Second Interim Budget ReportMarch 9, 2010

Steven Lawrence, Ph.D., SuperintendentBryan Richards, Director, Fiscal Services

Why an Interim Report? Ed. Code §42130 requires the Board to certify two

interim budget and financial reports Certification is either Positive, Qualified or Negative

Positive – The district will meet its obligations for 3 years Qualified – The district may not meet its obligations for 3

years Negative – The district will not meet its obligations in

current or upcoming year 1st Interim with transactions to October 31 due December

15 2nd Interim with transactions to January 31 due March 15 If 2nd Interim qualified or negative, 3rd Interim with

transactions through April 30 due June 1

Unrestricted General Fund Revenue

Revenue Limit Sources $ 158,651,759 Federal Revenue 225,054 Other State Revenue 32,074,592 Other Local Revenue 3,168,461 Total Revenue 194,119,866 Less: Net Contrib. to RGF (34,730,797) Net Available Revenue $ 159,389,069

Mt. Diablo Unified School District Unrestricted General Fund Revenues Before Contributions

2009-10 Total = $194,119,866

Revenue Limit63.84%

Revenue Limit Contributed to

Restricted net of indirect17.89%

Federal Revenue0.12%

State Revenue16.52%

Local Revenue1.63%

Revenue Limit is down from 89.8% of revenue to 81.73% because of the deficit.

Unrestricted General Fund Expenditures

Certificated Salaries $ 83,414,261 Classified Salaries 19,886,215 Employee Benefits 29,936,365 Books & Supplies 6,241,695 Services & Operating 15,089,883 Capital Outlay 108,113 Other Outgo 929,381 Interfund Transfers Out 5,452,658 Total Expenditures 161,058,571

Mt. Diablo Unified School DistrictUnrestricted General Fund Expenditures and Transfers Out

2009-10 Total = $161,058,571

Services & Operating

9.37%

Capital Outlay0.07%

Other outgo0.54%

Interfund Transfers Out

3.39%

Books and Supplies3.88%

Employee Benefits18.59%

Classified Salaries12.35%

Certificated Salaries51.79%

Salaries and Benefits make up 82.73% of expenditures & transfers out

Unrestricted General Fund Summary

Net Available Revenue $ 159,389,069 Net Expenditures 161,038,571 Net (decrease) fund bal. ( 1,669,502) Beginning Balance, July 1 24,529,701 Projected Ending Balance $ 22,860,199

Components of Ending Balance

Revolving Cash $ 300,000 Stores Inventory 536,118 Economic Uncertainties (2%) 6,036,482 IRS Assessment Resolution 533,550 Tier 3 and Site Carryovers 7,165,062 Undesignated 8,288,987 Ending Balance $ 22,860,199

Restricted General Fund Revenue

Revenue Limit Sources $ 6,614,982 Federal Revenue 31,892,737 Other State Revenue 37,774,770 Other Local Revenue 8,841,354 Interfund Transfers In 0 Net Contribution from UGF 35,525,361 Total Revenue $120,649,204

Mt. Diablo Unified School DistrictRestricted General Fund Revenue

2009-10 Total = $120,649,204Contribution from

Unrestricted29.45%

Revenue Limit5.48% Federal Revenue

26.43%

State Revenue31.31%

Local Revenue7.33%

Restricted General Fund Expenditures Certificated Salaries $ 44,454,133

Classified Salaries 21,644,156 Employee Benefits 24,982,365 Books & Supplies 25,374,487 Services & Other Operating 22,256,480 Capital Outlay 343,427 Other Outgo 2,505,016 Transfers Out 0 Total Expenditures $ 141,560,064

Mt. Diablo Unified School DistrictRestricted General Fund Expenditures

2009-10 Total = $141,560,064

Books & Supplies17.92%

Employee Benefits17.65%

Classified Salaries15.29%

Certificated Salaries31.40%

Capital Outlay0.24%

Other outgo1.77%

Services & Other Operating

15.72%

Restricted General Fund Summary

Total Revenue $ 120,649,204 Total Expenditures 141,560,064 Net (decrease) in fund bal. (20,910,860) Beginning Balance, July 1 22,687,425 Projected Ending Balance $ 1,776,565

Other Funds of the District

Funds for special purposes excluded from the General Fund

Special Revenue Funds Charter School – Form 09I Adult Education – Form 11I Cafeteria – Form 13I Deferred Maintenance – Form 14I

Capital Projects Funds Building (Proceeds of local bonds for construction) –

Form 21I Capital Facilities (a.k.a. Developer Fees) – Form 25I

Other Funds of the District (cont’d) Capital Projects Funds (continued)

