March 2015 Board Budget Update

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Vernon Cole
5 years ago
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1 Please find below a Summary Report and Monthly Expenditure Chart for the Unrestricted General Fund summarizing the College s financial activity for fiscal year as of February 28, These summaries present expenditure activity both by functional activity as well as by major account classification as defined by the State. Working Year to Date Activity Encumbrances $ Under/(Over) Prior Year Activity as of 02/28/2014 Revenues Federal Revenue State Revenue 102,303,269 58,325,092-43,978,177 66,720,157 Local Revenue 96,326,754 64,768,992-31,557,762 71,378,772 Transfers In 2,800, ,800,000 - Total Revenue 201,430, ,094,084-78,335, ,098,929 Expenditures Faculty Salaries 82,393,355 53,028,359-29,364,996 53,273,691 Administrative Salaries 6,463,954 4,310,064-2,153,890 3,634,367 Classified and Other Nonacademic Salaries 38,223,813 24,596,561-13,627,252 23,540,488 Employee Benefits 46,338,443 26,660,228 83,790 19,594,425 27,719,117 Supplies and Materials 1,847, , , , ,491 Other Operating Expenses and Services 18,606,938 10,380,245 5,684,792 2,541,901 8,989,136 Capital Outlay and Equipment 1,040, ,767 81, , ,944 Transfers Out/Other Outgo 6,515,953 5,597-6,510,356 1,618,476 Total Expenditures 201,430, ,744,817 6,382,969 74,302, ,179,710 Expenditure Summary by Activity Instruction 115,283,329 73,752, ,520 41,108,704 72,796,225 Student Services 18,575,149 11,372,887 69,746 7,132,516 12,172,148 Operating and Maintenance 23,896,706 14,161,935 3,158,726 6,576,045 14,019,230 Planning and Policy making 9,403,533 4,483, ,586 4,480,988 3,660,454 General Institutional Support 34,271,306 16,973,931 2,293,391 15,003,984 17,531,653 Total 201,430, ,744,817 6,382,969 74,302, ,179,710 1

Expenditures by Month Through February 28th, or 66.67% of the fiscal year, the College has expended and encumbered 63.11% of the Unrestricted General Fund budget.

2 Expenditures by Month Through February 28th, or 66.67% of the fiscal year, the College has expended and encumbered 63.11% of the Unrestricted General Fund budget. The Restricted General Fund is used to account for resources available for the operation and support of the educational programs that are specifically restricted by laws, regulations, donors, or other outside agencies as to their expenditure. Such externally imposed restrictions are to be contrasted with internally created designations imposed by the governing board on unrestricted moneys. Please find below a Summary Report for the Restricted General Fund summarizing the College s financial activity for fiscal year as of February 28,

3 Restricted General Fund Working Year to Date Activity Encumbrances $ Under/(Over) Revenues Federal Revenue 11,324,623 3,173, ,151,126 State Revenue 14,435,869 4,514,643-9,921,226 Local Revenue 9,042,966 3,783,924-5,259,042 Transfers In Total Revenue 34,803,458 11,472,064-23,331,394 Expenditures Certificated Salaries 10,544,072 3,828,615-6,715,457 Classified and Other Nonacademic Salaries 7,428,416 3,619,330-3,809,086 Employee Benefits 4,484,191 2,095,624-2,388,567 Supplies and Materials 2,344, , ,175 1,698,337 Other Operating Expenses and Services 6,848,382 2,103,586 1,415,648 3,329,148 Capital Outlay and Equipment 1,399, , , ,931 Transfers Out/Other Outgo 6,334,351 1,800,544 1,412,964 3,120,843 Total Expenditures 39,383,017 14,238,855 3,329,793 21,814,369 Statewide Outlook According to the March California Department of Finance Bulletin, General Fund revenues for February 2015 are exceeding the Governor s State projections, with total tax collections for the month coming in above the forecast level by 3.4%, or $160 million. Total General Fund revenues for the first seven months of the fiscal year are also exceeding the revised forecast with tax receipts running $633 million, or 1.0%, ahead of the Governor s estimate. The personal income tax for February provided the bulk of the increase over estimated revenues, at $1.853 billion, which is $512 million (27.6%) higher than what was estimated. The additional revenues over compensated for deficit receipts in corporate and sales taxes, which were short $337 million and $59 million, respectively. The state unemployment rate dropped 0.2% to 6.9% in January, and down by 1.2% since January of The Finance Bulletin noted that January s unemployment rate is the lowest since May 2008, and the unemployment rate in California has fallen faster than the nation s unemployment rate. California added 67,300 nonfarm jobs in January, which is the 43rd consecutive month of job gains. Additionally, the number of unemployed Californians fell by 32,500 in January, which the Finance Bulletin notes as the largest monthly decrease since September

