BUDGET ALLOCATION MODEL. August 2017 Office of Budget and Management Analysis

Transcription

1 BUDGET ALLOCATION MODEL August 2017 Office of Budget and Management Analysis

2 General Fund FY

3 3 SB361 CCC Funding Formula Effective October 1, 2006; State funding formula includes : Basic Allocation Amount * Determined by Single or Multi College District and FTES per College Large College (Over 20,000 FTES) = $4,866,469 Medium College (Over 10,000 but Less than 20,001 FTES) = $4,258,160 Small College (10,000 or less FTES) = $3,649,851 Per FTES Amount * Credit = $5,072 Non Credit = $3,050 Career Development College Prep (Non Credit Enhanced) = $5,072 * Above rates are increased when the State budget provides a COLA or base augmentation. Rates shown are updated for

4 State Chancellors Office Exhibit C 4

5 Attendance Reporting & Funding 5

6 Revenue Source of State Allocation EPA $87,780,861 15% Student Enrollment Fees $27,534,643 5% State General Apportionment $250,115,234 44% Property Tax $205,147,495 36% source: State Chancellors Office Exhibit E Recalc

7 7 History of Allocation Model February 7, Allocation model based on SB361 Developed by the Budget Allocation Task force of 15 members and included the representatives from small and large colleges, Academic Senate, Faculty Guild, Union/Associations, College Presidents, Vice Presidents of Administration, and District Administration June 13, Amendment to Allocation Review by the Fiscal Policy and Review Committee Increases College Basic Allocation to include minimum staffing and M&O costs September 2015 Moved Security Costs from Colleges to Centralized Accounts

8 LACCD Allocation Model Funding Principles All revenue is recognized as being earned and retained by colleges Simple, fair, and predictable Provide incentives for colleges to improve student access and excellence. Budget Allocation Model should lead colleges to maximize revenues through enrollment and management Adequate and sufficient to sustain operations. Budget Allocation Model must address the economy-of-scale issues for small and large colleges. Colleges are assessed for district-wide and district office functions and services Funding limit should be set for district office operations Balances are retained by colleges and district office locations 8

9 GF Unrestricted College Budget Allocation 9 Follows General Framework of State Funding Mechanism Minimum Base Remaining State General Funds distributed by FTES College keeps all dedicated revenue (non-resident, fines, rent, etc) Board Approved Funding Adjustments Prior Year Ending Balance Less Assessments (ESC, IT, Centralized, Reserves) State Revenue Allocation Dedicated Revenue Board Approved Funding Adjustments Prior Year Ending Balance Assessments/ Debt Repayments College Allocation

10 10 General Fund Unrestricted Revenue Revenue included in the Allocation Model State Apportionment (SB361) Part Time Faculty Compensation Part Time Faculty Office Hours Part Time Faculty Health Insurance Reimbursement Lottery (Unrestricted) Ongoing State Mandate Block Grant Revenue kept by Colleges (but included in total allocation) Non Resident Tuition Apprenticeship Dedicated Revenue (Revenue directly generated by College) facility rentals, fines, transcript fees, etc.

11 11 General Fund Unrestricted Revenue source: Final Budget page 8a of Appendix F

12 12 Minimum Base Funding To recognize there are fixed expenses/core services associated with a College regardless of size Administrative Staffing (1) President; (3) Vice Presidents; (1) Institutional Research Dean; (1) Facilities Manager; Deans (4, 8, or 12 depending on size) Maintenance & Operation Costs Average cost ($9.16)* per gross square footage Minimum base funding is NOT a staffing plan * average M&O cost is from prior year.

13 13 Minimum Base Funding source: Final Budget

14 14 Board Approved Funding Adjustments One time Additional funding authorized by the Board Examples over the years include: Faculty Overbase FON subsidy Transitional Funding as a result of allocation model changes Utility or M&O increases

15 Board Approved Funding Adjustments Budget For Assessmts Faculty Centrl at BUD ALLOC FON PERS/STRS Redistrib Bal Budget For BUDGET Debt Balances ALLOCATION Overbase Colleges w /o BAL Subsidy(1) Contingency Centralized Open Orders Repay 15 BUDGET ALLOCATION City (16,305,834) 0 63,346, , , ,997,661 (1,919,930) 62,077,731 East (30,391,054) 36, ,899,247 10,372, , , , ,227, ,227,757 Harbor (8,607,993) 0 36,358, , , ,793,557 (1,103,807) 35,689,750 Mission (7,990,989) 83,854 33,608, ,140 75, , ,449 34,677, ,677,201 Pierce (18,828,437) 0 70,644,686 9,581, , , ,395,477 82,327, ,327,357 Southw est (6,804,699) 0 30,958, , , ,315,821 (939,475) 30,376,346 Trade-Tech (16,086,681) 778, ,696,147 2,049,125 75, , ,679 65,780, ,780,029 Valley (16,242,686) 142,571 60,752,659 2,086, , , ,938 63,667,234 (642,436) 63,024,798 West (9,570,132) 16, ,624,042 3,209, , , ,945 43,488, ,488,669 ITV (406,996) 0 1,166, , ,176, ,176,149 COLLEGE TOTAL (131,235,501) 831, , ,055,745 27,928,881 1,000,000 4,481, ,985, ,451,435 (4,605,648) 536,845,787 Educational Services Ctr 26,915,473 26,915, , , ,629 27,991,077 27,991,077 Information Technology 11,276,187 11,276, , ,594 11,566,009 11,566,009 Centralized Svs 74,580,372 (226,425) 74,353,947 36, ,449,787 75,840,570 75,840,570 Contingency Reserve 5,859,406 (831,423) 5,027,983 12,635,749 17,663,732 4,605,648 22,269,380 General Reserve (121,297) (121,297) 41,478, ,357,419 41,357,419 STRS/PERS Reserve 0 17,195,000 17,195,000 17,195,000 Prop 30 Reserve 0 8,500,000 8,500,000 8,500,000 Restricted Program Deficit 0 493, , ,258 SIS Completion Funds 0 7,813, ,200 8,377,381 8,377,381 Other District-w ide 0 5,786, ,311 6,052,511 6,052,511 Van de Kamp Innovation 1,034, ,175 1,075 1,329,804 1,329,804 Funds for Def Maint 12,725,360 12,725, ,725,360 12,725,360 Undistrib (Projtd Bal) , , ,682 (13,132,356) TOTAL ,267, ,724,360 1,000,000 22,000, ,721, ,714, ,714,238

