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Tahoe Truckee Unified School DistrictBoard Presentation
January 23, 2008
Presented by
John GrayVice President
Financial TrendsFinancial Trends
Financial Trends
Characteristics of Financial Flexibility
State Budget
District Revenues
District Expenditures
AB 2756
1
The Housing Slump and Why It Matters
Weakness in the sub-prime market is depressing home prices in the mid- and high-price range, as well as for starter homes
Inventories have risen as buyers wait for further price declines
Weak housing market can spread more broadly throughout the economy – we are seeing that now
Construction and real estate employment has fallen
Home improvement retailers have seen big drops insales – The Home Depot expects 2007 earnings to drop 15% to 18%
Durable goods sales have softened
Foreclosure rates have increased
There is a broad slowing of economic activity
2
Mid-Year Actions Under Proposition 58
The Governor has declared a “fiscal emergency” under Proposition 58, triggering the following:
The Legislature is now called into Special Session to deal with the Budget crisis
The Governor must submit a plan to address the Budget imbalance
The Legislature must adopt a plan to address the problem by March 15 (that is, within 45 days of the declaration) otherwise it may not act on any other legislation and it may not adjourn
The plan must be adopted by a two-thirds vote of the Legislature, allowing the savings to take effect immediately
3
Mid-Year Cuts to Education Programs
Governor proposes $360 million in unspecified reductions to categorical programs in 2007-08
Represents an overall reduction of 2.5% to 2007-08 Budget Act level of funding for categorical programs
Cuts unlikely to be across the board; rather, they will be targeted
Our best guess is that the likely targets will be funds that have yet to be allocated and/or funds that have yet to be spent
And the rest of the cuts will be made in the P-2 apportionment
Input from the Legislature, Superintendent O’Connell, and education stakeholders will inform recommendations
4
Governor’s Approach to 2008-09
Governor continues to deal with $14.5 billion problem
Across-the-board cuts in all areas of government
Suspension of Proposition 98
Needed to make a $4+ billion cut to education
Dramatic cuts in all areas also have an impact on children and families
Social services
Health services
Prisons
Infrastructure
5
Governor’s Approach to 2008-09
The effect of the suspension working from the revised2007-08 base revenue limit:
COLA is declared at 4.94%, but not funded
Revenue limit deficit is imposed at 6.99% of new base revenue limit
The overall reduction to revenue limits for 2008-09 is about 2.4%
The 2.4% revenue limit reduction is from the 2007-08 base before mid-year cuts
Most categorical programs have a net loss of about 6.5% from the 2007-08 pre-mid-year cuts base
6
Budget Summary
Compared with full funding for COLA and growth for programs in 2008-09, the Governor’s proposal cuts K-12 education by $4.4 billion
These cuts average about $740 per ADA from 2008-09 full funding levels
Saying it another way . . .
Governor’s proposal is for 2008-09 funding to be about $1.8 billion less than current year, equal to average cuts of: $129 per ADA from Revenue Limits $30 per ADA from Special Education $146 per ADA from Categoricals
Total loss of about $305 per ADA from current year levels!
