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First Interim Report - 2004/05 Budget

Presented December 14, 2004

Significant Events Impacting AUSD Finances
Fiscal Implications
2004/05 Spending Reductions
2005/06 Potential Spending Reductions
Multi-Year Financials
Next Steps

Significant Events Impacting AUSD Finances
  1. Collective Bargaining Agreements reached over the Summer 2004 with the four employee groups:

  2. Loss of students from Harbor Island apartment evictions, Section 8 voucher issues, rising housing prices and Coast Guard housing relocation will impact enrollment State Wide Declining Enrollment Detailed in LAO Study)

    3. The current estimate is 300 students @ $4,800 equaling $1,440,000.

  3. 2003/04 Budget Deficit

    4. Unanticipated expenditures led to a budget deficit of $253,000. Additional details was presented at the October 26th 2004 BOE meeting.

  4. 2004/05 Unrealized Growth

    5. The adopted budget for 2004/05 included an assumption of a 25 student increase. Due to item two above, we will not realize that 25 student increase resulting in a loss of $120,000 (25 X $4,800).

Fiscal Implications
Event 2004/05 2005/06 Total Ongoing
Collective Bargaining $600,000 - $600,000
Loss of 300 students - $1,440,000 $1,440,000
2003/04 Deficit $253,000 - $253,000
Unrealized Growth $120,000 - $120,000
Total Deficit $973,000 $1,440,000 $2,413,000

Even though AUSD has lost 300 students in 2004/05, the State will provide revenues based on last year's students.

2004/05 Spending Reductions

With the announcement of Harbor Island apartment evictions in July, 2004, staff began making staffing adjustments immediately. As a result, staff estimates savings of $287,000. In November, a spending/hiring freeze was implemented. All non-essential expenditures not related to health or safety require District Office approval. Staff estimates reductions of $267,000. Finally, staff anticipates realigning of expenses to restricted funds of $301,000.

Staff estimates that total ongoing reduction in expenditures totaling $400,000.

2005/06 Potential Spending Reductions

Listed are the broad categories where staff has identified reductions can be made.

Class Size/Program Reconfigurations $1,070,000
Revenue Enhancements and Efficiency Measures $803,000
School Closure $299,000
Classified/Certificated Staffing Reductions $1,247,000
Encroachment Reductions $363,000
Work Day Furlough (2 Days) $532,000
Reversion of COLA (2%) $1,272,000
Step & Column Suspension $526,000
Total $6,112,000

The reason why the list has items listed totaling over $6,000,000 is two fold. First, the staff wanted to give the Board options when deciding on future reductions. Second, the identification of $2.4 million deficit for 2005/06 requires AUSD to present a Fiscal Recovery Plan to Alameda County of Education. As part of the Fiscal Recovery, the staff wants to demonstrate to the County that all possible options are being considered.

Multi-Year Financials
2004/05 2004/05
Original  Projected 2005/06 2006/07
Budget Totals Projection Projection
Revenues      80,291,526      79,941,856      81,653,018      80,794,175
Revenue Limit - ADA Loss         (120,000)       (1,440,000)
Categorical - ADA Loss       (1,250,026)
Total Revenues      80,291,526      79,821,856      78,962,992      80,794,175
Expenditures      80,071,625      79,780,591      81,389,162      79,825,236
Collective Bargaining          600,000          200,000
Spending Reductions         (855,000)       (2,000,000)
Categorical Offset       (1,250,026)
Total Expenditures      80,071,625      79,525,591      78,339,136      79,825,236
Other Sources (Uses)           (63,600)           (63,600)           (63,600)           (63,600)
Net Inc (Dec) in Fund Balance          156,301          232,665          560,256          905,339
Beginning Fund Balance        1,456,833        1,456,833        1,689,498        2,249,754
Ending Fund Balance        1,613,134        1,689,498        2,249,754        3,155,093

The loss of students also results in loss of categorical dollars revenues that are offset by elimination of categorical expenditures.

COLA Assumptions 2005/06 - 2.7% 2006/07 - 2.6%

Next Steps

In addition to regularly scheduled Board meetings on January 11 and January 25, two Board workshops are scheduled for January 18 and February 1. During this four meetings specific information about reductions will be presented and discussed.

In order to identify areas requiring negotiations with the employee groups, staff would like the Board to provide direction no later than February 8.

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Last modified: December 15, 2004

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