Budget Update 11-5-09

It is November and probably high time that I give you all an update on the fiscal status of the Sylvan Union School District. As you might expect, the fiscal outlook is a bit gloomy. This, of course, is a result of the continued economic crisis in California and across our country. However, along with the bad news, are some things that are encouraging. I will start with the good news.

The best news is that we are not experiencing as much of a decline in enrollment as we had projected. Last spring we anticipated a drop of 250 students. You will see by the chart below that we are only down by less than 40 students from where we were last year at this time.

The chart reflects growth in the newer schools. This is primarily because we are not overflowing students out of those schools this year.

The other good news for us is the federal stimulus money. With the infusion of over five million dollars to our budget, we have been able to avoid even greater layoffs than we could have experienced. The stimulus money is one time and our declining reserves in the next two years will reflect the loss of these funds. The chart below will give you an idea of our income to expenditure ratio. The unrestricted ending balance reflects the amount of money we are expecting to have beyond our required 3% contingency

As you can see by these balances, they will drop dramatically in 2011-12 due to the loss of the Federal Stimulus money we are planning to spread over this year and next.

We currently believe we now only need to reduce $1,000,000 for next year and $1,000,000 more for the following year. This is half what our projected target was back in June. The bad news, of course, is that we still need to cut our budget by one million each year.

Over the next few months, the Board will begin to discuss potential reductions for 2010-11. The other (potentially) bad news is the prediction that the State will be facing another 8-15 billion dollar deficit in January when the Governor comes out with his budget. We are all hoping there will be no mid-year reducing. However, the forecast looks terrible at this time.

If you are still reading, and I realize this is not fun to hear, I also want to inform you of what has changed in terms of staffing and program funding in the last couple years. I share this list with you so you can talk knowledgeably with parents and other folks in our community about what impact the budget crisis has had on our schools in Sylvan.


We have 64 less employees as of October 2009 compared to October of 2007. The following lists the number less in various categories:
Kindergarten Teachers= -8
First Grade Teachers = -5
Second Grade Teachers = -5
Third Grade Teachers = -6
Fourth Grade Teachers = -1
Fifth Grade Teachers = -1
Sixth Grade Teachers = -2
Seventh and Eighth grade teachers = -6
TOTAL less regular classroom teachers is 34

We have also reduced a number of specialty or support teachers
AT& G teacher = -1
Art Teachers = -3
Music Teacher = -5
Psychologists = -2
BTSA teacher = -1
Instructional Facilitator = -1
Counselors = -2
Librarians = -3

Other support staff reductions include:
Child care staff = -4
Paraprofessionals = -8
Grounds = -1
Maintenance = -1
Library Media Assistants = -2
Middle School Deans = -3
Business Manager = -1

The salaries of various groups were also reduced as reflected by negotiated agreements for 2010-11.
SEA salaries = reduced 1.1% (2 furlough days)
CSEA salaries = reduced 2.9% (6-7 furlough days)
Management salaries = reduced 2.9% (6.5 furlough days)

Support for the following programs has also been reduced
6th grade outdoor camp
Field Trips
Sports and Clubs (50%)
Travel and Conference (50%)
Site Allocations (10%)


This chart shows you the change in average class sizes since 2007
Average Primary Class Sizes

Kinder from 19.7 to 23.1 in 2009
First from 19.5 to 22.7 in 2009
Second from 19.5 to 21.6 in 2009
Third from 19.2 to 22 in 2009

The Board of Trustees will begin in January discussing reduction options for the 2010-11 school year. Our target is currently $1,000,000. Like last year, this will likely result in further reduction of staff. I will attempt to keep you informed of Board discussions as they are scheduled.

Budget Update 9-25-09

The following is the press release we sent to the Modesto Bee followed by a cut and paste of the article in today’s paper

The Sylvan Union School District has reached consensus with the Stanislaus County Schools’ Business Department regarding the satisfactory status of the District’s 2009-12 multiple year budgets. On September 10, 2009, Don Gatti, Assistant Superintendent for the Stanislaus County Office of Education, informed the Sylvan District that the County was “conditionally” approving the District’s budget due to concerns over projected ending balances in 2011-12. While the Sylvan Union School District had submitted a balanced budget in June of this year, county officials felt further clarification of reduction strategies in future years was necessary.