4 City College Beginning in January 2015, the college has started the development of the fiscal year budget in accordance with Board Policy and Administrative Procedure The assumptions developed guiding this effort are presented below: Assumptions Tentative These assumptions will be used to develop the Tentative in accordance with Administrative Procedure 8.01 Preparation and Fiscal Accountability. General Assumptions 1. The tentative budget will be balanced. 2. The adopted budget will have a contingency reserve (Board Designated Reserve) of $1.2 million. 3. The College will use plans, program reviews, planning documents, and planning processes as a basis for the development of expenditure budgets. 4. Any restricted funding cuts or cost increases must be borne by the respective program. 5. The budget will be developed taking into consideration that the District continues to receive stability funding. Unless enrollment increases to or exceeds 30,990 FTES by June 30, 2016 further expenditures reductions will be necessary. Revenue Assumptions 6. General apportionment deficit factor of 1% for (5 year average), $1.55 million. 7. Continued stability funding per SB 860 a. For fiscal year , funding level not less than 95% of what was received in fiscal year $7.82 million reduction compared to fiscal year Equates to approximately 1,222 credit FTES workload reduction. 8. Enrollment growth/access funds of 0% for The Cost of Living Adjustment (COLA) of 1.58% for $2.2 million. 10. Increase in the CDCP funding rate to match credit funding rate - $9.9 million. 11. Augmentation received in recognition of increased operational expenses (See # 19) - $2.9 million. 12. Full Time Equivalent Student (FTES) base of 30,990 comprised of: 21,484 credit, 2, non-credit, and 6, enhanced non-credit (CDCP). 13. Anticipated property tax receipts of $54.4 million. 14. Unrestricted lottery at $ per funded FTES. 15. Continued Measure A Parcel Tax revenue of $15.2 million. 16. Continued Sales Tax Revenue of $16 million. 17. Continued Proposition 30 State funding of $23.9 million. Expenditure Assumptions 18. The District intends to meet all negotiated contractual obligations. 19. Hiring chill. Current funded vacancies will remain vacant through the Fall 2015 term. Any exceptions to this must be evaluated and approved by Chancellor. 20. Projected step and column salary increases of $2.2 million. 21. Projected STRS contribution of 10.73% (increase of 1.85%), SFERS contribution of 23.26%, and CalPERS contribution %. Total cost increase of approximately $2.1 4

5 million (SFERS new rates will be available in April 2015). 22. Increase in Medical premiums on average of 3% up to District cap - $690,000 (4 year annual average increase Actuarial assumptions in OPEB report project 4%). 23. OPEB required contribution of $2,500,000. This is in addition to $7.7 million budgeted for pay-as-you-go obligations. 24. Continued allocation of $2.0 million to Buildings and Grounds for maintenance items. 25. Continued allocation of $2.0 million to IT for technology related priorities as identified by program review. 26. Program review will be used to prioritize staffing. These assumptions have been wide disseminated and discussed with many constituencies including the PGC (Participatory Governance Council). While there are many positive assumptions and aspects of this budget it does contain a large amount of risk. This risk is principally associated with the current trend of declining enrollment. In January we submitted our enrollment report to the State projecting annualized FTES of 23, This report was the first of three that will be submitted this fiscal year communicating to the State our current enrollment environment. If it were not for SB 860 (our extended stability funding authorization), this would have a more direct impact upon our finding. Under the framework of SB 860 our funded FTES for the current fiscal year, FY , is 32,621 FTES. Simply comparing this funded FTES level to what we communicated to the State in January, SB 860 is providing us with 9,077 FTES of extended stability funding for the current year, or $38,509,689. To put this reduction in perspective, this 9,077 drop in FTES is greater than the total FTES generated by 25 of the 72 other districts (35%) in the State of California. Going into fiscal year , under the SB 860 framework we would experience a 5% reduction in base funding as is discussed in assumptions 7 and 12 above. This base FTES reduction of 1,631 FTES equates to a base funding reduction of approximately $7.8 million. This reduction is completely mitigated by the increase in the Enhanced Non-Credit FTES (CDCP) funding rate to match that of credit, as discussed in assumption 10. While this is great news it must be understood that this is a one year delay of significant budget reductions that will have to be made if enrollment is not restored. Cannot underscore the importance of recognizing that the 1,631 FTES reduction would be a permanent base funding. As we continue to march down the budget development path, outlined in the calendar approved by the Board in January, more information and details will be provided. Facilities and Planning The newly formed Capital Projects and Planning Committee held its first meeting on March 4 th. The agenda covered committee bylaws and scope, Civic Center, 33 Gough Street, and the upcoming facilities master plan. Their second meeting was held on March 18 th focusing on existing facilities conditions, facilities needs, and the facilities master plan. 5

6 In an effort to improve the financial data and information available to college constituencies as well as the general public, a new budget website has been constructed. This website contains these monthly Board Report Updates as well as Monthly Status Reports by Division or Area. The website and information can be viewed using the following link: Updates are posted on a monthly basis. 6

BOARD OF TRUSTEES MEETING August 22, 2016

BOARD OF TRUSTEES MEETING August 22, 2016 Board Budget Development Guidelines Guiding Principles: The following guiding principles are provided to the District Resources Allocation Council (DRAC) and the