UPLAND UNIFIED SCHOOL DISTRICT Charting a Safe Course During a State Fiscal Crisis STATE AND FEDERAL

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UPLAND UNIFIED SCHOOL DISTRICTCharting a Safe
Course During a State Fiscal Crisis STATE AND
FEDERAL BUDGET UPDATES

• Presented by
• Gary Rutherford, Ed.D.
• Superintendent
• February 24, 2009

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OVERVIEW AND DISCLAIMERS

• Following a long delay, the 2008-09 and 2009-10
  state budget package finally came together amidst
  a whirlwind of deal-making and political drama
• Budget bill language has only recently become
  available our initial analysis is derived from
  briefing with legislative staff, budget language
  and analyses from state fiscal consultants
• The information contained in this report is
  subject to further clarification as information
  becomes available

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THE STATE OF THINGS

• Even with a budget package finally in place, the
  states financial condition remains critical.
  The structural problems at the state level have
  not been addressed (11 billion in borrowing,
  over-stated revenue projections, depends on voter
  approval).
• Factors education leaders will continue to
  consider
• States credit rating is at junk bond status
• State revenues are projected to continue dropping
  through 2009 and into 2010
• K-Adult Education will experience historic
  mid-year and budget year reductions
• If revenues continue to drop, additional 2009-10
  reductions are possible
• We are monitoring cash flow status on a weekly
  basis
• We may have a clearer picture by May Revise

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THE BUDGET CORRECTION PACKAGE

• Adopted budget is a two-year package
• 2008-09 mid-year K-Adult reductions and deferrals
• 2009-10 reductions and deferrals
• Lowers the Prop 98 funding level in the current
  and budget years
• Requires voter approval of five special election
  proposals
• All must pass in order for the plan to hold
  together
• One includes future restoration of Prop 98
  maintenance factor (Prop 1C)
• Special election scheduled for May 19, 2009

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K-ADULT FUNDING 2008-09

• Reduces current year Prop 98 funding by more than
  6 billion via mix of reductions, deferrals and
  re-designation of funds
• 2008-09 funding cuts to K-12 1.9 billion
• Eliminates the .68 COLA (no COLA for 2008-09)
• 50 from revenue limits (about 160 per ADA)
• 50 from a 15 (944 million overall)
  across-the-board cut to specified categorical
  programs

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Nov. 20082008-09
REVENUE LIMIT FUNDING 2008-2009

6,138
5,862
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Impact on UUSD 2008-2009

• Summary of Proposed State Cuts
• Elimination of .68 COLA 429,000
• 4.5 Additional Cut 3,278,887
• SUBTOTAL 3,707,887
• Summary of Adopted State Cuts
• Elimination of .68 COLA 429,000
• 2.63 Additional Cut 1,875,011
• SUBTOTAL 2,304,011

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K-ADULT FUNDING 2009-10

• Eliminates 2.5 billion in Prop 98 funding from
  5.02 COLA for school districts and county
  offices no COLA FOR 2009-10
• Additional 530 million reduction to Prop 98 base
  due to revised 2008-09 base
• 265 million through cuts to base revenue limit
• 265 million through cuts to categorical programs
• 114.2 million savings from elimination of the
  High Priority School Grant Program

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REVENUE LIMIT FUNDING 2009-2010
6,447

6,447
PROPOSED
ADOPTED
Cumulative loss from statutory level 947 per
ADA)
Cumulative loss from statutory level 1,041 per
ADA)
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Impact on UUSD 2009-2010

• Summary of Proposed State Cuts
• .68 Cut carried forward 429,000
• 4.5 Cut carried forward 3,278,887
• 2.5 Additional Cut 1,782,331
• Previously identified Cuts 3,900,000
• SUBTOTAL 9,390,218
• Summary of Adopted State Cuts
• .68 Cut carried forward 429,000
• 2.63 Cut carried forward 1,875,011
• 0.958 Additional Cut 712,932
• Previously identified Cuts 3,900,000
• SUBTOTAL 6,916,943

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Impact on UUSD Base Revenue LimitSummary of
Adopted State Budget

• 2008-2009 Adopted Mid Year Cuts
• Elimination of .68 COLA 429,000
• 2.63 Additional Cut 1,875,011
• SUBTOTAL 2,304,011
• 2009-2010 Adopted Budget
• .68 Cut carried forward 429,000
• 2.63 Cut carried forward 1,875,011
• 0.958 Additional Cut 712,932
• Previously identified Cuts 3,900,000
• SUBTOTAL 6,916,943

