Second Interim ReportSecond Interim Report2012-132012-13

Anaheim City School DistrictAnaheim City School District

March 15, 2013March 15, 2013

Darren DangDarren DangAssistant Superintendent, Administrative ServicesAssistant Superintendent, Administrative Services

TopicsTopics

Proposition 30Proposition 30 Local Control Funding FormulaLocal Control Funding Formula Financial Status (Second Interim)Financial Status (Second Interim) Cash Flow ConcernsCash Flow Concerns Help ACSD Balance Our BudgetHelp ACSD Balance Our Budget

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Passage of Proposition 30Passage of Proposition 30 A Big Thank You for your support to A Big Thank You for your support to

public educationpublic education Prevented cuts of $420 / student or Prevented cuts of $420 / student or

$7.9M$7.9M No new money for 2012-13 but did free No new money for 2012-13 but did free

up money for the state to spend in up money for the state to spend in 2013-142013-14

Per student funding for 2012-13 is still Per student funding for 2012-13 is still 10% below 2007-08 level10% below 2007-08 level

33

Local Control Funding FormulaLocal Control Funding Formula

44

LCFFLCFF WSF

Favors low income districts

Favors low income districts

Tiered FundingTiered

Funding

Restores Deficit & Deferrals

Restores Deficit & Deferrals

1st year 2013-14: $6,678 per ADA

1st year 2013-14: $6,678 per ADA

$416/ADA increase

($7.7M) in 1st year

$416/ADA increase

($7.7M) in 1st year

Full implemen

tation: 2020-21 $11,656

Full implemen

tation: 2020-21 $11,656

1st year 2012-13: $6,445

per ADA

Proposal wasn’t

adopted

Full implemen

tation: 2017-18 $12,162

LCFF = Local Control Funding Formula. WSF = Weighted Student Funding.

$6,940 for 2013-14

LCFF – Managing ExpectationsLCFF – Managing Expectations If adopted, ACSD will benefit from the Local If adopted, ACSD will benefit from the Local

Control Funding FormulaControl Funding Formula Policy Committee could delay Policy Committee could delay

implementation to 2014-15 implementation to 2014-15 Governor’s January Proposal is just the very Governor’s January Proposal is just the very

first step of long journeyfirst step of long journey A lot of things could change, and probably A lot of things could change, and probably

will, between now and thenwill, between now and then Budgeting 1.65% COLA, $1.5M instead of Budgeting 1.65% COLA, $1.5M instead of

$7.7M LCFF$7.7M LCFF

55

Multi-Year Financial SummaryMulti-Year Financial Summary2012-13 2012-13

22ndnd Interim Interim2013-142013-14

ProjectedProjected2014-152014-15

ProjectedProjected

Total RevenueTotal Revenue $152,253,146$152,253,146 $153,330,370$153,330,370 $156,790,659$156,790,659

Total Expend. Total Expend. $158,067,611$158,067,611 $163,237,883$163,237,883 $169,814,745$169,814,745

Net changeNet change ($5,814,465)($5,814,465) ($9,907,513)($9,907,513) ($13,024,086)($13,024,086)

Beg. BalanceBeg. Balance $21,990,983$21,990,983 $16,176,518 $16,176,518 $6,269,005$6,269,005

Ending Bal.Ending Bal. $16,176,518$16,176,518 $6,269,005$6,269,005 ($6,755,081)($6,755,081)

Economic Economic UncertaintiesUncertainties

$4,742,028$4,742,028

3%3%$4,897,136$4,897,136

3% 3% $5,094,442$5,094,442

3%3%

Designated Designated FundsFunds $2,784,476$2,784,476 $2,869,077$2,869,077 $2,806,682$2,806,682

Undesignated / Undesignated / (Shortfall)(Shortfall) $8,650,014$8,650,014 ($1,497,208)($1,497,208) ($14,656,205)($14,656,205)

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Why Expenditures Increase By Why Expenditures Increase By $5.1M in 2013-14 $5.1M in 2013-14

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No Furlough Days (restored No Furlough Days (restored 8 furlough days in 2012-13 8 furlough days in 2012-13 to 0 for 2013-14)to 0 for 2013-14)

+$4.0 M+$4.0 M

Step and Column IncreasesStep and Column Increases +$1.3 M+$1.3 M

Other AdjustmentsOther Adjustments - $0.2 M- $0.2 M

Total Expenditure IncreaseTotal Expenditure Increase ++$5.1 M$5.1 M

Why Expenditures Increase By Why Expenditures Increase By Another $6.6M in 2014-15 Another $6.6M in 2014-15

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Class size restored to 28:1 Class size restored to 28:1 per contractual agreementper contractual agreement +$3.2 M+$3.2 M