16 16 Prior Year End Balances Colleges shall keep their year-end balances up to five percent (5.0%) of their prior fiscal year s Unrestricted General Fund budget (excluding prior year balances) Colleges are allowed to carry over their accumulated balances from fiscal year and subsequent fiscal years up to ten percent (10%) of their prior year Unrestricted General Fund budget. Colleges will be allowed to use up to $5 million or twenty-five percent (25%) of their accumulated ending balances

17 Board Approved Funding Adjustments Budget For Assessmts Faculty Centrl at BUD ALLOC FON PERS/STRS Redistrib Bal Budget For BUDGET Debt Balances ALLOCATION Overbase Colleges w /o BAL Subsidy(1) Contingency Centralized Open Orders Repay 17 BUDGET ALLOCATION City (16,305,834) 0 63,346, , , ,997,661 (1,919,930) 62,077,731 East (30,391,054) 36, ,899,247 10,372, , , , ,227, ,227,757 Harbor (8,607,993) 0 36,358, , , ,793,557 (1,103,807) 35,689,750 Mission (7,990,989) 83,854 33,608, ,140 75, , ,449 34,677, ,677,201 Pierce (18,828,437) 0 70,644,686 9,581, , , ,395,477 82,327, ,327,357 Southw est (6,804,699) 0 30,958, , , ,315,821 (939,475) 30,376,346 Trade-Tech (16,086,681) 778, ,696,147 2,049,125 75, , ,679 65,780, ,780,029 Valley (16,242,686) 142,571 60,752,659 2,086, , , ,938 63,667,234 (642,436) 63,024,798 West (9,570,132) 16, ,624,042 3,209, , , ,945 43,488, ,488,669 ITV (406,996) 0 1,166, , ,176, ,176,149 COLLEGE TOTAL (131,235,501) 831, , ,055,745 27,928,881 1,000,000 4,481, ,985, ,451,435 (4,605,648) 536,845,787 Educational Services Ctr 26,915,473 26,915, , , ,629 27,991,077 27,991,077 Information Technology 11,276,187 11,276, , ,594 11,566,009 11,566,009 Centralized Svs 74,580,372 (226,425) 74,353,947 36, ,449,787 75,840,570 75,840,570 Contingency Reserve 5,859,406 (831,423) 5,027,983 12,635,749 17,663,732 4,605,648 22,269,380 General Reserve (121,297) (121,297) 41,478, ,357,419 41,357,419 STRS/PERS Reserve 0 17,195,000 17,195,000 17,195,000 Prop 30 Reserve 0 8,500,000 8,500,000 8,500,000 Restricted Program Deficit 0 493, , ,258 SIS Completion Funds 0 7,813, ,200 8,377,381 8,377,381 Other District-w ide 0 5,786, ,311 6,052,511 6,052,511 Van de Kamp Innovation 1,034, ,175 1,075 1,329,804 1,329,804 Funds for Def Maint 12,725,360 12,725, ,725,360 12,725,360 Undistrib (Projtd Bal) , , ,682 (13,132,356) TOTAL ,267, ,724,360 1,000,000 22,000, ,721, ,714, ,714,238

18 18 Assessments to College Allocation Each college shall be assessed for: Educational Services Center (includes Info Technology) Centralized Accounts Deferred Maintenance (2.0% of revenue) Contingency Reserve (amount to bring up to 3.5% of revenue) General Reserve (amount to bring up to 6.5% of revenue)

19 Board Approved Funding Adjustments Budget For Assessmts Faculty Centrl at BUD ALLOC FON PERS/STRS Redistrib Bal Budget For BUDGET Debt Balances ALLOCATION Overbase Colleges w /o BAL Subsidy(1) Contingency Centralized Open Orders Repay 19 BUDGET ALLOCATION City (16,305,834) 0 63,346, , , ,997,661 (1,919,930) 62,077,731 East (30,391,054) 36, ,899,247 10,372, , , , ,227, ,227,757 Harbor (8,607,993) 0 36,358, , , ,793,557 (1,103,807) 35,689,750 Mission (7,990,989) 83,854 33,608, ,140 75, , ,449 34,677, ,677,201 Pierce (18,828,437) 0 70,644,686 9,581, , , ,395,477 82,327, ,327,357 Southw est (6,804,699) 0 30,958, , , ,315,821 (939,475) 30,376,346 Trade-Tech (16,086,681) 778, ,696,147 2,049,125 75, , ,679 65,780, ,780,029 Valley (16,242,686) 142,571 60,752,659 2,086, , , ,938 63,667,234 (642,436) 63,024,798 West (9,570,132) 16, ,624,042 3,209, , , ,945 43,488, ,488,669 ITV (406,996) 0 1,166, , ,176, ,176,149 COLLEGE TOTAL (131,235,501) 831, , ,055,745 27,928,881 1,000,000 4,481, ,985, ,451,435 (4,605,648) 536,845,787 Educational Services Ctr 26,915,473 26,915, , , ,629 27,991,077 27,991,077 Information Technology 11,276,187 11,276, , ,594 11,566,009 11,566,009 Centralized Svs 74,580,372 (226,425) 74,353,947 36, ,449,787 75,840,570 75,840,570 Contingency Reserve 5,859,406 (831,423) 5,027,983 12,635,749 17,663,732 4,605,648 22,269,380 General Reserve (121,297) (121,297) 41,478, ,357,419 41,357,419 STRS/PERS Reserve 0 17,195,000 17,195,000 17,195,000 Prop 30 Reserve 0 8,500,000 8,500,000 8,500,000 Restricted Program Deficit 0 493, , ,258 SIS Completion Funds 0 7,813, ,200 8,377,381 8,377,381 Other District-w ide 0 5,786, ,311 6,052,511 6,052,511 Van de Kamp Innovation 1,034, ,175 1,075 1,329,804 1,329,804 Funds for Def Maint 12,725,360 12,725, ,725,360 12,725,360 Undistrib (Projtd Bal) , , ,682 (13,132,356) TOTAL ,267, ,724,360 1,000,000 22,000, ,721, ,714, ,714,238

