Transcript 2010-11 Budget update

Board of Trustees Presentation
Budget update
April 5, 2010
FY 09/10 reductions that have been
implemented: (in August 2009)
$6.7M has already been eliminated from 09/10
operating expenses:
• 68 filled/vacant positions eliminated (escrow funds were set aside to cover
•
•
•
•
35 positions through 6/30/10)
Funding for 16 positions reduced or reassigned to different funding
sources - Categorical Programs (Fund 121), Self-Sustaining (Fund 115) or
Measure C (Fund 400)
4 positions restructured/reorganized due to retirement
$312,655 in “B” budget reductions
$200,000 reduction in faculty reassigned time funding
$2.6M in part-time faculty costs reduced due to
workload reduction (5%)
Even after the 09-10 reductions we still had a
deficit we were carrying with one time reserves
Early look at 10-11 budget
(in November 2009)
Income
Expenses
What other changes do we know of at this
point? (in December 2009)
Probable agreement on benefit restructuring to reduce our
2010/11 expenses by $5.3 million (remember, our last estimate
for our 10/11 deficit without further state reductions and other
operating cost increases is $8.1 million)
Probable loss of about $1 million this year due to FTES audit,
statewide recalculation of growth for last year and a slight
shortfall in non-resident revenue
Cover the cost of part-time faculty equity, office hours and health
benefits payments for 09/10 due to the loss of categorical funding
… approximately $1 million
Revised estimate of 10-11 deficit,
after benefit settlement (in mid December)
Distribution of estimated cuts needed
for 10-11
What has been done to address the
cuts for 10-11 (in March 2010)
Further B Budget reductions where possible
Redirecting salaries to bond program, categorical programs,
and self sustaining funds where legally and fiscally possible.
(Not necessarily a long term solution)
Re-organized services and departments (for example: De Anza
reorganized their student success program which eliminated 43 filled and vacant
positions (mostly part time positions), while creating 6 new full time positions)
Identified filled positions that would have to be eliminated to
bring operating revenue in line with operating expenses
About 34 positions were identified for elimination on 6/30/10
15 positions are filled and 19 are vacant as of 3/22/10
Created “Escrow II” that would carry 27 filled positions to 6/30/11
 IF… no deep cuts in state revenues and,
 To allow time to absorb these positions back into the general fund
Strategic Plan for Use of Fund
Balance and Reserves (est. as of second qtr)
General Fund
Maintain 5% reserves ($10.3M)
Continue to allow for colleges and Central Services restricted
carryover ($4.4M)
Restrict District-Wide carryover for EIS implementation,
union negotiated items, election costs ($1.6M)
Restrict portion of Stability Funding for Escrow II ($2.0 M)
Maintain any remaining Stability Funding for any potential
state cuts ($6.4M) or to carry Escrow II positions through the
11-12 fiscal year.
Strategic Plan for Use of Fund
Balance and Reserves (est. as of second qtr)
Internal Service Fund/Benefit Fund
Maintain $2.0M operating reserve
Reserve $500,000 for negotiated post-97 Health
Benefit Reserve for FA and ACE
Restrict $273,000 for Extended Sick leave and
Vacation Payout reserve
Maintain any remaining unrestricted funding for rate
stabilization (goal to retain approximately $5.0M)
Reserves and unrestricted fund balance (estimates
based on second qtr end report)
New revenue strategies
Board may hire a “polling company” to test for
feasibility of a parcel tax
Staff is creating a stronger grants office to try to
secure additional state, local and federal funding.
Funding for these expenses are to be covered
from new grants and or redirecting existing staff.
Foundation Board is actively engaged to raise
money in light of this fiscal crisis
Cost savings measures
Photovoltaic installations
At the March 8 Board meeting, the trustees
authorized staff to proceed with the installation of
the PV expansion project, funded from bond money,
at Foothill in the summer of 2010.
In addition to conserving natural resources, we anticipate
an annual savings of $250,000 upon project completion
About ½ of these savings may accrue in the 10-11 year.
Future plans include a similar size project at De
Anza in the summer of 2011.
Next milestones
The Governor’s “May Revise” may provide more
information about health of the economy, and
potential cuts to Community Colleges.
August, the district will close its books and have a
final number on carryover and unrestricted reserves
Sometime between June and September, the
Governor will sign a new State budget for 10-11.
Risks
Will the state cut our budget for next year.
Best case scenario: No additional cuts to state
revenue
Worst case scenario: ???--The only reference point is
that last year we received a cut of $5.4 million in the
general fund and $7.9 in the categorical fund. We
received this news on July 28, 2009 for the fiscal
year that already started
When will we know our state revenues for 1011???????
Medical benefit risks
Through our agreements with the unions, we are
committed to covering the costs of benefits for 1011 and 11-12 without further changes to our benefit
program
We have estimated that we would have about $5
million in the medical benefit fund in July 2010 to
fund these increases.
Hopefully this will be enough money to cover two years
of the medical benefits increases through June 2012,
BUT
This is only one time money so ongoing solutions would
have to be found prior to June 2012.
Unknown effect of pending federal health insurance