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po~~e,~~,= ~ 5 THE CITY OF AGENDA REPORT °~ ~l l- ' CITY COUNCIL AND BOARD OF TRUSTEES ~~~~ ~ ~ ~° [~L£~Sf~cNTON:. JOINT MEETING II' C~'~ s=r. P~ensnrrTON urorleo solooi olsrxicT March 23, 2009 TITLE: OVERVIEW OF CITY AND DISTRICT FINANCES SUMMARY This agenda report is intended to provide an overview of both City of Pleasanton and Pleasanton Unified School District finances. BACKGROUND Overview of School District Finances The current year budget of the Pleasanton Unified School District (PUSD) has undergone significant revisions as a result of an imbalanced state budget and national recession. The District's primary source of funding, the Base Revenue Limit, was reduced by the State by $210 per Average Daily Attendance (ADA), resulting in a reduction of revenue of $3.OM. In addition, the State has reduced funding for most categorical programs (e.g., art and music, school and library improvement, physical education) by 15.4% in the current year, resulting in a reduction of revenue of $1.1M. These reductions in funding were approved by the State in February 2009, which is the eighth month of our fiscal year. The PUSD had limited opportunities to revise our spending, thus the District will use one-time reserves to offset the loss of revenue in the current year and revise the budget in the next year to off-set the loss. For the budget year FY09/10, the State has further reduced the Base Revenue Limit by $83 per ADA, resulting in a reduction in current revenue of $1.2M. In addition, the State has approved an additional reduction to categorical programs of 4.5%, resulting in an additional reduction of current revenue of $0.3M. The loss of current dollars is exacerbated by the loss of cost of living adjustments (COLA) on revenue. The State did not fund COLA on revenue in the current year and will not fund COLA in the budget year. In the budget year, this translates into $4.5M in revenue limit and $1.3M in categorical dollars the District will not receive. The American Recovery and Reinvestment Act (ARRA) was signed into law in February, and we are awaiting details on these funds may impact our District. Given the continuing decline in State revenues, the PUSD does not assume these funds will be available as part of our solution.