>> hello, we are back from a

quick recess. the budget and finance committee. we completed items 1-9. and so we will be resuming the rest of the agenda. i believe that we have the moscini items left. and to my understanding that they are okay with us calling item 12 out of the order, is that correct? okay. mr. clerk, call item 12 please. >> item 12. >> thank you, this item is brought to us by supervisor kim. do you have opening comments to make? >> i do, because we have many members of the public that have been waiting for a long time. i want to get to the presentation. this is a discussion i brought up back in the budget cycle in

june of this year. how we were to absolutely fund our essential services, whether our public schools. and given the cuts from the state and federal level. i know that many of our services and departments have received cuts. but it's important for the families and youth to give them support to succeed. and this supplemental is from discussions over the months. to allow how the funds are best utilized to ensure success. and our superintendent, richard, his first year as our superintendent. i am excited to see you in leadership at sfsub. >> thank you, for the opportunity to be here, this is a truly an honor. as i go around the community and talk about the partnership we

have with the city of san francisco. it is truly an honor to be here and share some information with you. we would like to do this afternoon is share information around a-g, and a critically need for the school district. which is graduating our school students. and graduating students that are prepared for post-secondary education. as we know that education is part of the fabric of this community. as an overview of what we will present this afternoon. i would like to give you a contents of a-g requirements and the status of the first graduating class that will have to meet the a-g requirements. i have colleagues here who will talk about the budget. that will give you an update on our budget status and how the budget cuts have affected our a-g progress. and our assistance high school

principal will talk about concrete immediate actions associated with this appropriation. with that by way of context the board of education approved a policy in 2009 to raise the graduation requirements so all students graduating from the school system would meet uclg requirements. that was gone so that once they gra grade -- graduate and receive university admission. the policy was that equity and goals should be for all students. and the class of 2014 is the first class to graduate with these new high school requirements. this year's high school juniors. but what is sad at the same time.

in 2009 to the present when the policy was passed. the district has had over $77 million in cuts to funding. that devastated the district's ability to provide the safety net that every student is on track for a-g. and we have been impacted through this action plan. i receive the question if the passage of prop 30 fix it. there are no new funds with prop 30. what it does is stabilize the base. and the base is an old base. it's not restoring anything. it's starting the hemorrhaging, if you will. >> before you go forward. i think what is not clear to me. so i understand that the a-g graduation policy was put in place by the school board previously. i think that many members of the board supported that concept as

well. when you say that the funding cuts have hampered the progress of a-g. i am not sure what that means. what would a-g or creating that requirement mean? would the school district have to increase instruction or what is not moved forward? >> thank you for that question, supervisor chu. i mean there is a safety net to increase the rigors for graduation. there is a higher bar to get a diploma. and associated with that is a series of safety nets to get this rigorous diploma. part of that it eliminated seven periods, and now our high schools have six periods per day that a student can take as a full class load.

and when you eliminate classes and that eliminates the periods. and if a student doesn't do well in an a-g class and the elimination of a period prevents them from taking that class again. and we had to eliminate all evening school options for our students. we eliminated summer school options for the students. so there is a number of constraints that we would have continued to fund and have limited to students because of the decreased funding associated with the funding of the school district. and coincided with this a-g policy. we will share more details with you throughout the presentation. and at this point i would like to ask deputy superintendent lee take us through the slides and the budget and the current state and how that affects this

potential appropriation. >> thank you, superintendent and thank you supervisors. i will speak to one slide, it's a story, it's a graph that tells an important story about the history of our funding over the last five years. and some of you i believe have seen this before. so i appreciate you indulging me. and this revenue funding is the primary source of funding for school districts in california. most school districts including ours. and the left of that chart is from fy-2007-08. and it show that is we received on per unit average daily

