BUDGET COMMITTEE MEETING August 17, 2016 Fireside Room 2:00-3:30 p.m. MINUTES

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1 1 BUDGET COMMITTEE MEETING August 17, 2016 Fireside Room 2:00-3:30 p.m. MINUTES CALL TO ORDER: The meeting was called to order at 2:00 p.m. by Committee Chair, Morris Rodrigue. ROLL CALL: x Jill Ault x Sara Holmes x Morris Rodrigue Russell Eleck (Student Rep.) Don Cingrani x Lynda Little Kathy Royce x Kendall Crenshaw x Tom Masulis x Susan Schroth APPROVAL OF MINUTES: May 18, 2016, Masulis/Little. Discussion- a few edits were made for clarification. Motion carried unanimously. PUBLIC COMMENTS: None REPORTS: Statewide Budget Update Morris informed the committee that the state budget passed over the summer, gave an overview and addressed the following key items: There is a 2% increase in growth dollars. We would qualify for the increase if we exceed our cap of 7270 FTES. If we achieve our cap this year, and also grow beyond the cap, we could potentially be funded for 7315 FTES is the most we could be funded, unless there is leftover growth dollars. At this point in time Morris said he doesn t see us reaching 7315 FTES. He thinks we will hit in the 7000 s and there is potential to be as high as Dual enrollment numbers could help us reach the 7000 s. It is likely that we will not tap into growth funds this year. Susan asked how much the ACE program contributes to the budget. Morris said he doesn t know at this point, but all program dollars help. The State budget included $75M in budget for general operating expenses. This helps with STRS and PERS increases. The increases could be close to $420K ongoing locally. One reason we came in better on the budget for is because the state back-filled a property tax shortfall. This resulted in a zero deficit factor this year, which is unusual. In we had a large amount of income for mandated reimbursement that affected the budget, for we are receiving significantly less. We have a large amount in categorical funds; this is significant and will help out our CTE programs. We will receive over $1M that will help with maintenance and instructional equipment. We will have three (3) years to expend these dollars. Overall this is a great increase from years past. These are unprecedented amounts (see attachment). Susan asked what types of things we do to cut back on the District budget. Morris said one thing we have done is a fair amount of cutting back on watering and have implemented the solar field, which has helped reduce the utility costs. If the bond passes in November, some of the bond dollars could be used for installing drip systems, and we will be strategic about the landscaping, being more sustainable and conservative so we will continue conserving water. Over the last couple of years we have cut back the District water usage by close to 30%. DISCUSSION/ACTION-

2 BUDGET COMMITTEE 2 Proposed Final Budget Morris said the final budget will go to the Board of Trustees on September 14th. College Council will review on September 9 th. Morris said to keep in mind that there could still be other things that impact the final calculations. Jill has spent a lot of time on this budget and managed to trim it quite a bit. Page 4, Fund 11, the TCR is our best estimate. There was a prior year adjustment of income based on an assumption. The TCR is made up of property taxes, timber taxes, enrollment, home owners exemption, and then balanced out by the apportionment. Page 2, under income, there is a noticeable difference in Lottery dollars, we budgeted $900K, and we ended up with over $1.12M. Under miscellaneous local income, a portion of this came from the Gateway to College program. These dollars are more flexible and can be used in various ways. The TCR was shored up by property tax backfills. Nonresident tuition has increased (out of state and out of country students). Page 3, under salaries, there has been a lot of categorical funds available and we were able to offset Fund 11 with Fund 12-Categorical Funds, and we came in under, more than normal. Between the income and how far we came in under, we could have come in $4M in the black for , but later in the spring of 2015 the Board authorized an additional $700K for both Employee Benefits and Other Outgo. This resulted in being able to deposit approximately $1.9M into the trust and transfer almost $700,000 to capital outlay. The benefit of depositing additional funds in the trust is it protects us down the road and in or if we don t hit our targets. We could use funds from the trust on retiree health expenses. This is not something we want to do at this point, but it could be an option, it is a safety net. In the long term if the interest pays the retiree health benefits then we could have money in the General Fund that could support positions. If we didn t fund it at all, we would be getting a drag of $4M dollars on our total budget. In the long term, it will allow us to draw from the trust and reduce what we are paying out on behalf of retirees. We spent some time on expenditures for salaries, pulling all the information for salaries on Fund 11, and then looked at hiring recruitments that were not included in the initial migration, and added those to the list. We are trying to get a better look at the dollar amount for salaries and what to project, as well as tightening up STRS and PERS. The last time we looked at the tentative budget we had a $2.4M budgeted deficit. It is now down to $1.4M. Area Plan items are not included in the budget. The President is in the process of approving Area Plan initiatives, and up to this point there could be about a $74K increase to the budget coming from Area Plan initiatives. This will increase the budgeted deficit. Also, the District is still in negotiations with both unions for , and depending on the outcomes of the negotiated contracts, this will be another factor to consider. Morris said one thing to think about is if we expended all $1.4M, we would still end up with a 20% ending fund balance. We are in a more comfortable position now than where we were with the tentative budget number. Susan asked about out of state tuition and how it works for out of state online students. Morris said out of state online students pay out of state tuition fees. Susan asked how the bond measure, if it passes, will impact the budget. Morris explained that in general it would not impact the budget directly, but it could have an impact down the road. One example would be if we bring in more solar it would free up energy dollars. If we refresh buildings, it will reduce the staffing for maintenance because newer buildings take less to maintain. Jill said she believes the budget as presented today is solid except for Fund 12-Categorical Funding, which is still in motion. There is over $1.9M in categorical dollars. A great deal of this funding is restricted, meaning dollars need to be spent in certain categories. The Prop 39 energy projects included the Red Bluff project, and walkway lighting on the Tehama Campus, and there might be some dollars left over next year. Redevelopment dollars go out to pay the Lease Revenue