On September 21, the Sylvan Board of Trustees took action to clarify budget reducing strategies for 2011-12. The two revisions included improved enrollment numbers and targeted program reductions for the 2011-12 school year.

The Superintendent, John A. Halverson, met with SCOE officials on Wednesday, September 22 to clarify Sylvan’s reduction strategies. As a result of the meeting, Don Gatti announced that he would be providing the Sylvan Union School District with a new letter of budget approval without conditions. Both District and County officials agreed that improved communication efforts will avoid unnecessary multiple approval steps in the future.

Superintendent Halverson stated that the Trustees of the Sylvan District take their role in overseeing the school district’s budget very seriously. They have and will continue to make the hard decisions necessary to balance the budget each year.

While budget monitoring and discussions have been completed, Halverson stated the real issue still remains that Sylvan, like most school districts, is faced with further severe reductions over the next two years. He encourages parents and community members to visit the Sylvan Blog site on a regular basis to read budget updates: http://www.sylvanconversations.blogspot.com/.

For questions or concerns, parents and community members are encouraged to contact the Superintendent, John Halverson, who has also been serving as the District’s Business Manager for the last 16 months, at (209) 574-5000 ext 201 or email to jhalverson@sylvan.k12.ca.us.

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Local
Friday, Sep. 25, 2009
Sylvan leaves county list of districts on budget watch
Enrollment decline not as steep as feared
By Michelle Hatfieldmhatfield@modbee.com
Sylvan Union School District has been removed from the county's list of five districts receiving conditional approval of their 2009-10 budgets.The north Modesto school district now has full approval of its budget after officials tallied larger-than- anticipated student enrollment and the associated increase in revenue. Although the district still is experiencing a drop in enrollment, the decline was less than estimated. Most of a district's funding comes from the state based on daily student attendance.Officials estimated that daily attendance would drop by 260 students, but now believe attendance will dip by 53.Also, the Sylvan board of trustees committed Tuesday to cutting spending by $2 million each for the 2010-11 and 2011-12 school years. Details of what gets cut will be discussed more in the spring.County officials are satisfied with the financial health of the district, said Don Gatti, assistant superintendent of the Stanislaus County Office of Education. The office oversees the budgets of the county's 25 school districts."We've always submitted a balanced budget," Sylvan Union Superintendent John Halverson said. He added that trustees felt the district was misrepresented and the financial issue "overblown.""We needed to get the right message out there," Halverson said, and officials think they did that when they met with county officials Wednesday.

Budget Update 6/24/09

On Tuesday, June 23, 2009, the Sylvan District Board of Trustees approved the 2009-2010 budget. We are required to adopt a balanced budget even though the Legislature and Governor have not come to agreement on how to close the State’s $24 billion dollar deficit.

As always, the Board of Trustees and I will continue to do our best to keep you up to date with the budget and its implications. The following is a brief summary of our approved budget, decisions made, and what we are faced with in the future.

Income
The chart below shows a decline in revenue over a five year window.

2007-2008 Actuals= 61,587,085
2008-2009 Estimate= 60,056,922
2009-2010 Estimate= 58,646,847
2010-2011 Estimate= 55,033,650
2011-2012 Estimate= 55,237,226

What this chart does not show is the infusion of one time Federal stimulus funding (below) that is included in this revenue:

2007-2008
2008-2009= $ 2,025,402
2009-2010= $ 2,794,063
2010-2011= $ 956,308
2011-2012= $ 0


Without the $ 5,775,773 from the Federal Stimulus funding, the impact on our budget would be significantly worse. The figures above represent stimulus, IDEA and Title I funding.

The following shows the level of categorical funding that has been captured to support the unrestricted budget. To capture this funding we needed to eliminate a number of categorical programs like: AT&G pullout, staff development, reduce BTSA support, and various block grants to name a few.

