DCSDBudget Reduction Plan

for 2010-11

March 2, 2010

AGENDA

State revenue challenges for 2009-10,

2010-11, and 2011-12 (Terry Casey) Recommended reductions for 2009-10

and 2010-11 (Steve Herzog) BoE asked to determine whether

reduction plan is reasonable (Steve Herzog)

State Funding Impacts

State revenue shortfall presented by David Hart and Terry Casey Impacts for K-12 schools Impacts for DCSD

Recommended Reduction Summary

$71 M State revenue shortfall DCSD 2009-10 through 2011-12

$ 5 M 2nd year of planned DCSD reductions for 2010-11

$76 M Anticipated reductions for 2009-10 through 2011-12

$12 M 2009-10 state rescission

$64 M

$40 M 2010-11 reduction plan

$24 M 2011-12 remaining shortfall to address

Recommended Reductions for 2009-10

Mid-year CDE rescission of $9.2M - $12.4M 1.93% saved $ 7.7M 1.25% from all sites $ 2.2M 1.25-2.50% from Departments $ 1.5M Contingency $ .6MTOTAL identified $12.0M

IMPACT: Less resources in schools and departments for 2009-10. Hiring freeze in place with only essential personnel replaced.

Recommended Reductions for 2010-11

Central Office/Services Reductions (6 - 10%) Capital Reserve (defer maintenance/technology) $4,000,000 Reorganize/reduce Custodial Services $1,070,000 Reorganize/reduce Learning Services $ 800,000 Reorganize/reduce Operations & Maintenance $ 715,000 Reorganize/reduce ITS Services $ 400,000 Reduce Construction, Planning & Risk Mgt. $ 290,000 Reorganize/reduce Human Resources $ 250,000 Reorganize/reduce Business Services $ 130,000 Reduce mileage, phones, printing $

120,000 Reorganize/reduce Legal Services $ 100,000

Subtotal $7,875,000 Impact: Approximately 40 FTE

Recommended Reductions for 2010-11

Program Reductions/ Reorganizations School-Based Budgeting Enhanced $2,000,000 Transportation changes due to calendar changes $1,000,000

205 Drivers with less hours each 36 Transportation EA’s with less hours each

Schedule A (athletics fees will help restore) $1,000,000 ETIL supplement for 10 schools $ 650,000 Innovation & Development reduction $

500,000 eDCSD becomes fully self-funded $ 200,000

Subtotal $5,350,000

Impact: Approximately 35 FTE

Recommended Reductions for 2010-11

School or Site Based Budget (SBB) Funding Reductions

SBB reduction of $250 per site $12,500,000 $100 SBB reduction from 2-year reduction plan ($5M) $150 additional SBB due to state revenue shortfall

Student growth funding savings $ 1,500,000

Special Education ratios change $ 1,500,000

Subtotal $15,500,000

Impact: Approximately 220-300 teachers/classified FTE (including 190 one-year only teachers)

Recommended Reductions for 2010-11

Compensation Reductions (negotiated) Compensation freeze for all employees (0.4%)

$3,000,000 Furlough day for all employees – 1st day $1,100,000

2nd day $1,100,000 3rd day $1,100,000

Reduce substitute pay for retired teachers $ 200,000(Now $150 per day, reduce to $115 per day)

Subtotal $6,800,000

____________________________________________________ Pay for Performance for all employees $4,200,000

RECOMMEND: Suspend for 1 year while program is under revision and move to Benefits Incentive Plan

Recommended Revenue for 2010-11

Fees for services ITS fee of $25 per student $1,300,000 Transportation fee of $1 per day per rider

$2,000,000

Subtotal $3,300,000

Increase Athletic/Activities fees to help $ 500,000

restore reductions to Schedule A Middle School increase $20 per student High School increase $30 per student

Recommended Reductions/Revenues for 2010-11

SUMMARY Central Offices / Services $ 7,875,000 Program Reductions/ Reorganizations $ 5,350,000 School-Based Funding $15,500,000 Compensation $ 6,800,000 Pay for Performance $ 4,200,000

TOTAL $39,725,000

Fees for services $ 3,300,000

Total $43,025,000

Recommended Plan: 2010-11

Identified reduction + fee revenue $43,025,000

2010-11 State revenue shortfall $31,000,000

Health Benefit Incentive $ 4,200,000

Balance $ 7,825,000

Other factors to be considered:

TBD = Charter override sharing plan ($ 1,500,000)

State final budget to be released in May 2010 ($ ????????)

Budget Pressures on DCSD

Key Considerations Multi-year state revenue shortfall

($71M) PERA annual increases through

2018 Assessed valuation decreasing Need to address equity issues across

the system

Recommended Reduction Summary

$71 M State revenue shortfall DCSD 2009-10 through 2011-12

$ 5 M 2nd year of planned DCSD reductions for 2010-11

$76 M Anticipated reductions for 2009-10 through 2011-12

$12 M 2009-10 state rescission

$64 M

$40 M 2010-11 reduction plan

$24 M 2011-12 remaining shortfall to address

Timeline for Reductions

March 2, 2010BoE finds proposed budget balancing plan reasonable

March 22, 2010State economic forecast update expected

May 2010 Legislature adopts final budget

May 2010Preliminary DCSD 2010-11 budget shared with BoE

June 2010Final DCSD 2010--11 budget adopted by BoE