County School Facilities (State Allocations for construction) – Form 35I

Capital Project for Blended Component Units (Mello-Roos) – Form 49I

Debt Service Funds Bond Interest and Redemption – Form 51I Debt Service for Blended Component Units (Mello-Roos) –

Form 52I Foundation Private-Purpose Trust Fund

(Scholarship Fund) – Form 73I All “Other Funds” projecting positive fund balances

Supplemental Information Form AI: Average Daily Attendance decrease of (719.95)

in 09/10 will decrease funding for 10/11. Form CASH: Cash Flow – to end year positive we sold a

$12M TRAN which closes on March 18 and are pulling LAIF into County Treasury

Form RLI: This is unchanged since 1st interim except for the adjustment to PERS reduction due to personnel cost changes

Form 01CSI: Criteria & Standards Form CI: Certification to Sign summarizes Criteria &

Standards Form MYPI: Multi-year Projection – What we can expect

based on what we know now from Sacramento, so it’s time for another episode of…

One time revenue limit deficit now ongoing! This year we have a one-time additional deficit of

$252.83 per 2008-09 FUNDED ADA (2007-08 actual P-2 ADA) or about $254.06 per current funded ADA

Starting next year it will become ongoing and be $201 per current year funded ADA This deficit is proposed to be applied to

“administrative” costs. While “administrative” is undefined in the proposal, current chatter from Sacramento indicates it will be calculated on function codes 2100-2199 (instructional supervision), 7000-7999 (central administration and technology) and 8000-8999 (maintenance, operations & security). Reductions since 2008/09 will count towards the cuts as it will be used as the base year. However, reductions from 2007/08 into 2008/09 may not. This is not yet finalized and there is a move to strip the language from the proposal.

General Outlook for the Future Positive Certification (we will meet our obligations for this

year and the next two) This certification is conditional on the board’s approval of

items on tonight’s cut list as they have been included in the multi-year projection

Concerns State fiscal health is still precarious although January

revenues were up in the first piece of good news out of the State in a while. However, it hasn’t made up for the shortfalls to date so the May revise may still have further cuts.

Health care cost containment is critical. Increases have been coming in well above the CPI. Our 2011 rate announcement comes from CalPERS in June.

Declining enrollment – still a major concern DEFICIT – The cuts have significantly lessened our deficit

spending. However, cash is king and we must continue to monitor it. We will be pulling our LAIF investment into the County treasury to be sure cash is available.

Cash is king for the State too! Additional new deferrals will affect our cash

flow substantially! July revenue limit deferred until September October revenue limit deferred until January March revenue limit deferred until April 29

Our TRAN payments are in July and August with a final due date of October 1

We plan to issue next year’s TRAN in October to be ahead of the second deferral

The 09/10 revenue limit cut $1,423/ADAMDUSD Revenue Limit Funding per ADA

5,079

5,528

5,780

5,079

5,528

5,780

6,803

6,617

6,4616,3466,370

6,109

5,125

5,528

5,7145,541

5,4005,2735,225

5,411

5,079

5,647

5,4825,348

5,227

4,947

5,630

5,3535,201

5,0744,980

4,500

5,000

5,500

6,000

6,500

7,000

7,500

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14

Year

Do

llar

s $

per

AD

A

Revenue Limit

2nd May Revise

Actual 09-10 Budget

Gov 10-11 budget

Form MYPI: Multi Year Projection

Undesignated + Tier 3 @ 6/10 $ 8,288,987 Operating Deficit 2010/11 ( 2,544,379) Adjustment in 2% reserve 709,906 Unappropriated Balance 6/11 6,454,514 Operating Deficit 2011/12 ( 1,391,915) Adjustment in 2% reserve 10,373 Unappropriated Balance 6/12 $ 5,072,972

Cuts substantially curtail the deficit

Unappropriated Balance 6/12 $ 5,072,972 Deficit & Rsv Adj - 2012/13 ($ 1,163,673)

Unappropriated Balance 6/13 $ 3,909,299 Deficit & Rsv Adj - 2013/14 ($ 3,580,926) Unappropriated Balance 6/14 $ 328,373

2013/14 sees the end of flexibility unless legislation is passed to continue it

What next?We go back to

Sacramento

State budget talks underway in legislature March Government Price Index establishes 2010/11

COLA April tax receipts tell the State’s fiscal tale Governor’s May Revise

Thank you. Tune in next time for the next episode of…