Budget Update

Welcome Back

Diana Keelen August 17, 2012 “While the California budget is uncertain, there is one thing that is certain, it will change.”

California State Budget

     Deficit is $14.7 billion Assumes the passage of Proposition 30: Schools and Public Safety Act in November Temporary sales tax increase of 0.25% and progressive 1-3% income tax increase for those making over $250K per year.

Polling is at 52-56% Competing with Molly Munger tax geared towards K-12 only

California Community College Budget

        Tax package would bring 4% additional funding each year or $3 billion to community colleges over the next 7 years It would provide $548.5 million alone in 2012-2013, including $50 million in growth-Timing may be a challenge Includes $28 per FTES in Mandated Cost Reimbursement RDA hold harmless agreement Deferrals are at $961 million-$159 million would be “bought down” If the tax package fails, college enrollment would drop by 85,000 FTES If the tax package fails, CC budgets would be reduced by $338.6 million If it fails, deferrals would be on-going

Antelope Valley College Budget

FTES Base Revenue Deferral Buy-down Scenario A: Tax Package Passes Scenario B: Tax Package Fails 10,499 $400-450K in growth funds 9,732 $3.4 million reduction $1.9 million of the $14.2 million No deferral buy down

General Fund Make Up of Revenue

Local 19% Federal 4% State 77%

General Fund Make Up of Expenditures

Capital Expenditures 1% Other Operating Other Outgo Costs 11% 4% Supplies 3% Employee Benefits 19% Classified Salaries 20% Academic Salaries 42%

Deficit Co-Efficient Trend

Deficit Co-Efficient Percentage 2007-2008 0.32% 2008-2009 2009-2010 1.19% 0.00% 2010-2011 2011-2012 2012-2013 Total 0.32% 2.35% ?

Amount Source -$180,331 Recalc dated 2/23/09 -$678,322 Recalc dated 3/18/10 $0 Recalc dated 2/17/11 -$185,559 Exhibit E dated 2/7/12 -$1,255,853 P2 dated 6/20/12 ?

-$2,300,065 ?

  

Deferrals

California Community College Deferrals now at $961 million AVC impact: Deferral total of $14,165,447 or roughly 32% of our apportionment.

For 2012-2013, we will only receive 40% of what we received in the first 5 months of 2011-2012 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

AVC Deferrals

$2,769,936 $7,560,021 $9,856,368 $11,892,686 $14,165,447

What happened in 2011-2012?

Reductions That Have Been Implemented

Initial Workload Reduction Additional Deficit due to $23 mil in base funding increase from 2009-2010 and 2010-2011 with no state funding increase (2 new colleges, several new centers and natural increases to basic allocation) Tier 1 Deficit Co-Efficent Tier 2 Additional Workload Reduction Student Fee & Property Tax Deficit Co-Efficient

2011-2012 Total Reductions Fiscal Year

2011 2012

Workoad %

-6.21%

Apportionment Base FTES

($3,223,949) 11,371 (706)

New Base

10,665

Head Count

(1,484) -1.55%

-7.77%

($129,285) ($309,085) ($741,526) ($817,483)

($5,221,328)

(166)

(872)

10,499 (348)

(1,831) Reductions That Will Be Implemented if the Tax Package Fails

Scenario B-No Taxes

Fiscal Year

2012 2013

Workoad % Apportionment Base

-7.30% ($3,490,876) 10,499

FTES

(766)

New Base

9,733

Head Count

(1,609)

2012-2013 Potential Reduction Total Reduction + Potential Reduction for 2011-2012 and 2012-2013 Only -7.30% ($3,490,876) -15.07% ($8,712,204) (766) (1,638) (1,609) (3,440)

Assumptions: Does not include potential property tax or student fees shortfall in 2012-2013 Does not include a deficit co-efficient in 2012-2013

2012-2013 Draft Adopted Budget Assumptions

       No COLA No Growth, although if tax package passes, there is about $50 million in growth or ~$400K $450K to AVC Scenario B with tax package not passing Continued deferrals of over $14 million No deficit co-efficient Continued deficit spending reserve-Need a plan Risk of falling below 8% reserve next year

Budget Changes from 11-12 to 12-13

Exhibit A 2012-2013 Expenditure Changes and Budget Reductions Adopted Budget

Change

Social & Behavioral Faculty Retirement Math, Sci & Eng Faculty Retirement Language Arts Faculty Retirement Social & Behavioral Faculty Retirement Learning Specialist Retirement Adjunct backfill of Faculty Retirements Performing Arts Tech to Mgr 3 Custodians 2 Skilled Maintenance Workers Electrician Caravan Reduction due to Health Fee Implementation Workload Reduction-584 FTES PERS Rate Increase, 10.92 to 12.12% Legal Fees Reserve TRAN Interest Reserve Equipment Reserve Step & Column VP Admin Services Replacement Difference H&W Reduction Above Cap Solar Project Loan Payment Increase Energy Loan Commission Increase in Security Contract Reduction of Election Costs Elimination of Registration Cards Reduction of Blackboard Reduction of Ebscohost Reserve for Retiree Health Liability Increase in CDC Support Redevelopment funds to pick up Central Plant Loan Payment

Total Increase (Decrease) Increase

$200,000 $7,588 $167,697 $136,168 $72,169 $120,000 $42,000 $80,000 $100,000 $284,456 $37,174 $6,800 $45,702 $250,000 $5,028

$1,554,782 Decrease

($128,671) ($113,033) ($73,174) ($125,058) ($147,392) ($57,000) ($822,500) ($457,418) ($65,073) ($413,439) ($33,477) ($164,695) ($20,000) ($452,896)

($3,073,826) Total ($1,519,043)

2012-2013 Draft Adopted Budget & Projections Preliminary Figures/Unaudited Actuals As of 8/13/2012

If Tax Package Fails 2011-2012 2012-2013 2013-2014 2015-2016 Beginning Fund Balance

$8,791,347 $7,502,547 $4,241,914 $43,462

Revenues Expenses Ending Fund Balance Reserve %

$55,414,411 $56,703,211 $7,502,547 13.23% $51,923,535 $55,184,168 $4,241,914 7.69% $51,923,535 $56,121,987 $43,462 0.08% $51,923,535 $55,851,020 ($3,884,023) -6.95%

Surplus/(Deficit) If Tax Package Passes ($1,288,800) ($3,260,633) ($4,198,452) ($3,927,485) Beginning Fund Balance 2011-2012

$8,791,347

2012-2013

$7,502,547

2013-2014

$7,732,790

2015-2016

$6,661,310

Revenues

$55,414,411 $55,814,411 $55,694,818 $55,694,818

Expenses

$56,703,211 $55,584,168 $56,766,298 $57,068,961

Ending Fund Balance Reserve % Surplus/(Deficit)

$7,502,547 13.23%

($1,288,800)

$7,732,790 13.91%

$230,243

$6,661,310 11.73%

($1,071,480)

$5,287,167 9.26%

($1,374,143)

2013-2014 and beyond assumes 4% increase if tax package passes will most likely go to deferral buy down

Questions?