7
State Mandate Reimbursements
The Governor’s Proposed Budget defers funding for state mandates again
The 38 mandates still are required because of the $1,000 per mandate in the Budget Proposal
$38,000 in Budget as compared to an estimated$160 million in new claims projected in 2008-09
The Budget also proposes $150 million for both 2007-08 and 2008-09 for deferred mandate claims
These funds are provided pursuant to the “Deal” on the 2004-05 Budget
This addresses Proposition 98 “settle up” requirements from 2002-03 and 2003-04
8
Revenue Limits – Hourly Programs
Funding for the hourly programs is increased by the 4.94% COLA, but then cut by 10.9%
Resulting hourly rate is estimated to be $3.81 – down from $4.08 in 2007-08
Plus – chronic shortfalls in funding forthe hourly programs are expected tocontinue, so plan on further deficits asfollows (all of which are the same asour current estimates of deficitsin 2007-08):
K-12 Core Academic Program – 12%
Grade 2-9 Remedial Program – 14%
Grade 2-6 Remedial Program – 28%
9
Program Improvement
As a Program Improvement (PI) Year 3 district, one of 98 in the state, the District is faced with being hit with State Board sanctions as required by NCLB
The District needs to ensure fiscal solvency, but also needs to show significant growth in closing the achievement gap
10
Categoricals Currently RequiringUnrestricted General Fund Support
Resource Description General Fund Contribution
6055 State Preschool $12,715
6130 Child Development $29,994
6205 Deferred Maintenance $498,262
6390 Adult Ed Support $28,207
6500 Special Education $1,635,315
7156 IMFRP $10,201
7230 Home-to-School Transportation $257,370
7240 Special Education Transportation $366,755
8150 Routine Restricted Maintenance $1,312,762
TOTAL $4,151,581
11
Source: District 2006-07 CAT Report
Categorical Program Reductions
Categorical programs are expected to share the pain in2008-09
No COLANo growthAnd a rollback in funding of approximately 6.5% from
2007-08 Budget levelsAlmost all categorical programs will be affected by proposed
cutsProposed reductions total $1.7 billion, of which just over
$700 million is attributable to COLA, which leaves around$1 billion in rollbacks
Average reduction of 6.5% from 2007-08 budgeted levelSome effort is made to soften the blow, but the hit will still
hurt
12
Basic Aid
Tahoe Truckee Unified School District is a basic aid school district
The California Constitution required that the state provide a minimum level of state aid to every school district of $120 per ADA (since 1958)
Under attack in 2003-04, state law was amended to count state categoricals toward the basic aid guarantee, so no unrestricted $120 is now provided to basic aid school districts
During difficult financial times, legislators have viewed with envy the property tax allocation that is generated by basic aid school districts
There have been past proposals to recapture the additional income from basic aid districts and reallocate it to other nonbasic aid school districts
13
Property Tax Dependency CanLead to Difficult Financial Times
Growth in enrollment yields no extra dollars
The only safety net for a decline in property taxes is the revenue limit
Basic aid school districts need a larger safety cushion than revenue limit districts due to the volatility of basic aid revenue
A combination of declining enrollment and rising taxes is why Tahoe Truckee has become basic aid, but basic aid doesn’t mean continued growth
14
General Fund ExcludingOther Sources/Uses
Revenue Expenditures
15
Tahoe Truckee Unified School District
Percentage of District Enrollment of Free and Reduced Meals, English Learners, and Minority
Rank District % of Free and Reduced Meals
1 All Unified Districts 51.86
2 Lake Tahoe Unified 50.55
3 Mammoth Unified 41.82
4 Mariposa County Unified 37.65
5 Auburn Union Elementary 34.12
6 Tahoe Truckee Unified 32.23
7 Calaveras Unified 29.56
8 Foresthill Union Elementary 28.97
9 Black Oak Mine Unified 28.45
10 Amador Union Elementary 27.88
11 Roseville City Elementary 23.08
12 Comparative Districts Average 19.36
13 Dry Creek Joint Elementary 18.21
14 Placer Union High 13.66
15 Placer Hills Union Elementary 11.80
16 Rocklin Unified 11.70
17 Rescue Union Elementary 10.02
