reduce Use of Custodial Substitutes Cut 50.0K

11. REDUCE DISTRICT OFFICE SUPPORT

a. Reduce Professional Development Opportunities for District Office Staff

Cut 20.0K

b. Eliminate Clerical Hourly Support Cut 1.3K

Cut = Spending Decrease/Service Reduction or Elimination; Shift = Spending transferred to categorical funds

Why not shift more expenditures to categorical funds?

Categorical funds are restricted in use and come with requirements:

• Committee work

• Teacher staff development

• Assessment

• D/O FTE

FY09/10 Proposal

Item Cut/ shift

Superintendent’s Recommendation

12. RESTRUCTURE K-12 PROGRAM 2.3M

Restructuring the AUSD K-12 program is expected to include and is not limited to:

a. School Closures– Elementary

– Middle

– High

– Specialized/Alternative

Cut

Cut = Spending Decrease/Service Reduction or Elimination; Shift = Spending transferred to categorical funds

FY09/10 Proposal

Item Cut/ shift

Superintendent’s Recommendation

12. RESTRUCTURE K-12 PROGRAM (cont.)

b. Class Sizes – Class Size Reduction 3

– Class Size Reduction K

– Class Size Reduction 2

– Class Size Reduction 1

Cut

c. Counseling Services– Counselors

– College and Career Technicians

Cut

Cut = Spending Decrease/Service Reduction or Elimination; Shift = Spending transferred to categorical funds

FY09/10 Proposal

Item Cut/ shift

Superintendent’s Recommendation

12. RESTRUCTURE K-12 PROGRAM (cont.)

d. Additional Changes to Be Determined based on Restructuring

Cut

Cut = Spending Decrease/Service Reduction or Elimination; Shift = Spending transferred to categorical funds

FY09/10 Process and Timeline

• Identify Task Force – March 7• Bi-Monthly Meetings – Mid-March – June• Community Meeting – Early June• Weekly Meetings – September – November• Community Meeting – Mid-October• Recommendations to Board of Education for

information – November 25• Recommendations to Board of Education for

approval – December 9

Multi-Year Projections As of FY08/09 Governor’s Budget

FY07/08 Projection

FY08/09 Projection

FY09/10 Projection

Revenues 83,480,865 82,432,304 83,613,268

Expenditures 86,870,395 85,027,949 86,565,050

Other Sources (Uses) (435,906) (435,906) (435,906)

Net Inc/Dec in Fund Balance

(3,825,436) (3,031,550) (3,387,687)

Beginning Balance 7,666,016 3,840,580 809,029

Ending Balance 3,840,580 809,029 (2,578,658)

Multi-Year Projections As of FY08/09 Governor’s Budget

FY07/08 Projection

FY08/09 Projection

FY09/10 Projection

Ending Balance 3,840,580 809,029 (2,578,658)

Components of Ending Balance

Revolving Cash 50,000 50,000 50,000

For Economic Uncertainties 2,619,189 2,563,916 2,610,029

Mandate Cost Reimbursement 1,080,000 - -

P2 ADA 137,207 - -

Year 1 - Spending Reductions (1,738,300)

(3,476,600)

Year 2 - Spending Reductions (2,261,700)

Change in 3% Reserve Requirement

(52,419) (120,000)

Available Unrestricted Reserve (45,816) (14,437) 619,614

What will happen to the FY08/09 fund balance?

Estimated Available Unrestricted Reserve (2,884,886)

One-Time Mandate Cost Reimbursement Set-Aside 1,080,000

On-Going Spending Shifts and Reductions 1,738,300

Change in 3% Reserve Requirement 52,149

Estimated Available Unrestricted Reserve (14,437)

Increase

of 2.9M

What will happen to the FY09/10 fund balance?

Estimated Available Unrestricted Reserve (6,318,686)

One-Time Mandate Cost Reimbursement Set-Aside 1,080,000

On-Going FY08/09 Spending Shifts and Reductions 3,476,600

On-Going FY09/10 Spending Shifts and Reductions 2,261,700

Change in 3% Reserve Requirement 120,000

Estimated Available Unrestricted Reserve 619,614

Increase

of 6.9M

Recap of Recommendations and Actions

• Minimal available balance– Unbudgeted spending increases– Negotiated salary increases– Other Post-Employment Benefits (OPEB)

• Involves risk

• Requires qualified/negative certification

Outstanding Issues that Could Impact the Budget and MYP

• State Budget

• Average Daily Attendance (ADA)

• Special Education

• Other Post Employment Benefits (OPEB)

• Negotiations

Next Steps

• Information item for BOE discussion and public comment

• Superintendent’s final recommendations for BOE approval on March 4, 2008

• Reduction in force for BOE approval on March 11, 2008