UPLAND UNIFIED SCHOOL DISTRICT 20080910 Budget Update: Charting a Safe Course During a State Fiscal

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UPLAND UNIFIED SCHOOL DISTRICT2008/09/10 Budget
UpdateCharting a Safe Course During a State
Fiscal Crisis

• Presented by
• Gary Rutherford, Ed.D.
• Superintendent
• TOWN HALL FORUM
• February 2009

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FIVE ESSENTIAL QUESTIONS

• How did this happen?
• How will Californias fiscal crisis affect public
  school funding?
  
• How will it impact Upland USDs funding?
• What about
• Cash flow implications?
• The Federal Stimulus Package?
• The State Solution Flexibility?
• How will UUSD respond?

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How did this happen?

• Surges in state revenue in 1998-99 resulted in
  massive (and unsustainable) new spending
  commitments. Ditto 2005-06
  
• The economics are different this time this
  recession is severe and widespread.
  
• There are more budget lock-ins than before.
• California politics are deadlocked legislative
  districts, political polarization, term limits,
  etc.
  
• The states policy process cant keep up with the
  enormous social, demographic and economic changes
  happening in California.
  

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Last Years Bumpy Ride in UUSD

• December 2007 - Staff identified more than 1.7
  million in cuts to justify negotiated settlements
  with all employees.
  
• January 2008 Governor of California declared
  a state fiscal crisis, proposing severe cuts.
  UUSD immediately imposed spending/hiring
  restrictions and a target of 5 million in
  reductions was set for the 2008-09 budget.

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The Old Plan 2007-2010

• Restore a balanced budget using a deliberate and
  thoughtful approach to reduce spending by 5
  million over the next three years
  
• 2007-08 Implemented spending freeze to build and
  enhance the years ending balance
  
• 2008-09 Identified and implemented reductions to
  address the majority of the necessary cuts used
  planned deficit spending as a one-time
  solution, pending additional cuts
• 2009-10 Identify and implement the balance of
  cuts needed to restore a balanced budget
  

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Summary of Actions in 2008-09

• Adjust teaching assignments 787,900
• Categorical reallocations/shifts 510,273
• Eliminate administrator positions 415,559
• Attendance Recovery Program 349,097
• Eliminate classified positions 338,719
• Elim. Food Services contribution 142,090
• Reduce K-6 Library Tech hours 123,692
• Reduce District/Site supply budgets 87,139
• Eliminate .5 FTE District Nurse 53,238
• Reduce transportation allocation 38,000
• TOTAL FOR 2008-09 2,846,707
• (leaving 2.5 million for 2009-10...we thought)

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How will this fiscal crisis affect Californias
public schools?

• Less than four months ago, and just weeks after
  the Legislature approved the latest budget in the
  States history, the Governor laid out his plan
  to make up a record 14.5 billion revenue
  shortfall by slashing 4.5 billion from next
  years education budget.

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Redefining the Problem

• The Governor released his State Budget Proposal
  on December 31, 2008. He now estimates the
  potential deficit (without corrective action) to
  be 41.6 billion.
• His proposals for the K-12 Education Budget
  include both mid-year and 2009-10 reductions.
  

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Nov. 20082008-09
2009-10
REVENUE LIMIT FUNDING
6,447
Jan. 20092008-09

6,138
Cumulative loss from statutory level 16.6
(1,041 per ADA)
5,862
5,544
5,406
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Impact on UUSDSummary of Proposed State Cuts

• 2008-09 Mid Year Cuts
• Elimination of .68 COLA 429,000
• 4.5 Additional Cut 3,278,887
• SUBTOTAL 3,708,316
• 2009-10 Proposed Budget
• Elimination of 5.02 COLA 3,564,661
• 2.5 Additional Cut 1,782,331
• SUBTOTAL 5,346,992
• TOTAL 9,055,308

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From Bad to Worse

• These cuts would be to a system that already
  ranks 46th out of 50 states, according to
  Education Week.
  
• The fact that California spends 1,900 less per
  pupil than the national average is shameful.
  
• - Dr. Gary Thomas
• San Bernardino County
• Superintendent of Schools

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Bringing the Problem Home

• The District is grappling with the impossible
  task of increasing our target up to 8 million
  in additional cuts to the districts operating
  budget over the next two years, as identified in
  our Second Interim Report, while maintaining our
  districts outstanding instructional offerings
  and support programs. This, following a
  crippling 4.5 million already slashed in
  2007-2009.