20 Assessments to College Allocation Educational Services Center 4.2% Information Technology 1.8% Centralized Services 11.7% Deferred Maintenance 2.0% Contingency Reserve Amount to bring total to 3.5% General Reserve Amount to bring total to 6.5%

21 General Fund Unrestricted 21

22 22 College FTES Decline College receives stability funding in the initial fiscal year of decline. College is entitled to a proportional restoration if able within the following 3 years. Example: College X declines 100 credit FTES below base reported on annual 320 enrollment report for fiscal year June 30, Stability Revenue of $500,500 (100 FTES x $5,005 per credit FTES) will be given to college. July 1, In fiscal year, College X revenue will decline by $500,500

23 23 College Debt Repayment Policy College deficits are cumulative loans to be paid back beginning one year after incurring the deficit. Limit annual college debt repayment obligation to 3% of the college s Final Budget allocation. One-year suspension of the college debt repayment will be given to interim or new college presidents to allow them time to plan and address the college fiscal issues.

24 24 Schedule of College Debt Repayment TOTAL AMOUNT REMAINING Rem. Deficit Deficit Deficit Deficit Deficit Deficit Deficit Deficit DEBT REPAID DEBT DEFICIT* City 0 (2,316,097) (2,440,375) (4,756,472) 926,440 (3,830,032) City (1,327,489) East East Harbor (2,030,710) (2,441,782) (1,708,181) (855,643) (7,036,316) 1,958,637 (5,077,679) Harbor (2,766,812) Mission Mission Pierce Pierce Southwest overcap* (1,364,784) (1,466,650) (1,757,597) (1,269,281) (547,551) (163,380) (2,191,687) (8,760,930) 1,552,868 (7,208,062) Southwest (3,458,762) Trade-Tech overcap* Trade-Tech Valley (689,051) (460,779) (531,310) (312,085) (796,968) (1,641,710) (707,588) 0 (5,139,491) 642,436 (4,497,055) Valley West 0 (596,118) (596,118) 596,118 0 West ITV ITV (350,248) TOTAL (2,719,761) (7,179,560) (3,706,141) (2,069,682) (2,066,249) (2,189,261) (870,968) (5,487,705) (26,289,327) 5,676,499 (20,612,828) TOTAL (7,903,311) *Harbor College's request to defer $923,010 payment in fy (July 15, 2015) was not approved. Valley's request for deferral of $558,037 was also granted (April 2015). *To be applied after a oneyear grace period ( ) CALCULATION OF COLLEGE DEBT REPAYMENT BASED ON NEW DEBT REPAYMENT POLICY FINAL BUDGET -3% Limit of Budget Allocation REMAINING DEBT Debt To Repay in Debt To Repay in Debt To Repay in Debt To Repay in Debt To Repay in Debt To Repay in Debt To Repay in Debt To Repay in Debt To Repay in Debt To Repay in City 63,997,661 (1,919,930) (3,830,032) (1,919,930) (1,910,102) East 118,227,757 (3,546,833) Harbor 36,793,557 (1,103,807) (5,077,679) (1,103,807) (1,103,807) (1,103,807) (1,103,807) (662,451) Mission 34,677,201 (1,040,316) Pierce 82,327,357 (2,469,821) Southwest 31,315,821 (939,475) (7,208,062) (939,475) (939,475) (939,475) (939,475) (939,475) (939,475) (939,475) (631,737) 0 0 Trade-Tech 65,780,029 (1,973,401) Valley (1) 63,667,234 (1,910,017) (4,497,055) (642,436) (642,436) (642,436) (642,436) (642,436) (642,436) (642,434) (5) 0 0 West 43,488,669 (1,304,660) ITV 1,176,149 (35,284) TOTAL 541,451,435 (16,243,544) (20,612,828) (4,605,648) (4,595,820) (2,685,718) (2,685,718) (2,244,362) (1,581,911) (1,581,909) (631,742) 0 0 Note: Budget Allocation excludes debt repayments but includes transitional funding for comparison purposes. *Unfunded Overcap applied to debt repayment. (1) Valley's calculation of annual debt repayment has been restructured to reflect 8-yr repayment of total debt through , pending approval.

25 25 Debt Waiver Colleges that have outstanding debt repayments that exceed 3% of their Final Budget allocation may receive relief from debt repayments under the following conditions: College must balance its budget for at least three consecutive years while meeting its FTES obligation; College has submitted a reasonable, multi-year plan for maintaining a balanced budget and meeting its enrollment target for the duration of its repayment period; College has paid its annual debt according to its repayment plan; College has paid off 50% or more of its total debt; thereafter, college may petition to the District Budget Committee to review and make a recommendation to the Chancellor to waive the remaining debt.

26 26 District Financial Accountability Measures If the college ends the year in a deficit greater than 1% of its budget or $500,000, whichever is greater, it is required to: Perform self-assessment and review. Submit to the Executive Committee of the District Budget Committee a financial plan that addresses the college s financial health concerns consistent with the measurement criteria in the accountability measures. Participate in a quarterly review as requested by the Executive Committee of the District Budget Committee on the college s fiscal condition. If a college has experienced three consecutive years of deficits, the college shall be required to submit a detailed recovery plan for achieving fiscal stability.