attendance funding of 5776 per student. six years ago. and the top line, the blue line shows what the state should have funded per unit of ada to meet their statutory cost of living adjustments. that's based on a formula in statute. and it's representing what we should receive year to year. you see from 07-08 from that level of 5776, cola did increase each year. and in 12-13, the current fiscal year, we should receive $6,697 per unit of ada or student. and that has not happened. and what has happened is the

orange line. that shows the actual. not inflation adjusted. just the actual amount of revenue funding we have received for each student. instead of going up and matching the blue line or even staying flat. matching the purple line. we have seen significant reductions shown by the orange line. we went from 5776 to 5326, a steep drop in the following year, 09-10. and a little loss recovered but then treading water since then. that last line, 12-13 where it splits between the 5204 and the 4764 level, that represents the outcome of prop 30.

if it had not passed, we would have additional reduction of more than $400 per student in the middle of the fiscal year. because it passed, we are able to avoid the cuts and maintain the funding we had last year. but it's not an increase in funding compared to prior years. this orange line started off at important but not cataclysmic different or short fall from the statutory funding levels in 08-09. but that widened, this gap has widened. and when the superintendent mentioned we have a $77 million gap. now if you compare the 6997 that we should receive. and 5204 that we are receiving.

you multiply by the total population of the district, that's $77 million less we are receiving than from the state this year. this will probably occur for the foreseeable future. this is really the best encapsalation of what the state, how far the state has fallen short for funding of schools for the last four to five years. if you take the gap from 5776 level in 07-08, and the difference each year and added compared to the purple line, flat funding. we have lost $146 million of these funds since 07-08. just in terms of maintaining a baseline that it would be far short of the state's responsibility to fully fund education. another term for this gap between the blue and orange

lines is the deficit factor. it's a term in california school of finance. and that is now over 22%. so for every dollar of baseline revenues we should be receiving, we are receiving 78 cents of funding. and that is being scored and tabulated each year by the state. and it is hopefully going to be restored over time. but in the past six years we have been making do with the resources you see on this chart. >> just to clarify, that's the projected statutory cola, the difference between that and the orange line? >> that's correct. >> and that's what is calculated with the state and hopefully there is repayment of that gap. >> correct, supervisor. just a couple of other points that are pertinent to the item before you. in the spring of 2009, was when

the board of education passed its a-g graduation requirements. you see in this context that was right before this precipitous decrease in the state's funding for schools. the board of ed passed the graduation requirements in may of 2009. the budget from the state for fy-09/10 had not yet been passed. and that occurred several months later. and the result of that budget, you see the significant decrease in funding. that's one point to note. and as the superintendent mentioned in that fiscal year, 09-10, we did make reductions to close this gap. which we are abruptly faced with. many reductions across the

budget, including credit recovery and summer school and evening school. that's the historical back drop for the situation we are in now. and you will hear from dr. schultz a lot of emerging strategies how we hope with the city's support to help the class of 2014, as many as possible to meet the a-g graduation requirements. supervisor chu asked that i address the issue of school direct -- district refer -- reserves. in the last the budget was $150 million. and that includes $6 million of required reserves. we have requirement for the positive certification from the

state. of 2% of our total general fund expenditures. and we have certain other designated reserves for prepaid health care prem yiums. that's about $15 million. if we fall short of that we are subject to state intercession. and we meat -- met and exceeded that requirement. we have a structural deficit for the current fiscal year and the years 2013, 14, and that is $34 million each year. our projections is now that we will reduce that fund balance in the current year to about $26 million at the end of the current fiscal year.

and next year that we will -- if we don't take very serious steps to reduce expenditures or increase revenues, that we will actually have a negative ending fund balance of $4 million. and considering that we must maintain a positive fund balance of $15 million, that will give us short fall. >> just to be clear your reserve is $50 million dollars and 15 i required. and at the end of this year you expect to be at a level of $26 million. >> correct. >> what is the balance you used to plug your budget this year? the difference between the 50 million and the 26 million.

