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2011-12 Adopted Budget

2011-12 Adopted Budget. Huntington Beach Union High School District Board of Trustees June 28, 2011. Agenda. Recap of 2010-11 State Budget Local Budget Multi Year Projections Next Steps Final Thoughts Questions?. 2. Recap of 2010-11. COLA of -0.39%

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2011-12 Adopted Budget

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  1. 2011-12 Adopted Budget Huntington Beach Union High School District Board of Trustees June 28, 2011

  2. Agenda • Recap of 2010-11 • State Budget • Local Budget • Multi Year Projections • Next Steps • Final Thoughts • Questions? 2

  3. Recap of 2010-11 • COLA of -0.39% • K-12 Revenue Limit Deficit of 17.963% • Suspension of Prop 98 - $4.3 billion • Added to the maintenance factor - $9.5 billion • Rejection of Governor’s $1.5 billion cut to revenue limits • Additional apportionment deferrals • $300 million for mandate reimbursements • Addition of one-time federal funds • Federal Education Jobs Fund 3

  4. State BudgetMay Revision Features • Non-Prop 98 cuts proposed in January - already enacted $13.4 billion • Elimination of redevelopment agencies and redirection of property tax • Realignment of programs from the state to the local level – AB3632 • Extension on temporary taxes by vote of the people • “Flat” funding for K-12 education • Funded 2.24% COLA and 19.754% deficit applied • Elimination of $2.5 billion in deferrals • Flexibility continues through 2014-15 4

  5. State Budget National and State Economy • National Economy • U.S economy is now recovering • Almost all sectors showing job growth • Unemployment rate rose from 8.8% in March to 9.0% • Continued decline of jobs in government and construction • California Economy • The state’s economy is recovering along with the nation’s • State added 96,500 jobs in February, best since recovery began • Personal income growth is about 3%, up from 2.8% in 2010 and -2.4% in 2009 • UCLA forecasts 5.5% for next year • Taxable sales fell more than 14% in 2009 and will grow about 3% in 2011 • UCLA forecasts 7% growth in 2012

  6. State BudgetRisks to the Budget • Tax proposals worth $4 billion could be rejected by the Legislature or voters • Litigation challenging special fund shifts, social service grant cuts, and realignment proposals • Middle East crisis could potentially raise oil prices, triggering inflation and impairing the economy • European debt crisis could raise interest rates and limit access to capital • The Governor does not have a “Plan B” should the tax extensions fail to materialize • Prop 98 guarantee would drop • All cuts budget or combination of accounting gimmicks and cuts 6

  7. State BudgetRevenue limits • 2010-11 • Proposition 98 suspended • 2011-12 • No suspension of Prop 98 • Increase allocated to reverse apportionment deferrals and fund AB3632 • A fully funded statutory COLA of 2.24% • HBUHSD - $164 per ADA • A deficit factor of 19.754% • Results in net funded change in R/L ADA of 0.00% - “Flat” • $5,217,300 is reserved for the potential R/L cut should the tax extensions fail to materialize • $-300 per R/L ADA 7

  8. State BudgetOther Programs • Special Education • AB602 funding is proposed to remain unchanged from the Governor’s January Proposal • Growth is funded but no COLA • Areas of concern are • Mental health services • Special Disabilities Adjustment (SDA) • Special Education pass-through revenues are now recorded in a separate fund • Fund 10 8

  9. State BudgetCategorical Flexibility • Flexibility options introduced in 2008-09 continue • 42 Tier III flexible categorical programs • Used for any educational purpose • $15,145,444 in 2011-12 • Tier III flexibility is extended through 2014-15 • Additional two years 9

  10. Revenues 2.24% Statutory COLA – $164 per ADA 19.754% deficit factor Net funded revenue R/L change 0.00% Enrollment increase of 54 Expenditures Staffing for enrollment and step and column increases No increase for salaries Increases to statutory benefits Health and Welfare benefit increases are included through Oct 2012 Flexibility is used to the maximum extent possible Local BudgetRevenues, Expenditures and Fund Balance 10

  11. Local BudgetRevenues, Expenditures and Fund Balance • Fund Balance (Estimated) 2010-11 • Decrease in unrestricted General Fund balance in the amount of $832,312 from Second Interim • General Fund unrestricted balance $23,099,218 - • Reserve for revolving cash $76,000 • DEU (Mandated 3% reserve) $4,381,966 • Designated amount (Flex) $18,641,252 • Represents in total a 15.81% reserve level 11

  12. Local BudgetRevenues, Expenditures and Fund Balance • Fund Balance (Budgeted) 2011-12 • Decrease in unrestricted General Fund balance in the amount of $4,968,618 from 2010-11 Estimated Actuals • General Fund unrestricted balance $18,130,600 - • Reserve for revolving cash $76,000 • DEU (Mandated 3% reserve) $4,174,577 • Designated amount (Flex) $8,662,723 • Designated amount (R/L cut) $5,217,300 • Represents in total a 13.03% reserve level 12

  13. Includes Enrollment projections: 2012-13 (106) 2013-14 (26) 2014-15 104 Statutory COLAs: 2012-13 3.20% 2013-14 2.70% 2014-15 2.90% Step and column increases Adjustments for increase in CPI Board approved reductions/augmentations ($1,200,000) in 2012-13 Reserve for potential on-going R/L cut beginning in 2011-12 ($5,217,300) Does not include Salary and statutory benefit increases H & W benefit increases beyond October 2012 Provision to fund the OPEB liability/”ARC” above the “pay-as-you-go” amount in either the budget or projection years Reserve amount should statutory COLAs become unfunded Multi Year ProjectionsBudget Year +3 (2012-13 through 2014-15) 13

  14. Multi Year ProjectionsBudget Year +3 (2012-13 through 2014-15) Unrestricted General Fund

  15. Multi Year ProjectionsBudget Year +3 (2012-13 through 2014-15) • If tax extensions do not materialize – • Ending fund balances • 2011-12 $12,913,300 • 2012-13 $5,851,187 • 2013-14 $1,301,656 • 2014-15 $(159,492) • These balances do not include reservations

  16. Next Steps • Close books on 2010-11 • Determine actual 2011-12 beginning balances • Monitor legislative actions • Revise Adopted Budget when approved • Continually monitor cash flow and reserves • The combination of deferrals, potential revenue cuts, and the reduction of reserves is diminishing the cash cushion that we’ve been able to maintain 16

  17. Final Thoughts What happens next? • The Governor goes after tax extensions • Good luck with that! • The legislature passes a balanced budget • Or, we prepare for an “all cuts” budget, or a combination of “cuts and gimmicks” 17

  18. Questions? Sources: School Services of California, Orange County Department of Education, District Prepared by: Jeanette Ullrich, Chief Business Official 18

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