27 27 Information Sources LACCD Budget Reports LACCD Audit Reports District Budget Committee Documents CA State Chancellor s Office Apportionment Reports portionmentreports.aspx

28 ATTACHMENT I CALIFORNIA COMMUNITY COLLEGES SECOND PRINCIPAL APPORTIONMENT LOS ANGELES COMMUNITY COLLEGE DISTRICT EXHIBIT C Workload measures: Base Funding Marginal Funding Base FTES Growth FTES Restored FTES Stability FTES Total Funded FTES Unfunded FTES Actual FTES Credit FTES Noncredit FTES Noncredit - CDCP FTES Total FTES: 4, , , , , , , , , , , , , , , , , , , , I Base Revenues +/- Restore or Decline A Basic Allocation B Basic FTES Revenue Before Workload Reduction D Revised Base FTES Revenue $483,546,741 C Workload Reduction $0.00 $34,023,701 $483,546,741 V Other Revenue Adjustments A Misc. Revenue Adjustments B. Full-Time Faculty Hiring C. Base Increase Total Revenue Adjustments $0 $5,859,992 $25,702,349 $31,562,341 1 Credit Base Revenue 2 Noncredit Base Revenue 3 Career Development College NonCr E Current Year Decline Total Base Revenue Less Decline $462,652,641 $6,044,227 $14,849,873 $0 $517,570,442 VI Stability Adjustment VII Total Computational Revenue (sum of II, III, IV, V, & VI) $0 $569,505,595 II Inflation Adjustment A Statewide Inflation Adjustment B Inflation Adjustment C Current Year Base Revenue + Inflation Adjustment III Basic Allocation & Restoration A Basic Allocation Adjustment B Basic Allocation Adjustment COLA C Stability Restoration D Restoration of Workload Reduction 1.02% $5,279,219 $522,849,661 $0 $0 $0 $0 VIII District Revenue Source A1 Property Taxes $193,372,899 A2 Less Property Taxes Excess $0 B Student Enrollment Fees $29,370,180 C State General Apportionment $258,771,783 D Estimated EPA $87,990,733 Available Revenue $569,505,595 E Revenue Shortfall $0 Total Revenue Plus Shortfall $569,505,595 Total Basic Allocation & Restoration IV Growth A Unconstrained Growth Rate 5.81% B Constrained Growth Rate 5.57% C Constrained Growth Cap $26,493,904 $0 IX Other Allowances and Total Apportionments A State General Apportionment B Statewide Average Replacement Cost Number of Faculty Not Hired Full-time Faculty Adjustment Net State General Apportionment $258,771,783 $73, $0 $258,771,783 D Actual Growth E Funded Credit Growth Revenue $15,093,593 $11,324,733 X Unrestored Decline as of July 1st of Current Year F Funded Noncredit Growth Revenue G Funded Noncredit CDCP Growth Revenue Total Growth Revenue $-455,264 $4,224,124 $15,093,593 A 1st Year B 2nd Year C 3rd Year Total $0 $0 $0 $0 Single College District Funding Rates: Total FTES > FTES: Mult-College District Funding Rate: Total FTES 19,880 > 9,940 <= 9,940 Rural > 19,880 > 9,940 <= 9,940 $5,670,617 0 Revenue: Basic Allocation Calculation Before Current Year COLA College/Center Base Funding Rates (Current Year FTES Thresholds): $4,536,493 $3,402,370 $567,062 $4,536,493 $3,969,432 $3,402,370 $0 $0 $0 $0 $4,536,493 $15,877,728 $13,609,480 Total Colleges Total Colleges Rev. $34,023,701 State Approved Center: Funding Rates Total State Approved Centers Total State Approved Centers Revenue 0 $1,134,123 0 $0 Grandfathered or Previously Approved Center: Funding FTES Levels > 994 > 746 > 497 > 249 <= 100 $1,134,123 $850,592 $567,062 $283,531 $141,765 Number of Grandfathered or Previously Approved Total FTES Total Grandfathered or Previously Approved Centers Total Basic Allocation Revenue $34,023,701 Grandfathered or Previously Approved Center Revenue: $0 $0 $0 $0 $0 Total Grandfathered or Approved Center $0 Report produced on 6/8/2016 at 11:55:09AM

29 Source: State Chancellor's Office ATTACHMENT II Exhibit C Overview Exhibit C displays components of a district s Total Computational Revenue (TCR) pursuant to California Code of Regulations, title 5, sections TCR is the total sum of revenue that a district may receive from both state and local revenue sources and consists of five primary components: Title 5 Requirement Primary Components of TCR Exhibit C Section (b, c, & d) + Full-Time Equivalent Student (FTES) Base Revenue I (e & i) + Basic Allocation Base Revenues I Inflation Adjustments (COLA) II Workload Adjustments IV Budget Stability Adjustment VI. = Total Computational Revenue VII The primary district revenue sources include state general apportionment, local property taxes, and student enrollment fees. At the time of the advance principal apportionment (AD), figures for property tax, enrollment fees, and FTES are estimates. As the fiscal year progresses and actual data becomes available, the TCR and other Exhibit C information increases in accuracy. The top and bottom portions of Exhibit C provide supporting data for the TCR calculation in the middle portion. An overview of each portion of Exhibit C continues on the following pages and uses the following acronyms: Acronym Key AD Advance Principal Apportionment CDCP Career Development and College Preparation COLA Cost of Living Adjust ment CY Current Fiscal Year EPA Education Protection Account FTES Full-Time Equivalent Student FTFH Full-t ime Facult y Hiring P1 First Principal Apport ionment P2 Second Principal Apportionment PY Prior Fiscal Year R1 PY Apport ionment Recalculat ion TCR Tot al Comput at ional Revenue Page 1 6

30 Top Portion Workload Measures and FTES Summary Workload Measures are the base and marginal funding rates by type of FTES. Column Base Funding Marginal Funding Workload Measures Definition Rate of funding per FTES prior to Inflation or Cost of Living Adjustment (COLA). (Current Year (CY) funding)/ (Base FTES) Base FTES is Prior Year (PY) FTES as of second principal apportionment (P2). Rate of funding per FTES including COLA [(Base Funding Rate) x (CY COLA)] The FTES Summary displays the components of FTES. (Base FTES + Growt h FTES + Rest ored FTES + St ability FTES)= Total Funded FTES (Total Funded FTES + Unfunded FTES) = Actual FTES FTES Summary Col umn Definition Base FTES Funded FTES as of PY P2. Growth FTES CY target growth at AD. For P1, P2, and R1, this will be the actual growth in FTES. Restored FTES FTES restored in CY for a decline in FTES that occurred in one of the three PYs. Stability FTES FTES decline in CY that is eligible for CY stability funding. At AD, Actual FTES is an estimate that assumes the district will achieve total restoration and growth targets. For P1, P2, and R1, Actual FTES is equal to the amount reported on the CCFS-320 Student Attendance Accounting Report plus Stability FTES, if applicable. Page 2 6