3 BUDGET COMMITTEE 3 Bond, so it is set aside. Morris said one of the President s initiatives in the Area Plans is to put funds into future big ticket technology items. There is potential for $675K to get divided and used in the Area Plan initiatives. Jill said she will put an asterisk (*) with a note on the General Obligation Bond for clarification. On page 12, Transfer from General Funds is for vehicle replacements and other items. Morris reminded the committee that some of the dollars generated for field trips also goes into the fund for vehicle replacement and maintenance items. Morris asked for a motion on recommending the budget as presented today, with the understanding that the President may still make adjustments with hiring and Area Plans. Schroth/Crenshaw. Discussion- none. Motion passed unanimously. Administrative Procedure 6305-Reserves- This item was tabled until the next meeting. Membership- Don, Lynda and Tom have been renewed and are on a three (3) year cycle. All other members are on a midyear cycle. Kathy is up for a mid-year cycle, and we are waiting on the President to review his plan and administrative committee structure for the year before her potential reappointment to this committee. ANNOUNCEMENTS: None ADJOURNMENT: Little/Ault 2:55 p.m. NEXT MEETING: Sept. 7, Respectfully submitted, Sherry Nicholas Executive Assistant/Recorder

4 Shasta-Tehama-Trinity Joint Community College District Board of Trustees Administrative Procedures Manual Reserves AP 6305 Reference: Budget and Accounting Manual, Chapter 5, Appendix A The District maintains a minimum 5% of annual expenditures as recommended by the State Chancellor s Office. In addition, every effort is made to maintain a prudent reserve above that minimum 5% to allow for careful cash management. Reserves are designated for debt service, legal restrictions, and special purposes as deemed necessary by the Administration and approved by the Board. Board Reviewed 8/18/10 AP

5 Shasta College Budget Committee DATE: Membership Terms Term Administration Comments/Notes 1 Rodrigue Morris 2 Ault Jill N E Replaced Nancy Funk Royce Kathy N E R? Faculty 1 Cingrani Don R E R Renewed (3 yr term) 2 Crenshaw Kendall R 3 Masulis Tom A R E R Renewed (3 yr term) Classified 1 Little Lynda R E R Renewed (3 yr term) 2 Schroth Susan E Replaced Sheyanne Bailey Holmes Sara A E R Renew? A Appointed N New E End of Term

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7 SHASTA-TEHAMA-TRINITY JOINT COMMUNITY COLLEGE DISTRICT BUDGET COMMITTEE MEMBERSHIP Administrators Morris Rodrigue, Vice President of Administrative Services (Chair) Jill Ault, Comptroller Kathy Royce, Dean of Health Sciences Faculty Don Cingrani Kendall Crenshaw Tom Masulis Classified Sara Holmes Lynda Little Susan Schroth Student Vacant BYLAWS Ten (10) Voting Members: Vice President of Administrative Services (Chair) 2 Administrators 1 Dean and the Comptroller preferred 3 Faculty Members 2 Instructional and 1 Non-Instructional preferred 3 Classified Members 1 Academic Affairs, 1 Administrative Services, and 1 Student Services preferred 1 Student Sln