Step and Column IncreasesStep and Column Increases +$1.3 M+$1.3 M

10% Health & Welfare 10% Health & Welfare IncreaseIncrease +$2.0 M+$2.0 M

Other AdjustmentsOther Adjustments +$0.1 M+$0.1 M

Total Expenditure IncreaseTotal Expenditure Increase ++$6.6 M$6.6 M

Multi-Year Financial SummaryMulti-Year Financial Summary Even with 8 furlough days this year, ACSD is Even with 8 furlough days this year, ACSD is

overspending by $5.8 Millionoverspending by $5.8 Million Next year 2013-14, expenditures exceed income by Next year 2013-14, expenditures exceed income by

$9.9 Million$9.9 Million– After depleting our reserve savings of $8.5 Million, still After depleting our reserve savings of $8.5 Million, still

short $1.5 Millionshort $1.5 Million In 2014-15, expenditures exceed income by $13 In 2014-15, expenditures exceed income by $13

MillionMillion– Budget shortfall of $14.7 Million over next two Budget shortfall of $14.7 Million over next two

yearsyears If Local Control Funding Formula is adopted, it will If Local Control Funding Formula is adopted, it will

solve our revenue problem but we can’t count on it.solve our revenue problem but we can’t count on it.

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How Did We Get HereHow Did We Get Here

Significant Declining Enrollment Significant Declining Enrollment – Lost over 3,000 students since 2001-02Lost over 3,000 students since 2001-02

State Funding Cuts Over Last 5 yearsState Funding Cuts Over Last 5 years– $50 Million in total State funding cuts $50 Million in total State funding cuts

Increasing Special Education CostsIncreasing Special Education Costs– Federal Government underfunding Federal Government underfunding

Special Education by a total of $109M Special Education by a total of $109M over last 10 yearsover last 10 years

Deficit SpendingDeficit Spending

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Unsustainable Structural Unsustainable Structural Budget ProblemBudget Problem

1111

Impact of Deficit Spending: Impact of Deficit Spending: Diminishing CashDiminishing Cash

1212Source: Orange County Department of Education

$27.

0

$27.

6

$26.

1

$16.

7

$11.

9

$10.

7

$5.3

$30.

2

$34.

6

$32.

7

$27.

9

$17.

8

$21.

3

$22.

0

89.6% 79.7%79.9%

59.6% 67.1%

50.2%

24.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Cash

as

a Pe

rcen

tage

of E

ndin

g Fu

nd B

alan

ce

Cash

and

End

ing

Fund

Bal

ance

(in

Mill

ions

)

Anaheim City School DistrictComparison of General Fund Cash and Ending Fund Balance

Cash Ending Fund Balance Cash as a % of Ending Fund Balance

$27.6$26.1

$15.7

$9.9

-$7.3

-$3.4

-$6.5-$10.0

-$5.0

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Mill

ions

Cash Balance Without Loans or Transfers

Cash Balance Without BorrowingCash Balance Without Borrowing

1313

projected

($6.5)

($2.6)

($5.6)($7.3)

($12.5)($14.7)

$9.4

$0.7

($6.8)($8.9)

$5.4

($3.9)

($12.9)

$(20)

$(15)

$(10)

$(5)

$-

$5

$10

$15

BeginningCash

July Aug Sept Oct Nov Dec Jan Feb March April May June

Mill

ions

2013-14 Monthly Ending Cash Without Borrowing

Precarious 2013-14 Cash SituationPrecarious 2013-14 Cash Situation

1414

Note: Need to add additional working capital reserve of $8.5 M

Note: Need to add additional working capital reserve of $8.5 M

Cash Flow PrognosisCash Flow Prognosis Chronic Deficit Spending over past 5 years Chronic Deficit Spending over past 5 years

has slowly depleted our cash reserveshas slowly depleted our cash reserves It will take us multiple years to address our It will take us multiple years to address our

cash problemcash problem Margin for error is razor thin in 2013-14Margin for error is razor thin in 2013-14 Continued deficit spending will put ACSD at Continued deficit spending will put ACSD at

serious risk for cash insolvency in 2014-15serious risk for cash insolvency in 2014-15 We need to have a plan to address deficit We need to have a plan to address deficit

spending until our revenue problem spending until our revenue problem improvesimproves

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We Need Your HelpWe Need Your Help

While we are hopeful that the While we are hopeful that the Governor’s proposal will help solve Governor’s proposal will help solve our $14.7 Million problem,our $14.7 Million problem,

We need to have a balanced budget We need to have a balanced budget over the next two yearsover the next two years

We need your help with ideas:We need your help with ideas:– Email to: Email to: budget@acsd.us

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For More InformationFor More Information

http://www.acsd.k12.ca.us/http://www.acsd.k12.ca.us/

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