31 Bottom Portion Basic Allocation The bottom portion of Exhibit C shows the calculation of the district s basic allocation prior to any COLA. This is the amount shown in the middle portion as I.A Basic Allocation. Total Basic Allocation Revenue = (Total Colleges Revenue + Total Approved Center Revenue + Total Grandfathered or Previously Approved Centers Revenue) Middle Portion Total Computational Revenue The middle section displays the primary components of and adjustments to TCR. Page 3 6

32 Section Exhibit C - Total Computational Revenue Components Definitions I. Base Revenue A. Basic Allocation Basic Allocation based on district size (from bottom section). B. Revised Base FTES Revenue For each type of FTES: = (Base Funding rate (from top section)) x (Base FTES (from top section)) C. Current Year Decline Reduction in funding due to CY decline in FTES. Tot al Base Revenue Less Decline =(I.A) + (I.B) (I.C) II. Inflation Adjustment A. Statewide Inflation Adjustment CY COLA displayed as percent. III. Basic Allocation & Restorat ion B. Inflation Adjustment CY COLA dollar amount: = (I. Total Base Revenue Less Decline) x (II.A) Current Year Base Revenue + Inflation Adjustment = (I. Total Base Revenue Less Decline) + (II.B A. Basic Allocation Adjustment Adjustment for changes in size or status of colleges and centers, not including COLA B. Basic Allocation Adjustment COLA CY COLA for III.A. = (III. A) x (II.A) C. Stability Restoration Amount of FTES funding that the district restored based on Actual FTES. Total Basic Allocation & Restoration = (III.A) + (III.B) + (III.C) IV. Growth A. Target Growth Rate The district s available growth revenue. V. Other Revenue Adjustments At AD, this is the total maximum revenue available to the district as calculated by a weighted growth model that includes local demographic and student need factors. B. Funded Growth Rate At P1, P2, and R1, not all districts will achieve the growth targets determined at Advance. This line is the actual growth funded. = (IV. C) + (IV. D) + (IV. E) C. Funded Credit Growth Revenue The portion of the funded growth rate attributable to Credit FTES. D. Funded Noncredit Growth Revenue The portion of the funded growth rate attributable to Non-credit FTES. E. Funded Noncredit CDCP Growth Rev. The portion of the funded growth rate attributable to CDCP FTES. Total Growth Revenue The growth revenue that the district will receive. = IV.B A. Misc. Revenue Adjust ment s Miscellaneous adjust ment s as needed. B. Full-Time Faculty Hiring Adjustment Change in FTFH funding caused by differences in reported FTES between CY and PY. Page 4 6

33 Section Exhibit C - Total Computational Revenue Components Definitions C. Base Increase (FTFH) Portion of total base increase attributed to FTFH funding. At AD, this amount is an estimate based on the district s PY allocation of FTFH funds as a percentage of CY base revenue. The amount is revised at P1, P2, and R1 to reflect updated data. D. Base Increase (Non-FTFH) Non-FTFH base increase is the CY Budget Act base increase less FTFH portion calculated above. VI. Stability Adjustment VII. Total Computational Revenue Total Revenue Adjustments Statewide: (C. Base Increase (FTFH) + D. Base Increase (Non-FTFH)) = CY Budget Act base increase. = (V.A) + (V.B) + (V.C) + (V.D) The amount that a district is entitled to receive in the initial year of FTES decline including t he CY COLA. Revenue that a district is eligible to receive. The sum of sections II. - VI. VIII. District Revenue Source A.1. Property Taxes The estimated property tax available to districts provided by the California Department of Finance (DOF) and updated at each certification. At R1, actual property tax figures are used. A.2. Less Property Taxes Excess For districts that are entirely locally-funded, this is the amount of property tax above TCR. B. Student Enrollment Fees The estimated student enrollment fees are provided by the California Department of Finance (DOF) at AD. At P1 and P2, the student enrollment fee estimates are reported by districts to the Chancellor s Office. At R1, actual student fees are reported by the districts. C1. State General Apportionment = Total state general apportionment FTFH portion shown in C.2 below. C2. Full-Time Faculty Hiring The FTFH portion of total general apportionment. This amount is the initial funding provided in the Budget Act, increased annually by any base increase and COLA. D. Estimated EPA The estimated Education Protection Account funds available to districts as provided by the California Department of Finance (DOF). Estimates are updated at P1 and P2. Actual figures are used at R1. Available Revenue = A.1. A.2. + B. + C.1 + C.2 + D Page 5 6

34 Section Exhibit C - Total Computational Revenue Components Definitions E. Revenue Shortfall Displays the percentage of TCR funded based on estimated available revenue and the dollar amount of revenue shortfall. IX. Other Allowances and Tot al Apportionment = (VII. TCR) Available Revenue Total Revenue Plus Shortfall = Available Revenue + (VIII.E). This total is equal to the TCR calculated in section VII. A. State General Apportionment Certified amount of State General Apportionment. This total is also the total on Exhibit A = (VIII.C1) + (VIII.C.2) B. Statewide Average Replacement Cost This line item is not used at this time. Number of Faculty Not Hired This line item is not used at this time. Full-Time Faculty Adjustment This line item is not used at this time. Net State General Apportionment = (IX.A) + (IX.B) X. Unrestored Decline Shows the dollar amount of unrestored decline before COLA that district is eligible to restore in the CY. A. 1 st Year Unrestored decline from PY. B. 2 nd Year Unrestored decline from prior prior year. C. 3 rd Year Unrestored decline from prior prior prior year. Page 6 6