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The State SolutionCategorical Cuts and
Flexibility

• Categorical programs are divided into three tiers
  to protect some and provide flexibility to others
• TIER I No funding reduction, no program
  flexibility, no statutory requirements waived
• TIER II Funding reduction of about 15 from
  2008-09 levels NO flexibility must be operated
  according to current requirements
• TIER III Funding reduction of about 15 maximum
  flexibility to shift spending for any educational
  purpose
• Changes start this year and continue until
  2012-13

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The States SolutionCategorical Cuts and
Flexibility

• TIER I Child Development, Child Nutrition, EIA,
  K-3 CSR, Prop 49 after school, Special Ed, Home
  to School Transportation, QEIA
• TIER II State Testing, ELAP, plus ten others not
  significant in UUSD
• TIER III All other state categoricals, including
  Adult Ed, supplemental grants for music, PE,
  arts, school counseling, PAR, ROP, instructional
  materials (textbooks), Gr. 9 CSR, GATE, CAHSEE
  support, CBET, and dozens of others

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There were SOME changes in

• Reduced penalties for K-3 Class Size Reduction
• Accessing prior year categorical balances (sweep
  ups) from 2007-08 only for any educational
  purpose with 8 programs excluded
• Routine Restricted Maintenance Transfer (reduce
  transfer from 3 to 1 percent until 2012-13)
• Deferred Maintenance Eliminates local .5
  statutory match until 2012-13
• Mega Item categorical flex provision - replaced
  with broader flexibility package
• Instructional materials timelines suspended for
  two years must maintain Williams compliance

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There were NO changes to

• Current law regarding Reserve for Economic
  Uncertainty (3 percent)
• Minimum number of minutes and the minimum school
  year remains 180 days
• K-Adult mandated cost reimbursement program
  remains in place the district will continue to
  process claims and maintain records

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The Nations SolutionThe Federal Stimulus
Package

• K-12 will benefit primarily from
• State Fiscal Stabilization Fund (UUSD est. TBD)
• IDEA - Special Education (UUSD est. 2,530,000)
• Title I Restricted (UUSD est. 1,135,000)
• It is one-time money
• Districts wont see funds until after July 1,
  2009
• Unable to factor into 2008-09 budget solution
• May not be able to include in 2009-10 budget by
  June deadline hope to be able to add in fall
• Awaiting instructions from Feds, CDE County

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What does all this mean?

• The cuts to the base revenue limit were not as
  deep as the Governors proposal but they are
  still the largest reductions in public
  educations history and the impact will be
  devastating
• The flexibility to shift state categorical funds
  to address these losses is not as broad as
  proposed by the Governor limiting districts
  ability to shift funds to protect our core
  programs and meet local priorities
• In summary, the combination of the cut in the
  districts income and the updated menu of
  solution options is no better and no worse than
  earlier projected. The district has some very
  difficult decisions to make and implement

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More questions than answers

• How will the districts Supplemental Early
  Retirement Program affect lay-off decisions?
• What does the change in penalties for K-3 CSR
  mean to districts?
• How much of the federal money will make it
  through to districts and how much discretion
  will there be to spend what we receive?
• What will happen in the May Special Election and
  what is the States back-up plan?

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Q How will Upland USD respond?
A We will stay the course.

• Enhance the bottom line by the spending and
  hiring freeze implemented in November (this is
  one-time money)
• Conservative, planned deficit spending using
  supplemental reserves, again a temporary fix
• Exercise categorical flexibility in state budget
  with discretion factor in Federal Stimulus
  Package once confirmed

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How will Upland USD respond?

• Identify additional revenue sources
• Identify additional cuts in spending
• Seek negotiated solutions with employees
• Hope for the best plan for the worst
• Communicate and stay focused
• Advocate, advocate, advocate
• www.capta.org
• www.protectourstudents.org
• www.csba.org

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NEXT STEPS

• Early - Issue lay-off notices to 78.5
  certificated March non-management employees
• - Issue release/reassignment letters to all
  certificated administrators
• Mid - Issue lay-off notices to classified
• March employees (number positions TBD)
• April - Make decision re SERP program
  participation
• Ongoing - Monitor budget revisit lay-off
  actions
• May - Analyze Governors May Revise
• By June - Adopt 2009-10 Budget

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www.upland.k12.ca.us
Email budget_at_upland.k12.ca.us