2007-2008 Actuals=
2008-2009 Estimate= $ 1,029,883 + $ 1,434,970
2009-2010 Estimate= $ 1,697,979
2010-2011 Estimate= $ 1,703,531
2011-2012 Estimate= $ 1,263,557


In addition, we are expecting a decline in enrollment next year of over 260 students. This is due to the economic crisis, housing foreclosures, birthrate trends and new charter school programs. The impact of this decline is factored in the revenue figures noted above.

Expenditures

Our only viable course of action has been to drastically reduce expenditures. After reducing our budget by $2.5 million in 2007-08 (with no layoffs), and cutting another $700,000 in 2009 -2010 in non-salary expenses, we were forced to develop a plan for the reduction in staff.

Between February and May we notified 62 certificated staff and 21 classified staff of their potential layoff (or reduction of hours) starting next school year. Three things happened to allow us to reduce these numbers. First, we had a number of resignations and retirements. Second, is the Federal Stimulus funding described above. This funding has allowed us to save 25 teaching positions for the next two years. The third event was the agreement by employee groups to take furlough days next year. The two furlough days from SEA saved approximately 5 teaching positions. The 6.5 - 7 furlough days from CSEA saved approximately 17 classified positions.

As of today, 45 of the 62 certificated layoff notices have been rescinded. For classified employees, 17 of the 21 notices were rescinded. Three of the classified employees were reduced by 25%. This means only one classified employee remains laid off. Some certificated staff who received layoff notices have acquired other jobs and some have accepted temporary Sylvan positions.

Ending Balances and the Future

The combination of stimulus funding, furlough days and the shifting of categorical funds to the unrestricted has allowed the Sylvan Union School District to adopt a budget with a positive ending balance for 2009-10 and 2010-11. To do this we will need to not only sustain our furlough day agreements for two years, we will need to target an additional $2 million in reductions for the 2010-11 school year.

Please keep in mind that many of the budget parameters adopted last night could change, and probably will change, in the next few days as the State approves their final budget.

Throughout these uncertain times the Sylvan staff and educational community, for the most part, have been very understanding and supportive. I would like to thank you all for your diligent involvement, inquiry, suggestions and comments. All have been helpful in our pursuit to maintain fiscal stability during these difficult times.

Finally, I encourage you to email me your questions and take a look at the documents I have added to the right on this blog.

Sincerely,

John A. Halverson

Budget Update 5-13-09

The California Department of Education (CDE) released estimated allocation amounts for the initial State Fiscal Stabilization Funding (SFSF) last weekend. We now know that our one-time allocation will be $2,025,402 for phase I. Since this is 70% of the allocation to backfill our revenue limit, we expect to receive the estimated remaining $868,029 sometime this fall. This constitutes approximately $369 per ADA.

This is good news and will help to save jobs in the Sylvan Union School District. I will recommend that we split our allocation between the 2009-10 and 2010-11 school years to help balance our budget and save jobs.

In addition, you may already know that our allocation for Title I and IDEA (Federal Special Ed) has also been identified. We expect to receive $460,158 for Title I schools and estimate $1,500,000 for IDEA. Both these one-time allocations will help, even though each will carry restrictions on how the funds can be spent.

A summary of our ARRA funding projections is as follows:

Stabilization $ 2,893,431
Title I $ 460,158
IDEA est. $ 1,500,000
Total ARRA $ 4,853,589 ($619 per ADA)

Follow this link to the CDE for allocations: http://www.cde.ca.gov/fg/aa/ar/

While this is good news, we are also faced with more probable bad news. Yesterday, May 11th, the Governor announced the state faces a $21.3 billion Budget gap for 2009-10 if the Budget-related measures on the special election ballot fail. On Thursday he is planning to release two versions of the May Revision-one assuming that the special election measures pass and one assuming that they fail. He indicated that both the state and the nation are in the deepest recession since the Great Depression and that, for the first time since 1938, the state faces a decline in personal income.