35 ATTACHMENT III Budget Allocation Final Budget August 10, 2016 Page 1 of 18 APPENDIX F LOS ANGELES COMMUNITY COLLEGE DISTRICT FINAL BUDGET ALLOCATION MECHANISM I. PARAMETERS USED TO DETERMINE COLLEGE MINIMUM BASE ALLOCATION On June 13, 2012, the Board of Trustees approved Phase I of the review and changes to the District Allocation Model. Phase I implements an increase to the College Basic Allocation by including minimum staffing and maintenance and operations (M&O) costs, as follows: 1. Each college shall receive an annual base allocation to fully fund the following: a. Minimum Administrative Staffing: i. (1) President; ii. (3) Vice Presidents; iii. (1) Institutional Research Dean; iv. (1) Facilities Manager; v. Deans a) (4) Deans => small colleges (FTES<10,000); b) (8) Deans => medium colleges (FTES>=10,000 and <20,000); c) (12) Deans => large colleges (FTES>=20,000). b. Maintenance and Operations costs based on average cost per gross square footage. 2. After allocating the minimum base allocation in item #1 above, all remaining revenue (except non-resident tuition, dedicated revenue, and apprenticeship revenue) shall be distributed to colleges based on their proportion of the District s funded FTES. 3. There will be an annual assessment of the allocation model. II. PARAMETERS USED TO DETERMINE STATE GENERAL REVENUE 1. Base Revenue a. Base revenue shall be calculated using the SB 361 marginal funding rates. For fiscal year , each college shall receive an annual basic allocation based on the following basic allocation base rate: FTES >= 20,000 $4,801,725 large college 10,000 <= FTES < 20,000 $4,201,509 medium college FTES < 10,000 $3,601,294 small college

36 Budget Allocation Final Budget August 10, 2016 Page 2 of 18 b. Credit Base Revenue shall be equal to the funded base credit FTES multiplied by the base rate of $5, in the fiscal year; in subsequent years the base rate shall be the prior year rate plus inflation. c. Non-credit Base Revenue shall be equal to the funded base non-credit FTES multiplied by the base rate of $3, in the fiscal year; in subsequent years the base rate shall be the prior year rate plus inflation. d. The career development and college preparation (CDCP) non-credit base revenue shall be equal to the funded base CDCP non-credit FTES multiplied by the base rate of $5, in the fiscal year; in subsequent years the base rate shall be the prior year rate plus inflation. e. The base revenues for each college shall be the sum of the annual basic allocation, credit base revenue, non-credit base revenue, and CDCP non-credit base revenue. 2. COLA (cost of living adjustment) will be distributed as specified in the State Apportionment notice. 3. Funded Growth Revenue for each college shall be calculated using the following method: a. Determine the funded growth rate for each of the workload measures (Credit FTES, Noncredit FTES, and Career Development and College Preparation Noncredit FTES); b. Identify and fund the lowest percentage growth equally among the colleges not to exceed a college s actual growth percentage; c. Identify and fund the next lowest percentage growth equally among the colleges not to exceed a college s actual growth percentage; d. Repeat step c until the total funded growth revenue is distributed. 4. Proposition 30, Education Protection Act (EPA) Fund, is part of the State General Revenue but will be distributed based on Funded Base FTES and will be tracked in a separate fund. 5. Colleges experiencing an enrollment/ftes decline (to be determined when the First Principal Apportionment Recalculation becomes available) shall receive stability funding in the initial year of decrease in FTES in an amount equal to the revenue loss associated with the FTES reduction in that year. A college shall be entitled to a proportional restoration of any reduction in state base general revenue during the three years following the initial year of decline if there is a subsequent increase in FTES. 1 Effective , the State increased the Enhanced Non-Credit rate to equal the Credit rate.

37 Budget Allocation Final Budget August 10, 2016 Page 3 of 18 III. PARAMETERS USED TO DISTRIBUTE OTHER REVENUE 1. Non-Resident Tuition Revenue shall be distributed to colleges based on college projections of tuition earnings. 2. Local Revenue and Other Federal and State Revenue (Dedicated Revenue) Revenue that is directly generated by colleges shall be distributed to colleges based on college projections and adjusted for actual. 3. Lottery Revenue Revenue shall be distributed to colleges based on the proportion of a college s prior year FTES over the total District FTES and adjusted for actual. 4. Interest and Other Federal, State, and Local Income Not Directly Generated By Colleges Interest and other federal, state, and local income that is not directly generated by colleges shall be utilized to fund the District s reserves. IV. PARAMETERS FOR ALLOCATIONS 1. A college total budget shall be the sum of the adjusted base revenues; net of assessments for Centralized Accounts, Educational Services Center function, Contingency Reserve; a portion of the General Reserve, and a portion of the Deferred Maintenance funding, plus other revenue; minus college deficit payments; and plus balances. 2. In accordance with the Board Resolution passed on May 23, 2012 (BT2), an amount of two percent (2.0%) of the Unrestricted General Fund revenue will be set aside in to be used only to address postponed and future deferred maintenance requirements. This amount has been increased each year until it has reached the industry standard of two percent (2.0%). 3. The District shall maintain a District General Reserve of six and a half percent (6.5%) and a Contingency Reserve of three and a half percent (3.5%) of total unrestricted general fund revenue at the centralized account level; and one percent (1.0%) of college revenue base allocation at the college level. Such reserves shall be established to ensure the District s financial stability, to meet emergency situations or budget adjustments due to any revenue projection shortfalls during the fiscal year. Use of the reserve must be approved by the Board prior to any expenditure. 4. Each college shall be assessed for Centralized Accounts and Educational Services Center functions based on the differentiated credit, noncredit, and enhanced non-credit (College Development and College Preparation) rates per FTES (including resident and nonresident

38 Budget Allocation Final Budget August 10, 2016 Page 4 of 18 FTES). 5. Additional funding received by the District after Final Budget, not directly attributable to an individual college, shall be distributed through the new allocation model as delineated in the Revenue Parameters above. 6. In the event that actual revenues are less than the amounts projected and allocated to colleges for the fiscal year, the college budgets will be recalculated and adjusted accordingly. 7. If a college experiences enrollment decline below its funded base FTES, its budget shall be reduced by its amount of advanced growth funds. In addition, its state general revenue base will be adjusted according to the state allocation model as indicated in Revenue Parameter #5. 8. Colleges shall keep their year-end balances up to five percent (5.0%) of their prior fiscal year s Unrestricted General Fund budget, excluding prior year balances. This procedure will only affect the carryforward balances of fiscal year and future years; the accumulated balances as of fiscal year or prior shall remain with the colleges. Colleges are allowed to carry over their accumulated balances from fiscal year and subsequent fiscal years up to ten percent (10%) of their prior year Unrestricted General Fund budget. Colleges will be allowed to use up to $5 million or twenty-five percent (25%) of their ending balances, whichever is less and within the limits of the above parameters. Additional access is allowed with the Chancellor s approval. 9. The Educational Services Center shall retain its prior year ending balance including open orders. Open orders for ITV, Educational Services Center and Centralized Accounts shall be funded up to the available balances from these locations. Any uncommitted balances in ITV and Centralized Accounts shall be redistributed to colleges. 10. The college president is the authority for college matters within the parameters of law and Board operating policy. The college president shall be responsible for the successful operation and performance of the college. (See Comm. No. BF2, October 9, 2013, District Financial Accountability Measures) 11. Prior to Budget Preparation, the Presidents will make a recommendation on Centralized Accounts and Educational Services Center allocations to the District Budget Committee. 12. Prior to Budget Preparation, the Presidents will meet to forecast FTES and set goals to maximize revenues to be generated by the colleges. 13. Each operating location shall prepare a quarterly report to include annual projected expenditures and identify steps necessary to maintain a balanced budget. 14. The budget allocation will be recalculated using this mechanism at Final Budget, First Principal Apportionment (February), and at year-end.