18 Roseville Joint Union High 9.97
19 Buckeye Union Elementary 8.20
20 El Dorado Union High 7.39
16
Position Fundings
Certificated positions:
251 funded from unrestricted General Fund
48 funded from restricted funds
Classified positions:
95 funded from unrestricted General Fund
114 funded from restricted funds
17
Parcel Tax
“Parcel Tax” is the common term for a school district “qualified special tax”
Tahoe Truckee USD parcel tax totaling approximately$3.6 million annually has allowed the District to preserve academic programs
The parcel tax has allowed the District to do more for its stakeholders
The parcel tax is an essential component if the District is to maintain its current academic programs
18
Total Unrestricted General FundRevenues for 2005-06
Rank District Revenue Limit per ADA
1 Mammoth Unified $6,639.70
2 Tahoe Truckee Unified $6,103.04
3 El Dorado Union High $6,070.24
4 Placer Union High $6,065.95
5 Roseville Joint Union High $5,813.14
6 Mariposa County Unified $5,800.44
7 Comparative Districts Average $5,376.54
8 Calaveras Unified $5,374.53
9 Lake Tahoe Unified $5,365.35
10 Auburn Union Elementary $5,318.15
11 All Unified Districts $5,281.79
12 Placer Hills Union Elementary $5,257.57
13 Rocklin Unified $5,219.50
14 Black Oak Mine Unified $5,202.43
15 Amador Union Elementary $5,192.02
16 Buckeye Union Elementary $4,978.33
17 Foresthill Union Elementary $4,977.92
18 Dry Creek Joint Elementary $4,929.59
19 Rescue Union Elementary $4,926.17
20 Roseville City Elementary $4,878.87
19
Unrestricted Certificated Salaries for 2005-06
Rank District Certificated Salaries per ADA
1 Mammoth Unified $3,866.54
2 Tahoe Truckee Unified $3,771.26
3 Roseville Joint Union High $3,347.26
4 Rescue Union Elementary $3,241.28
5 Mariposa County Unified $3,153.49
6 Roseville City Elementary $3,140.72
7 Buckeye Union Elementary $3,132.96
8 Placer Union High $3,114.54
9 El Dorado Union High $3,089.49
10 Comparative Districts Average $3,080.34
11 Dry Creek Joint Elementary $3,067.76
12 All Unified Districts $3,025.51
13 Rocklin Unified $3,014.17
14 Amador Union Elementary $2,963.15
15 Placer Hills Union Elementary $2,959.61
16 Black Oak Mine Unified $2,945.04
17 Lake Tahoe Unified $2,881.84
18 Auburn Union Elementary $2,809.09
19 Foresthill Union Elementary $2,722.59
20 Calaveras Unified $2,662.68
20
Comparative Analysis of Certificated Salaries2006-07 Salary Distribution
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
< $43
,000
$43,0
00 - $
50,00
0
$50,0
00 - $
57,00
0
$57,0
00 - $
64,00
0
$64,0
00 - $
71,00
0
$71,0
00 - $
78,00
0
$78,0
00 - $
85,00
0
<$85
,000
District
Composite
StateFTE %
21
Student Enrollment per Classroom Teacher
Rank District Ratio
1 Tahoe Truckee Unified 17.79
2 Mammoth Unified 18.72
3 Mariposa County Unified 18.74
4 Rescue Union Elementary 20.38
5 Roseville City Elementary 20.58
6 Rocklin Unified 20.73
7 Placer Hills Union Elementary 20.77
8 Buckeye Union Elementary 21.01
9 Lake Tahoe Unified 21.02
10 Dry Creek Joint Elementary 21.07
11 Calaveras Unified 21.08
12 All Unified Districts 21.11
13 Comparative Districts Average 21.30
14 Auburn Union Elementary 21.68
15 Black Oak Mine Unified 21.99
16 Placer Union High 22.31
17 El Dorado Union High 22.32
18 Roseville Joint Union High 22.47
19 Amador Union Elementary 22.88
20 Foresthill Union Elementary 24.44
22
Unrestricted Classified Salaries for 2005-06
Rank District Classified Salaries per ADA
1 Mammoth Unified $915.29
2 Foresthill Union Elementary $889.39
3 Mariposa County Unified $795.63
4 Placer Union High $790.06
5 Tahoe Truckee Unified $755.13
6 Rocklin Unified $682.11
7 El Dorado Union High $668.78
8 Calaveras Unified $662.12
9 Roseville Joint Union High $660.43
10 All Unified Districts $658.77
11 Lake Tahoe Unified $650.95
12 Black Oak Mine Unified $648.35
13 Comparative Districts Average $641.42
14 Rescue Union Elementary $638.06
15 Buckeye Union Elementary $609.62
16 Placer Hills Union Elementary $591.23
17 Dry Creek Joint Elementary $581.70
18 Amador Union Elementary $541.54
19 Roseville City Elementary $532.99
20 Auburn Union Elementary $488.13
23
Unrestricted Employee Benefit Expensefor 2005-06
Rank District Employee Benefits per ADA
1 Mammoth Unified $1,583.40
