Presentation to the District Budget Advisory Committee January 26, Presented by: Andy Dunn Vice Chancellor Finance & Administrative Services

Transcription

1 Presentation to the District Budget Advisory Committee January 26, 2012 Presented by: Andy Dunn Vice Chancellor Finance & Administrative Services

2 Areas of Discussion Summary FY Changes Review P-1 and Enrollment Metrics Summary of Governor s FY Budget Proposal Budget Solution Outline Framework for Possible Mid-Year Cuts Fund Balance Trend Outline Budget Stability Fund Coast Metrics Comparison of Beginning Balance and Revenue Multi-Year Budget Projections Discussion of Budgetary Risk Looking Ahead January 26,

3 What has taken place since the Adopted Budget? Tier II mid Year cuts $30 million to buy down fee increase deferral (Coast: One time $900,000 impact) $72 million base cut (Coast: On-going $2,300,000 impact) Final Recalculation for released early February Provide basis for final ( ) budget and FTES figures P-1 Enrollment Filed January 26,

4 CCCD FTES Comparison CCC GWC OCC Total P-1 6,074 10,097 17,121 33, Budget 5,709 10,022 17,117 32,848 Over/(Under) Cap January 26,

5 CCCD Non-Resident FTES OCC , , , , , GWC CCC TOTAL 1, , , , , , , , January 26,

6 Total Funded FTES 36,000 35,000 34,000 Funded FTES Projected FTES 33,000 32,000 31,000 30,000 29,000 28,000 27, Final Budget Projected Base Workload Reduction January 26,

7 Governor s FY Budget Proposal (1/4) Released on January 5, 2012 Projected State Deficit ~ $9.2 Billion $4.1 Billion carries forward from $5.1 Billion emerging in the FY Centerpiece is $7 Billion Tax Measure (5-year deal) If approved: Sales Tax increase by ½ cent Income tax increase on high income earners No reductions for Community Colleges 4% annual increases thru January 26,

8 Governor s FY Budget Proposal (2/4) Prop 98 $2.4 Billion in deferral reduction $2.4 Billion in state GO Bond debt service CCC apportionments No COLA No Growth $147 million state aid reduction mirroring property tax increase from RDA demise Categorical Programs 15 Programs collapsed into "Special Services and Operations Block Grant 3 programs remain autonomous Student Fees No change beyond scheduled increase for Summer 2012 January 26,

9 Governor s FY Budget Proposal (3/4) If Tax Proposal Approved: Increase apportionments by $218 million ( Buys down Deferrals) No COLA No Growth If Tax Proposal Fails: $300 million system impact $8.2 million impact to Coast 5.56% additional workload reduction to Coast January 26,

10 Governor s FY Budget Proposal (4/4) Mandate Reimbursements Redevelopment ABXI 27 ruled constitutional, abolishes RDA s Dismantles 400 RDA s throughout the state Long Term plan for Higher Education ( through ) Increase funding for each segment by 4% Curtail fee increases Shift Lease-Revenue Bond debt to each system Must achieve administration's stated priorities January 26,

11 Budget Solution Schematic January 26,

12 One-Time Budget Solution Simulation Estimated Fund Balance $18,000,000 Deficit Factor (Student Fee shortfall) ($3,000,000) Estimated Net Available Fund Balance $15,000,000 General Reserve ($12,500,000) Balance/(Deficit) $2,500,000 Create "Budget Stability Fund" ($8,211,252) Election Cost ($500,000) Subtotal ($8,711,252) Balance/(Deficit) ($6,211,252) Transfer-In (other programs/funds) TBD Transfer-In Entity Balances ($6,211,252) Balance $0 January 26,

13 On-Going Budget Solution Simulation Scenarios Jan-12 Taxes - Yes Revenue change ( ) COLA $0 Growth/Restoration (1) ($2,300,000) Deficit factor (2) ($300,000) Total Revenue change estimate ($2,600,000) Revenue change ( ) COLA $0 Growth/Restoration (3) $0 Deficit factor $0 Total Revenue change estimate $0 Emerging Internal Operating Deficit STRS $0 PERS ($473,000) Health Benefits (4) ($3,749,000) Step/Column ($725,000) UIC ($100,000) Subtotal - CCCD Internal Operating Deficit ($5,047,000) Total Projected Deficit ($7,647,000) District-Wide Savings Estimated District-wide (Admin 9) savings $0 Subtotal $0 January 26,