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What about.cash flow?

• Without corrective action, the state will run out
  of cash this month.
  
• Apportionments to school districts in April will
  be deferred until July. In UUSD, this includes
  
• CSR 3,110,255
• Revenue Limit 4,216,708
• Estimated Total 7,326,963
• If the State fails to act on mid-year cuts
• State will issue IOUs in March
• How will districts and other public agencies meet
  payroll???
  
• In UUSD, cash reserves ensure we can meet our
  obligations for the year but what comes next?
  

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What about the.Federal Stimulus Package?

• Approved by the House under debate in Senate
• Goal is to approve by Feb. 16th (Presidents
  Day)
  
• If passed into law, the American Recovery and
  Reinvestment Act of 2009 could generate
  
• Title 1 increase of 620,200
• IDEA (special ed) increase of 1.4 million
• School construction funds
• FOR TWO YEARS ONLY
• As always the devils in the details

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What about.The State Solution FLEXIBILITY?

• There are two types of revenue
• Unrestricted General Fund, Base Rev. Limit
• Restricted Supplemental funds (state or fed.)
• There are 51 state categorical funds
• Proposes 100 flexibility for 90 of programs
• Permanent and ongoing block granting
• Can be used for any general fund purpose
• Can use prior years carry-over balances
• Requires public input and board action
• This will seriously impact schools programs

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Examples of State Categoricals

• School Improvement Funds (SI)
• Instructional Materials Fund (textbooks)
• Arts, Music PE Block Grants
• Gifted Talented Education (GATE)
• Instructional Materials portion of Lottery (10)
• School Counselor Grant
• Peer Assistance Review Funds
• English Learner support (EIALEP)
• Additional Flexibility
• K-3 Gr. 9 Class Size Reduction (201)
• Shorter school year
• Reduce statutory reserve fund (3 to 1.5)
• Deferred and routine maintenance changes

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How will Upland USD respond?

• Enhance the bottom line by implementing a
  spending and hiring freeze (1 time )
  
• Conservative, planned deficit spending using
  supplemental reserves, again a temporary fix
  
• Identify additional cuts in spending
• Identify additional revenue sources
• Exercise maximum flexibility provisions for
  restricted funds (pending emergency state
  action)
  
• Hope for the best plan for the worst
• Communicate and stay focused
• Advocate, advocate, advocate

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Revenue Enhancing Considerations

• Charge fees for home-school transportation
• Expand Attendance Recovery Program
• Offer a Supplemental Early Retirement Program
• Continue to return County special education
  classes to the district
  
• Renegotiate all contracts with vendors for
  services (utilities, waste management, legal
  fees, etc.)
  
• Aggressively expand energy conservation efforts
  and solar energy installations
  
• Measure K program will not be impacted

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Solvency Scenario Considerations

• Eliminate additional classified unit positions
• Eliminate additional management positions
• Eliminate additional teaching positions due to
  increased class size and/or cuts to supplemental
  programs (elem. PE, Music)
  
• Reduce number of counselor positions
• Close the Instructional Media Center (IMC)
• Reduce home-school transportation program
• Further reduce all supply/equipment budgets
• Suspend all junior high athletics
• Reduce of teacher stipends for
  extra-curricular
  
• Freeze step/column increases for all employees
• Study school consolidation

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Considerations Subject to Negotiations

• Across-the-board unpaid furlough days
• Across-the-board salary rollbacks
• Reduce health and welfare benefit costs
• Increase average class size in grades 4-12
• Reduce the school year from 180 student days to
  as few as 175 (pending legislative action)
  

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TENTATIVE TIMELINE

• Jan- - Budget meetings with all sites/depts
• early Feb. - District publications, press
  releases
  
• - Update employee seniority lists
• - Monitor legislative process/advocacy
• - Town Hall Forums - UJHS 2/3, 7 p.m.
  - PJHS 2/9, 7 p.m.
  
• Feb. 10 - Budget recommendations to Board
• 7 p.m. - Demographic Study report to Board
• Feb. 24 - Board Action on budget proposal
• 7 p.m. - Reduction-in-Force resolution
• By June Adopt 2009-10 Budget
• Ongoing Monitor adjust lay-off actions

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budget_at_upland.k12.ca.us