39 Budget Allocation Final Budget August 10, 2016 Page 5 of 18 V. PARAMETERS FOR COLLEGE DEBT REPAYMENT (Comm. No. BF4, December 11, 2013, College Debt Repayment Policy) College deficits are cumulative loans to be paid back beginning one year after incurring the deficit. 1. Limit annual college debt repayment obligation to 3% of the college s Final Budget allocation; 2. Colleges that have outstanding debt repayments that exceed 3% of their Final Budget allocation may receive relief from debt repayments under the following conditions: College must balance its budget for at least three consecutive years while meeting its FTES obligation; College has submitted a reasonable, multi-year plan for maintaining a balanced budget and meeting its enrollment target for the duration of its repayment period; College has paid its annual debt according to its repayment plan; College has paid off 50% or more of its total debt; thereafter, college may petition to the District Budget Committee to review and make a recommendation to the Chancellor to waive the remaining debt. 3. One-year suspension of the college debt repayment will be given to interim or new college presidents to allow them time to plan and address the college fiscal issues. 2 2 Only one one-year suspension of the college debt repayment is granted to the college.

40 Budget Allocation Model FINAL BUDGET August 10, 2016 Page 6 of FINAL BUDGET Funds Available for Unrestricted General Fund ADOPTED FINAL BUDGET TENTATIVE BUDGET FINAL BUDGET (COLA@1.02%, Gr@3.00%) (COLA@0.00%, Gr@2.00%) (COLA@0.00%, Gr@2.00%) DIFFERENCE Base (excluding EPA Funds) 422,865, ,314, ,439,321 6,124,805 Base Allocation Increase 25,548,513 6,800,000 7,392, ,359 EPA Funds 94,506,345 90,254,146 85,978,896 (4,275,250) COLA 5,277, Growth 14,656,981 10,681,851 10,688,104 6,253 Lottery 13,500,000 13,800,000 16,040,000 2,240,000 Non-Resident 13,500,000 14,673,413 15,636, ,032 Apprenticeship 83, , ,357 0 Part-time Faculty Compensation 2,203,448 2,203,448 2,157,504 (45,944) On-Going State Mandate Block Grant 2,919,963 2,919,963 3,013,000 93,037 One-Time State Mandate Reimbursement 57,669, Full-Time Faculty Hiring 5,756, Other State 1,664,245 1,664,245 1,643,011 (21,234) Local Interest 1,609,500 1,609,500 1,609,500 0 Dedicated Revenue 7,270,379 6,806,435 7,413, ,059 TOTAL INCOME 669,030, ,983, ,267,991 6,284,117 Transfer From Retirement Benefits Reserve Fund Balances Open Orders 8,848, ,721,887 5,721,887 General Reserve (Carryforward Balance from prior year) 34,440,765 40,948,952 41,478, ,764 Other Fund Balance 32,858,065 74,135,462 87,245,644 13,110,182 Total Fund Balance 76,147, ,084, ,446,247 19,361,833 TOTAL PROJ FUNDS AVAILABLE 745,178, ,068, ,714,238 25,645,950

41 Budget Allocation Model FINAL BUDGET August 10, 2016 Page 7 of FINAL BUDGET UNRESTRICTED GENERAL FUND ADOPTED FINAL BUDGET TENTATIVE BUDGET FINAL BUDGET DIFFERENCE City 59,399,816 62,476,703 62,077,731 (398,972) East 106,509, ,180, ,227,757 18,047,367 Harbor 33,485,267 35,289,786 35,689, ,964 Mission 31,398,889 32,840,812 34,677,201 1,836,389 Pierce 78,026,777 69,041,175 82,327,357 13,286,182 Southwest 26,192,583 29,236,851 30,376,346 1,139,495 Trade-Tech 57,120,898 60,102,307 65,780,029 5,677,722 Valley 59,897,747 60,680,539 63,024,798 2,344,259 West 36,039,010 37,580,758 43,488,669 5,907,911 ITV 1,605,971 1,513,115 1,176,149 (336,966) College Total 489,676, ,942, ,845,787 47,903,351 Educational Services Center 27,172,456 26,349,424 27,991,077 1,641,653 Information Technology 11,659,542 11,063,899 11,566, ,110 Centralized & Other 50,965,835 72,124,472 75,840,570 3,716,098 Contingency Reserve 23,416,080 22,049,436 22,269, ,944 General Reserve 41,478,716 40,948,952 41,357, ,467 STRS/PERS Reserve 0 17,195,000 17,195,000 0 Prop 30 Reserve 0 8,500,000 8,500,000 0 Restricted Program Deficit 378, , ,258 Goal 1: Access & Preparation 26,450, Goal 2: Teaching & Learning 5,500, Goal 3: Organiz Effectiveness (less Acc 23,615, Goal 4: Resources & Collaboration 1,104, LA County Sheriff's Contract 20,006, SIS Completion Funds 0 0 8,377,381 8,377,381 Other District-wide 0 0 6,052,511 6,052,511 Van de Kamp Innovation 1,235, ,225 1,329, ,579 Funds for Deferred Maint 13,380,617 12,599,677 12,725, ,683 Undistributed Balance 9,138,868 44,413, ,682 (44,243,085) TOTAL 745,178, ,068, ,714,238 25,645,950