14 On-Going Budget Solution Simulation (cont.) Scenarios Jan-12 Taxes - Yes Site Amount OCC ($3,548,208) GWC ($2,173,277) Coastline ($1,236,520) District office ($688,230) Total ($7,647,000) Assumptions 1. Tiered mid-year cuts 2. Estimated Coast impact from OC property tax grab 3. Estimated Coast impact from $300 million base reduction 4. Actuarial figure from Driver-Alliant January 26,

15 Comparison of Beginning Balance, Revenue & Expense Unrestricted General Fund 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000, Actual Actual Actual Actual Actual Budget Projected Beg Bal 19,125,024 28,794,303 23,601,080 21,096,788 19,698,262 27,289,190 15,000,000 January 26,

16 Fund Balance Trend w/comparable Colleges Ending Balance as of June 30, 2010 $50,000,000 40% $45,000,000 $40,000,000 $35,000,000 $30,000,000 35% 30% 25% $25,000,000 20% $20,000,000 $15,000,000 $10,000,000 $5,000,000 15% 10% 5% $0 Peralta Riverside Coast Los Rios San Mateo Contra Costa Ventura Foothill deanza Rancho Santiago North Orange Kern 0% Ending Balance ($) Required Reserve (5%) Over (under) Ending Balance (%) January 26,

17 Fund Balance Trend w/comparable Colleges Ending Balance as of June 30, 2011 $60,000,000 40% $50,000,000 $40,000,000 35% 30% 25% $30,000,000 20% $20,000,000 $10,000,000 15% 10% 5% $0 Peralta Riverside Los Rios Coast San Mateo Ventura Kern Contra Costa North Orange Foothill deanza Rancho Santiago 0% Ending Balance ($) Required Reserve (5%) Over (under) Ending Balance (%) January 26,

18 State-Wide Fund Balance Averages 40% 35% 30% 25% 20% 15% 10% 5% 0% Unrestricted General Fund Net Ending Balance as a Percentage of Unrestricted General Fund Expenditures 16.20% Average Statewide 5.60% Lowest Statewide 36.80% Highest Statewide 10.50% Coast January 26,

19 What is the Budgetary Risk Coast is Facing? Shrinking Budget Another year of budget and workload reductions. Mid-Year Cut Threats Governors FY Budget Proposal is based on passage of $7 billion Tax measure on November 2012 ballot. State Budget Assumptions LAO states Governor s Budget proposal will only generate $5 Billion rather than $7 billion. Student Fee shortfall DOF estimates appear not to consider increase BOG waivers Apportionment Cut $146.9 million to be cut from state support with backfill from redirected Redevelopment Agency Property tax. January 26,

20 How will Coast Mitigate this Risk? For on-going expense reductions Develop and issue targets for reduction. For potential mid-year budget reductions Project the impact of failure of November tax measure. Current estimate reflects $8.2 million. Identify one-time funds in ending balance Establish Budget Stability Reserve to address mid-year cuts with one-time resources. If cuts occur, will require structural solution in Will not further impact service or access this year Unfunded FTES increases. Carry structural imbalance into next year January 26,

21 JANUARY FEB/MAR APRIL MAY JUNE JULY AUGUST SEPTEMBER Project Impact of Governors January Budget Proposal. Develop and Issue Targets. Looking Ahead Initiate Budget Process. Colleges and District Administrative Services continue input. Budget input for Tentative Budget due from colleges Tentative Budget adopted by Board of Trustees. Budget input for Adopted Budget due from colleges Adopted Budget reviewed by Chancellor s Cabinet. Adopted Budget available for public inspection and review prior to public hearing and adoption in the District Office Lobby Adopted Budget presented for public hearing and adoption by Board of Trustees Adopted Budget filed with the County Department of Education. January 26,