borrowed and stolen a little bit of their thinking because we think it applies. the state budget, there is not a whole lot more to say that is new. there were a couple of tidbits that we came across. this is from a report released by the state comptroller. under the second bullet point, about the cuts that have been made over the last six years from the state. specifically, the state general fund has been cut by $12.2 billion. about half of that, more than half, has been cut out of k-14 funding. that is the largest and most disproportionate amount of spending cuts in the state budget since then. the fact that the governors of -- proposed but it -- budget leaves k-14 spending flat is

nothing to be overjoyed about. having said that, it is very significant. if it does not passed and our children future initiative does not pass, we stand to see very deep cuts. the second bullet point is hot off the press. the superintendent alluded to this in his opening comments. the legislature is, by state law, required to pass a budget by this friday and if they do not, then their own paychecks become suspended. until they do pass a budget. that is leading folks who are observing this process to predict they will pass a budget. the committees and their leadership have introduced

versions of the budget in their respective chambers. all signs point to something being passed. the student funding proposal does not appear to be being taken up in an effective way by the legislature. that is likely to be rejected in terms of implementation for next year. otherwise, the funding for k-12, we believe -- this is what we're hearing from our sources -- funding levels will probably reflect those proposals. there is speculation whether differences between the legislature persians and the governors are large enough for there to be a veto possibility. whatever the legislature passes, there are some things pertaining

to social services. it is being debated a little bit. the tea leaves are being read about whether they will reach an agreement or to the extent that they do not reach symmetry in their proposals, that could result in a veto. that does not prevent the legislature from meeting its requirement to pass a budget by june 15. this is all information you have heard before. the fact that the governor's proposed budget includes zero funding, how much of a problem we think that is, and that taxes -- if taxes are not approved, we face significant cuts last year. -- next year. the developments we have talked about have been positive. they are continuing. they continue to move in the

right direction for it transportation funding was included in the may revise. we closed the transaction to sell 705 boulevard to san francisco state university. that transaction closed two weeks ago. so we have the funds and we have given notice to the holders of the certificates of participation who are intent to repay those. $75,000 per year through 200029, beginning next year. the mayor's proposed budget is included, as we expected. we hope the funding for the rainy day reserve, it also reflects an expectation that the 2013-2014 fiscal year will include a drop. all of these things helped to reduce the gap. on the other hand, we have these

statistics that are so great. the major cuts could be up to $23 million in the middle of the year. superintendent garcia mentioned that there is a historically high level of school districts that are facing fiscal insolvency as a result of the statewide fiscal crisis. these are some overall statistics about the general fund reflected in the recommended budget. i am looking at rita and her team has done the heavy lifting to pull these numbers together. they deserve a lot of acknowledgement for that. i also want to appreciate the work of the staff team that the deputy superintendent for his faded on as well as a grid -- a good cross-section of leadership.

this is what we are proposing as the budget for next year. there is still a very significant imbalance between revenues and expenses to the tune of $30 million. we are fairly -- we are barely making it with $230,000 to spare. that will allow us to maintain our 2% reserve at the end of 2013, which we have to do or else we will face a number of consequences we do not want to think about. at the same time, that will put us in a position for 2013-2014 where we have to make fairly significant cuts. 13 will be preparing between now and next week the multi-year projections. i know you are familiar. that format shows the trajectory of the unrestricted general fund balance through 2014-2015.

other revenues, most of this is not new information. one thing i will point out is there is a glimmer of a positive trend. sales tax, which we receive a portion of in the city, is projected to increase by 6%. we saw that increase in this current year. it looks like that is going to happen for 2013 if all the predictions that the city is making is accurate. expenditures, i am sorry for some of the formatting issues. these expenditures, we are continuing to reflect, in our recommended budget, basically a continuation of the expenditure cuts that we have had to make over the last couple of years. at the same time, there are some areas where you will see some additional costs. some of them are articulated

here. we will go into more detail about these items next week. two or three programs. this is apropos of the discussion that you have -- that you had a few minutes ago. to recap, the tier 3 represents flexibility established by the state related to funding sources that were previously restricted for various uses, retired populations. that was the list that you saw earlier in your meeting. a primary advantage of that is the reason why the state established that flexibility, to allow districts another set of tools to get through this fiscal crisis. it extended well beyond what folks initially thought at that time. it has been extended beyond the original window that was established back then.