2 Mariposa County Unified $1,563.78
3 Tahoe Truckee Unified $1,533.98
4 Buckeye Union Elementary $1,238.93
5 Lake Tahoe Unified $1,121.89
6 Black Oak Mine Unified $1,109.07
7 All Unified Districts $1,106.51
8 Auburn Union Elementary $1,098.12
9 Placer Union High $1,093.28
10 Roseville Joint Union High $1,074.87
11 Calaveras Unified $1,071.46
12 Comparative Districts Average $1,066.46
13 El Dorado Union High $1,052.63
14 Roseville City Elementary $1,029.18
15 Amador Union Elementary $1,026.32
16 Placer Hills Union Elementary $1,006.91
17 Rescue Union Elementary $1,006.76
18 Rocklin Unified $951.15
19 Foresthill Union Elementary $937.00
20 Dry Creek Joint Elementary $922.91
24
Unrestricted Books and Supplies Expensefor 2005-06
Rank District Books & Supplies per ADA
1 Foresthill Union Elementary $258.68
2 Tahoe Truckee Unified $240.69
3 Rescue Union Elementary $205.96
4 Roseville Joint Union High $195.49
5 Roseville City Elementary $180.83
6 Placer Union High $180.28
7 El Dorado Union High $173.87
8 Mammoth Unified $166.16
9 Dry Creek Joint Elementary $163.24
10 Comparative Districts Average $150.50
11 Buckeye Union Elementary $146.11
12 Lake Tahoe Unified $144.86
13 Rocklin Unified $129.82
14 All Unified Districts $112.01
15 Amador Union Elementary $103.41
16 Black Oak Mine Unified $102.98
17 Mariposa County Unified $91.45
18 Calaveras Unified $82.42
19 Placer Hills Union Elementary $68.69
20 Auburn Union Elementary $28.33
25
Unrestricted Services and other Operating Expense for 2005-06
Rank District Services & Operations per ADA
1 Mammoth Unified $869.64
2 Tahoe Truckee Unified $752.16
3 Foresthill Union Elementary $668.84
4 Placer Union High $661.86
5 Amador Union Elementary $527.26
6 Lake Tahoe Unified $521.88
7 Auburn Union Elementary $509.56
8 El Dorado Union High $478.21
9 Rocklin Unified $466.11
10 Rescue Union Elementary $465.94
11 Comparative Districts Average $453.21
12 Roseville Joint Union High $438.36
13 Mariposa County Unified $436.69
14 Calaveras Unified $436.66
15 Black Oak Mine Unified $416.77
16 Placer Hills Union Elementary $407.22
17 All Unified Districts $375.92
18 Buckeye Union Elementary $355.06
19 Dry Creek Joint Elementary $335.68
20 Roseville City Elementary $328.31
26
Unrestricted Capital OutlayExpense for 2005-06
Rank District Capital Outlay per ADA
1 Tahoe Truckee Unified $346.99
2 Rescue Union Elementary $59.82
3 Amador Union Elementary $48.37
4 Mammoth Unified $47.18
5 Buckeye Union Elementary $32.51
6 Placer Union High $28.19
7 All Unified Districts $23.36
8 Dry Creek Joint Elementary $18.67
9 Comparative Districts Average $15.46
10 Roseville Joint Union High $10.76
11 El Dorado Union High $10.15
12 Black Oak Mine Unified $8.59
13 Calaveras Unified $6.29
14 Lake Tahoe Unified $3.08
15 Rocklin Unified $2.90
16 Roseville City Elementary $1.67
17 Auburn Union Elementary $0.00
18 Foresthill Union Elementary $0.00
19 Placer Hills Union Elementary $0.00
20 Mariposa County Unified $0.00
27
Unrestricted Net Ending Balance for 2005-06
Rank District Net Ending Balance per ADA
1 Foresthill Union Elementary $953.87
2 Lake Tahoe Unified $912.60
3 Roseville Joint Union High $834.84
4 Mammoth Unified $799.40
5 El Dorado Union High $784.16
6 Dry Creek Joint Elementary $760.44
7 Calaveras Unified $739.85
8 Buckeye Union Elementary $669.76
9 Tahoe Truckee Unified $638.03
10 Rescue Union Elementary $633.01
11 Comparative Districts Average $616.25
12 Mariposa County Unified $572.85
13 All Unified Districts $571.21
14 Placer Union High $545.79
15 Black Oak Mine Unified $522.15
16 Rocklin Unified $423.05
17 Roseville City Elementary $402.54
18 Placer Hills Union Elementary $372.57
19 Amador Union Elementary $330.73
20 Auburn Union Elementary $321.75
28
Multi-Year Projections:The Impact of AB 1200/1708/2756
AB 1708 (Chapter 924/1993) clarified exactly what was meant by the term “multiyear” (ref. E.C. Section 42131)
For budget approval, must show solvency by meeting standards and criteria in budget year and next succeeding fiscal year
For positive interim report, must meet standards and criteria for budget year and two succeeding fiscal years
AB 2756 (Chapter 52/2004) added personal certification by Superintendent and CBO
29
Thank you!