The Governor estimates the revenue shortfall at $15.4 billion through 2009-10, almost double the projection made by the Legislative Analyst's Office shortly after the 2009-10 Budget Act was enacted. In less than three months, the 2009-10 State Budget, which the Governor and legislators hailed as closing a $40 billion Budget gap and providing a $2 billion reserve, is now projected to end with a $19 billion deficit. Keep in mind that, while the weakened economy is largely to blame for this new shortfall, one-third of the problem can be traced to the questionable Budget-balancing solutions the Governor and Legislature have put before state voters in this special election. Recent polling of likely voters shows these measures in jeopardy with the election fast approaching.

What does this mean for Sylvan?
Some estimates indicate that we could lose as much as $1,000 per ADA due to the economic change and failure of the propositions. This could more than negate our good news with the stimulus funding.

What are we going to do?
We will stay the course until after the election and the May Budget Revision is complete. This will probably extend into June. It is entirely possible that the legislators will renew their battle lines and entrench in partisan politics as usual. We will have no choice but to delay our decisions on rescinding layoffs until we know the impact of the election and May revision.

In the meantime, stay tuned, keep informed, vote and send me your questions.

Budget Update 4/23/09

The following is provided in the Board’s and my continuing efforts to communicate the status of Sylvan Union School District’s budget and progress towards meeting mandated submission of a balanced budget.

Next Tuesday evening (April 28th) the SUSD Board of Trustees will meet again in the Sanders Elementary Multi-purpose room, beginning at 7:00 p.m.. The Board will consider their options for covering the remaining $2.2 million in reductions for 2009-10 and $2.5 million needed to balance our budget for the 2010-11 school year.

As you know, the Board has identified all major reductions possible that do not impact staff. The following chart identifies those reductions that already have the support of the Board:






The remaining $2.2 million has been separated into the fair share needed from each of our three employee groups:



The Board is in the process of prioritizing which positions will be laid off within each of the above groups in order to meet the reduction targets. They will give direction to me on Tuesday evening. Click on the "Board's Prioritization Form" to the right to see the options being considered.

Three variables could change the targets above:

1. Employee groups could propose a salary reduction for all members in that group. So far the “Unrepresented Groups (Management and Confidential)” have proposed a 3% reduction for next year. CSEA has also met and been authorized to negotiate changes in calendar and/or compensation in an effort to minimize layoffs within their group.

2. The Federal Stimulus funds could be received and, given flexibility, could be applied to reduce our reduction target for the next two years. At this time it is uncertain how much or when this would happen.

3. A lack of passage on May 19th of budget bills could increase the cuts to education even further.

As always, send me your questions or suggestions.

John Halverson

SUSD Budget Update 4-3-09

The SUSD Board of Trustees held a study session and comment forum at Sherwood Elementary School last Tuesday evening. No action was taken and the following is a summary of that discussion:

Class Size Reduction- Revisited

Another version of class size increases in K-3 was reviewed. This version established an upper target average class size in any school or grade level of 25. This version, now posted on this blog site to the right, calculates a projected District average class size at K-3 of 21.72 students per classroom. It targets a net savings of $450,000, and a reduction of 17 teaching positions. This version is named CSR- 19-25. Another version has been calculated since the study session, also posted, and named CSR- 20-30.

Master Reduction List

The Board received back the results of their survey on the many suggestions received from the Sylvan staff and educational community. In this survey, the Board considered whether they wanted to include the suggestion or not on their final prioritization list. The suggestions were categorized into three areas:
1. Suggestions that a majority of the Board felt should be included in their priority list.
2. Suggestions without a majority
3. Suggestions with a majority that did not have an immediately determined savings.

This list is now posted on this blog site.


Remaining Targets

The Board reviewed the following chart to determine what their potential remaining target will be for reduction of staff. Please note that if reductions are one-time only, like in 2008-09, the reduction will not carry across to the following year.















The Board considered what could be moved from categorical programs to the unrestricted fund this year ($1,550,952), next year ($656,895) 2009-10, and the year after ($679,779) 2010-11. The Board also considered additional suggestions and reduction plans previously considered in 2008. Details of these suggestions are also found as a link on our blog site and titled “Reduction Options.”