42 Budget Allocation Model FINAL BUDGET August 10, 2016 Page 8a of FINAL BUDGET Minimum Base Rev Base Rev Remaining For Distrib EPA Funds Base COLA Growth Appren/ On-Going St Non- Dedicated TOTAL Budget For Faculty Centrl at BUD ALLOC FON PERS/STRS Redistrib Bal Budget For BUDGET Debt Allocation Lottery Balances Revenue Other St Revenue REVENUES Assessmts 0.00% Increase Mand Blk Gr Resident Overbase Colleges w/o BAL Subsidy(1) Contingency Centralized Open Orders ALLOCATION Repay BUDGET ALLOCATION City 12,007,160 48,693,377 10,508, ,299, , ,237 2,003,097 2,917, ,962 79,652,482 (16,305,834) 0 63,346, , , ,997,661 (1,919,930) 62,077,731 East 12,383,556 89,409,895 19,710, ,450,744 1,650, ,725 3,713,616 5,330, , ,254,291 (30,391,054) 36, ,899,247 10,372, , , , ,227, ,227,757 Harbor 7,618,297 27,326,083 5,600, , , ,263 1,047,709 1,001, ,446 44,966,030 (8,607,993) 0 36,358, , , ,793,557 (1,103,807) 35,689,750 Mission 7,040,707 25,984,230 5,318, , , , , , ,889 41,515,885 (7,990,989) 83,854 33,608, ,140 75, , ,449 34,677, ,677,201 Pierce 11,496,905 57,316,014 12,444, ,545,313 1,055, ,095 2,303,091 1,957, ,329 89,473,123 (18,828,437) 0 70,644,686 9,581, , , ,395,477 82,327, ,327,357 Southwest 8,063,981 22,680,441 4,557, , , , , , ,182 37,763,248 (6,804,699) 0 30,958, , , ,315,821 (939,475) 30,376,346 Trade-Tech 11,571,831 49,766,679 10,661, ,328, , , ,629 1,962, , ,898 78,004,035 (16,086,681) 778, ,696,147 2,049,125 75, , ,679 65,780, ,780,029 Valley 9,926,339 50,242,288 10,726, ,340, , ,891 1,974, , ,003 76,852,774 (16,242,686) 142,571 60,752,659 2,086, , , ,938 63,667,234 (642,436) 63,024,798 West 7,606,165 29,547,553 6,184, , , ,723 1,176,275 2,183, ,182 49,177,554 (9,570,132) 16, ,624,042 3,209, , , ,945 43,488, ,488,669 ITV 0 1,167, , ,421 21,656 9,351 49,363 10,614 14,949 1,573,976 (406,996) 0 1,166, , ,176, ,176,149 COLLEGE TOTAL 87,714, ,134,356 85,978, ,688,104 7,392, ,357 3,013,000 16,040,000 15,636,445 6,378, ,233,398 (131,235,501) 831, , ,055,745 27,928,881 1,000,000 4,481, ,985, ,451,435 (4,605,648) 536,845,787 Educational Services Ctr ,915,473 26,915, , , ,629 27,991,077 27,991,077 Information Technology 0 11,276,187 11,276, , ,594 11,566,009 11,566,009 Centralized Svs 0 74,580,372 (226,425) 74,353,947 36, ,449,787 75,840,570 75,840,570 Contingency Reserve 0 5,859,406 (831,423) 5,027,983 12,635,749 17,663,732 4,605,648 22,269,380 General Reserve 0 (121,297) (121,297) 41,478, ,357,419 41,357,419 STRS/PERS Reserve ,195,000 17,195,000 17,195,000 Prop 30 Reserve 0 0 8,500,000 8,500,000 8,500,000 Restricted Program Deficit , , ,258 SIS Completion Funds 0 0 7,813, ,200 8,377,381 8,377,381 Other District-wide 0 0 5,786, ,311 6,052,511 6,052,511 Van de Kamp Innovation 1,034,554 1,034,554 1,034, ,175 1,075 1,329,804 1,329,804 Funds for Def Maint 0 12,725,360 12,725, ,725,360 12,725,360 Undistrib (Projtd Bal) , , ,682 (13,132,356) TOTAL 87,714, ,134,395 85,978, ,688,104 7,392, ,357 3,013,000 16,040,000 15,636,445 7,413, ,267, ,267, ,724,360 1,000,000 22,000, ,721, ,714, ,714,238 S:\Budget\ \Final Budget\Sheri's Pages\[ ALLOCMODEL-FINALBUD.xlsm]AdjRev-OptB NOTES: (1) FON Subsidy includes Year 2 of ($1,000,000)

43 Budget Allocation Model FINAL BUDGET August 10, 2016 Page 8b of FINAL BUDGET TOTAL REVENUES UNRESTRICTED GENERAL FUND Net Base Revenue EPA Funds Base Allocation Increase COLA Growth Apprenticeship Non- Resident Dedicated Lottery Interest/ Other State On-Going State Mandate Block Grant TOTAL REVENUE CITY 58,653,280 10,508, , ,299, ,917, ,962 2,003, , ,237 78,017,357 EAST 107,628,418 19,710,499 1,650, ,450, ,330, ,100 3,713, , , ,848,729 HARBOR 32,948,983 5,600, , , ,001, ,446 1,047, , ,263 43,231,050 MISSION 31,334,658 5,318, , , , , , , ,387 40,044,429 PIERCE 69,022,802 12,444,390 1,055, ,545, ,957, ,329 2,303, , ,095 90,169,352 SOUTHWEST 27,362,171 4,557, , , , , , , ,699 34,579,665 TRADE-TECH 59,946,807 10,661, , ,328, , , ,898 1,962, , ,629 76,888,062 VALLEY 60,520,120 10,726, , ,340, , ,003 1,974, , ,891 77,646,000 WEST 35,617,796 6,184, , , ,183, ,182 1,176, , ,723 47,938,827 ITV 1,404, ,826 21, , ,614 14,949 49, ,351 1,810,417 UNDISTRIB/OTHER DW ,034, ,059, ,094,103 ONE-TIME ST MAND REIMB ESC/INFO TECH TOTAL 484,439,321 85,978,896 7,392, ,688, ,357 15,636,445 7,413,494 16,040,000 5,410,015 3,013, ,267,991