in our district, we are recommending that $16.5 million of the $62 million that we received in total refunds be flexed. $41.6 million would remain invested in problematic areas that have existed since before this flexibility was provided. the majority of that is in the targeted instruction improvement block grant. there is a page in the budget book, page 54 of the budget book, has a table. we will pull this together so it is all in one place and more easily understandable. page 54 has some of the information that a couple of the commissioners were asking for. to no one of the total soared -- what are the total sources? what is the amount proposed to be flexed? what is the amount proposed to

be extended on the original tier 03 purposes? we will incorporate that with the information you saw before. the equity reports, we are still intending to update our equity assessments, as we have done for the last couple of years. again, describing our principles, priority areas, areas of concern from an equity perspective. there are some examples of information that will be -- that we will be updating, like layoffs, updated resources. i want to comment on the second set of points about this assessment of our work increasingly reflecting implementation of the district's strategic initiatives. we are getting much clearer. i want to acknowledge the work of the deputy superintendent and

others for pulling together some very thoughtful analysis of what it will take to implement, for example, the state standards, and for the first time, we have very detailed implementation plans for this type of work. we're looking forward to being able to share more information about that as we prepare this equity analysis. here are the next steps. the budget committee is scheduled for next tuesday. we will have the special meeting that is going to take place that same evening. the board will take a budget for a second reading in two weeks. the state, when that will take place, we do not know. especially because of the possibility of the veto by the

governor, whenever the legislature approves, the staff, we will analyze the budget after it has been enacted. the schools will revise their final budgets in september or october, audit the current process for the fiscal year. that will take place over the summer and wrap up in december. the first report for next year will take place in december as well. one final note. a couple of the events on the timeline which are not referenced here but i want to point them out. we do have some community engagement meetings taking place in the next couple of weeks. all of this information is available on the district website. we have to community meetings on june 18, which is a monday,

at third marshall high school from 6:00 of 7:00 p.m., and that thursday, june 21, also from 6:00-7:00, a meeting at everett middle school. we will also have our office hours for our third annual office review that will take place on june 18 from 2:00-5:00 p.m. anyone can e-mail us to schedule an appointment to have one-on- one or a small group discussed their concerns about the budget. we are looking forward to all of those. we want to thank our parent partners, our community partners for helping get the word out about these events and we are looking forward to good discussions in each of those. the last items are slides. you have seen these before. i do not want to belabor them, but it is important to remind

our community about the large picture, chronic under-funding that has taken place in the school districts in the state. these are perhaps that we trot out to drive those points home, about how severely we are being under-funded and the problem is being worse. with that, let me wrap up. i will encourage the board members that if you have questions, that you review the materials and review the budget document itself. please identify them and let us know. we want to be in as good a position as we can to respond to your questions, follow up. it is obviously easier for us to do that if we have those questions as soon as possible, so we are not scrambling to answer questions of an encyclopedic nature.

we will do our best for those types of questions as well. do you have anything to add? president yee: thank you, deputy superintendent. commissioner fewer: i wanted to know, what were the instructions at school sites? last year, we had scenario a and b. are school sites given this same kind of, this is doomsday, but planning for this? last summer, the notification to switch from scenario a to b was a little bit late. there was a scramble to redo the schedule. i am wondering about the timing this year. >> we did not send two sets of allocations out this year.

it becomes kind of confusing and hard to keep track of. last year, the state budget context was that there was a lot of speculation about whether the legislature would approve increasing taxes for it that was part of the governor's proposal, as early as january. there were months and months of speculation and political conversations about the assembly in the senate. we are going to follow the recommendation or that proposal by the governor. there were two votes short in both the assembly and the senate so that never materialized. all through the spring, that was an active possibility. that was the reason why we said the schools, plan for a and b. we do not know whether that action will be taken by the legislature. if it had been taken, we thought

we would know that sometime in the spring. what is different this year is that there is no prospect of a legislative action. it is all about the ballot measure that takes place in november. we would have no basis for any new information until november. because of that, it did not make sense to us to put schools in a situation where they had to pledge t onwo tracks. we would not have any more information not only in april, may, or june, but in october, then we have now. we have not subjected our schools to doing the same thing on their sights. commissioner fewer: we decided last year that we would not implement midyear cuts because it is disruptive. if we were to have midyear cuts

this year, are we going to do the same thing? >> this is a very important question. the approach that we are taking in our district, in this budget, in the recommended budget, is to plan the budget assumption as if the taxes are passing. at the same time, prepare contingency plans for what would happen if the taxes do not pass. there are several things that we would need to be prepared to do if the taxes do not pass. things like midyear cuts or spending increases will enter into the picture. a lot of districts, i will say, are taking the worst case scenario in mind now. in preparing their recommended budgets. they're planning for the taxes not passing and that they will be prepared to reinvest or