Fair Share

The Board had previously asked administration to meet with SEA and CSEA to consider, in negotiations, possible salary rollback or furlough days as an option to offsetting staff layoffs. It was reported to the Board that a joint meeting with SEA and CSEA took place on March 18th. No decisions were reached and options are still under consideration by all.
Administration reported that both SEA and CSEA expressed concern that any potential salary reductions reflect a sunset date and are directly linked to saving positions only within their respective employee groups. I suggested, and the Board agreed, to consider a fair share reduction strategy when reducing positions or considering salary proposals.

Fair share would work as follows:
1. Identify targeted reductions needed in each year
2. Reduce target by non-staff related reductions as prioritized by the Board
3. Divide the remaining target into proportional “fair shares”
9% - Unrepresented groups (Management / Confidential)
22% - CSEA- remaining classified employees (non-management)
69% - SEA- certificated (non-management or temporary certificated)
4. Board prioritizes staff reductions based the fair share portions of the remaining target.

This would allow each group to consider salary or furlough options and assure a direct and proportional impact on the groups they represented.
The chart above suggests what that remaining target might be. It was pointed out to the Board that the remaining target would undoubtedly change based on the May election impact and Federal Stimulus. However, both these issue will take some time to determine due the uncertainty about how much we will receive and when we might receive it. Again, this fair share data is posted on our blog site.

As always, I welcome and encourage your questions. Our next Board meeting and budget discussion will be held next Tuesday, April 7th, starting at 7:00 p.m. at Sanders Elementary School.

Budget Update 3-20-09

At their meeting this week, the Board of Trustees continued their discussion regarding our budget crisis and planning for reductions. The following is a brief summary of the discussion, reports, direction given and future meetings:

Budget Suggestions

After soliciting suggestions from groups and individuals on ways to reduce expenditures, a list of 155 suggestions was compiled. The suggestions were grouped into the categories of:
1. Programs
2. Services
3. Materials
4. Conservation Practices
5. Efficiency Practices
6. Staffing Levels
7. Salaries / Benefits

I looked at each suggestion and added a potential $ savings, if I could determine it. Additional comments on rationale were added and I concluded with my recommendation to the Board regarding each suggestion. This list is posted to the right.
Each Board member will be returning this list to me next week indicating whether or not they want to see that suggestion on their final list for prioritizing in April.

The Board will discuss these suggestions on March 31st, along with the additional suggestions I have given them and those they generated last year. This March 31st study session will be held at Sherwood Elementary School starting at 7:00 p.m. Public comment will be invited immediately following the study session.

The Board’s list of possible reductions will be compiled by April 7th. Each Board member will submit their personal priorities from this list. The Board will analyze and review their collective priorities for a final decision at the April 28 Board Meeting.

District Office Administration

The Board asked for a comparison of District Administration levels compared to other districts. One study from our area was completed by the Patterson Unified School District in January. The second study was done by our District back in September. Both studies are posted on the blog. As in all previous studies of this nature, the results indicated SUSD continues to retain the fewest number of administrative staff per enrollment of any comparison group.

Class Size Reduction

The Board asked for an analysis of the potential savings to implementing the new flexibility in exceeding 20:1 in our K-3 classrooms. The analysis presented and posted on this blog site compared the impact of increasing class sizes based on the number of students projected next year in each grade level at all schools.

This analysis suggests that by increasing from 20:1 to an average of 22.5:1 the number of teachers needed would reduce by 21. The penalties associated with exceeding 20 would cause a loss of 60% of the CSR revenue. However, the net savings, after reduction of staff, would be approximately $540,000. The Board reluctantly agreed that we should continue to consider K-3 class size increases as an option as we look for ways to find $5.4 million in cuts this spring.

Please email your questions regarding any of these topics and I will get back to you as soon as possible.


Meeting With SEA and CSEA

The Board asked that SEA and CSEA be invited to a meeting to discuss the possibilities of salary rollbacks or furlough days. That meeting took place on Wednesday of this week. Information was shared and no decisions were made pending further discussions.

Future Meetings

April 7th , 7:00 p.m. at Sanders Elementary School
April 28th, 7:00 p.m. location to be determined
May 19th, 7:00 p.m. location to be determined
June 9th, 7:00 p.m., location to be determined