you are using the reserve to balance. >> correct, drawing down reserves to reducing the fund balance by that amount. >> okay, and i guess the other question, it's clear in terms of summer school that was cut and evening school. those are areas where the school district decided to make cuts when you received cuts from the state. and it was mentioned that you moved from seventh period to sixth period issue and what was that related to? >> it wasn't a policy that we applied uniformly to our schools. however, in our district we have still a fair degree of site-based decision making

around how each school establishes its budgetary priorities. we allocate funds every year to each school and they have to make decisions about how they invest those funds. it had been the case in several schools that historically had been able to create a seventh period schedule during the day. each student taking six courses. and as the funding was diminished by the state. and we had to respond, as the district. we also had to reduce our site budgets to a certain extent. in several cases as we limited the amount of discretion that individual school sites had in their budgets. several of them made reductions in their schedule. going from a seven-period day to

a six-period day. not all schools had a seven-period day to begin with. but of those that did, they had to reduce to sixth period day. that's not something that we mandated but as they determined their budgetary priorities and try to reduce their budget, several did reduce to a six-period day. >> thank you. >> i believe that dr. schultz will give the details. >> good afternoon, supervisors. thank you for having me here, having us here. i will talk today about the action steps we are taking both immediate. and also if there is any longer term systemic questions you have. in terms of the immediate needs

around the class of 2014. that's the first class under the new requirements. the first step is to clearly define where the students were in making progress towards the new graduation requirements. and to define to help us with a plan to reach the students to see which ones a little off track. which ones are longer and what courses are needed. and within that also developed individual plans for students, community outreach and a plan for expanding opportunities for students to earn those credits. and then we added in an accountability piece to make sure we are holding ourselves accountable to ourselves and the community. it becomes pretty complicated. and if use any terms that are sort of educationesque,

interrupt me and ask for clarity. looking at students and seeing on track and off track and terms a-g and graduation requirements. there are a few things to understand, that our graduation policy is aligned with the university of california requirements. and they require that students pass all courses with "c" or better. our requirements are that they pass with "d" or better. along with a-g, we are required for graduation requirements such as p.e. and our own requirements of college and career and health courses. when you look at students in high school you don't progress with age but by credits. no matter your age, you have to obtain credits. you don't become a 10th grader

until you have 55 credits. and you don't graduate until you obtain 230. you can have credits but if they are not in a class with graduation requirements. you still won't graduate. if if you are missing what we call benchmark classes. core classes that are required for graduation. such as four years of english and two of math and sciences, etc., you will not graduate. so that context is important in terms of looking at our students and where they are towards graduation. our first group of students are students on track. they are a current group of juniors. and we are doing this data on a junior class, and now we have run this on our current sophomores so we can track their progress as well. in our current juniors you

should have 110 credits if you are on track. but you should met your benchmark courses. meaning two years of core english and math and science and social studies classes. if you have your credit but you are missing benchmarks. again you may appear to be junior by credit. but you are not on track for graduation. because you need to have those required courses. and that's the second category. and if you are off track, and a year or less behind in credits than where you should be entering high school. if you are moderately off track, you are two years behind and severe is those in third year of high school but haven't completed what someone would expect after one year. if you look at the chart, you

can see overall data. we made the chart in two ways. the one on the right is graduation requirement. where it says a-d, those are the grades. the students have met those requirements with a grade of a-d. and the chart on left if they made those a-c, those are uc eligible as opposed to graduating. the dark green are the students on track, 2,216. those students are current juniors. they have 110 credits and they have met all of their benchmark classes. they have taken the classes we expect them to take on graduate on time. the next largest group of students, 1,119. in the light green area.

those students have the credits but missing the courses required for graduation. that could be because they failed it or from another district. in general they are attending and achieving credits. but if they don't make up the benchmark courses, they won't graduate. and then the other categories where we have 7% of our students, 296. those students are one-year behind. and you see we have set targeted outcomes and goals for the students. but typically those students end up in our continuation schools. but with opportunities to achieve credit recovery through evening school and dual enenrollment. they can graduate if they take advantage of multie