restore things in november or december. that is not the tactic we are taking. we are planning as if the taxes will pass. at the same time, planning for what we will do if necessary if the taxes do not pass. president yee: is there anyone who would like to make any comments? ms. manigold and mr. kelly. >> after all of the comment, i was waiting. the union spent some time looking at what was presented, not at the slide show but the actual presentation. we have some questions about

what is going on. one thing that is nice to see is from the initial proposal to us until now, the district has had a knowledge is an additional $11 million that have come in. that is good to know. we find it instructive to learn that the central administrative costs have also grown 4.3%. we are concerned about some things that directly affect us and our members that you find in exhibit 6, which is on your page 52 in that booklet. one of the things have to do with the expenditures, savings, and offset salary savings for lows. -- furloughs. if you look adopted budget, i think i read that correctly, to

say that there is $3,150,000 that was saved through the furloughs. if you look to the proposals for 2012-2013, it would be $4,750,000. according to what we paid for them, you will see this on the back of the first page, the second page. we paid $40 million out of our money for a eightfurlough days. the kind of simple division i can do comes out to one. -- to $1,750,000 per day. the number you have for fiscal year 2011-2012, if that is correct, those days only cost

$787,000. almost $1 million short. we do not know if that means we are getting a refund or if there's something else being done there. the next one we were concerned about is when you move over and look at the $4 million amount. that makes for a daily amount of 1 million, $187,000 -- $1,187,000. that is seriously different than the 1,000,107 -- $1,750,000 that we expected. we were confused about what the district is saying on exhibit 6. whether or not these constellations are accurate.

i would like to know what the accurate number is. salary items, if you move down a little bit, suspension of a sabbatical leaves and other escorted. it is well more than sabbaticals ever cost. what is meant by other there? and what that involves. the expenditure offsets, further down, the reallocation of proposition a. if you look at it, you will see the amount for professional development is not the same figure. it will be about the same number of people, but it is not the same figure. it drops by $300,000. we also do not see where a couple of other things were scored. for example, the proposition a,

para-professional development is not anywhere. and we do not see where the stipends are. we are concerned about the accuracy and consistency of what you have before you. one of the other points that underscores that was where it spoke of layoffs. only 60 people remain not recalled. if that is accurate, that has not been conveyed to us at all. we are a little suspicious of that. those are the kinds of questions that we are confused about. if this is the amount that you expect to get from the union, why do you have a different amount on the table for labor relations? what is the purpose? what kind of game is this? it is very serious to us. we do not know where your

figures add up in all this? i hope you will continue to address these questions. thank you. >> good evening. i am the education organizer for coleman added -- advocates. our top priorities have been shared with you a couple of different times. one of the things we recognize is is a tight budget year. in asking members to think about what is most critical to them, the things that we are always evaluating the district on is how you made progress in closing the achievement gap and what is happening with the graduating class of 2014? there are major concerns: has on both issues. you still have over 40% of

students in each grade level who are not proficient, basic, advanced. they are far below basic. they are being socially promoted through our system. though we have an internal assessment system, we are not seeing how what your spending in your budget correlates to the initiatives that you're putting in place to close the achievement gap. we're looking forward to seeing equity assessments with more details. however, we do ask that the board continued to be vigilant and pay attention to the fact that you are not closing the gap at the rate that we originally passed in the strategic plan. what do we do? for us, the primary concern is the class of 2014. this is a significant amount of students who are not prepared to graduate, who do not have the credits to move forward and go across the graduation stage.

what we are asking is to give us more accurate numbers of how many students are also trapped -- are off track. we're hoping to get these numbers by the end of this week to have a good discussion on tuesday about what the need is. things are want to reiterate is, i want to support commissioner wynns request. details to be flushed out more for next week's discussion. it is great to see what the categorical funding titles are and what the funding is going to be used for but we do not understand what programs have been cut, what programs are continuing within those funds. i want to piggyback on a couple of things around making sure that we get clarity of around strategic parties. and strategic initiatives, what

they look like as far as funding sources. what does access and equity funding source correlate to in the budget? i am really concerned about where the projection on a november ballot issue lives. it is a valid discussion that the community needs to be engaged in. if the ballot discussions do not ask, what are the proposals the district will put in place? i do not want to paint the picture to be something simple, but we have a couple of different scenarios. i want to be really careful that, assuming that they are going to pass, we have had lots of discussion about this, but there are three different options. you need to have public

conversation. passing the budget, assuming those are going to pass, which one? president yee: thank you. commissioner murase: i had three points of want to make. first, could you repeat the dates and times of the public community meetings on june 18 and june 21? >> yes. those are the dates. monday, june 18 is at thurgood marshall high school, 45 conklin st. the june 21 is at everett middle school at450 church st. both meetings begin at 6:00 and are advertised to end at 7:00. we