BUDGET FORUM JANUARY 28, 2015

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1 BUDGET FORUM JANUARY 28, 2015

2 Presented By Henry D. Shannon, Superintendent/President Lisa Bailey, Interim Associate Superintendent, Business & Economic Development Anita D. Undercoffer, Executive Director, Budgeting Services & Fiscal Services 2

Budget Forum Presentation Outline Historical Perspective Revenue/Expense, Ending Balance, Funded FTES 2015-2016 Governor s Proposed Budget

3 Budget Forum Presentation Outline Historical Perspective Revenue/Expense, Ending Balance, Funded FTES Governor s Proposed Budget Chaffey College Budget Institutional Planning Income/Expense Adjustments Projections Chaffey College Budget Development 3

Historical Perspective State/District recovering from recession that began in 20

55% from 2008-2009 through 2013-2014 = state revenue reductions No state funded COLA from 2008-2009 through 2013-2014 2014-2015 budget does not regain ground for lost

4 Historical Perspective State/District recovering from recession that began in FTES student workload reductions of approx. 2.55% from through = state revenue reductions No state funded COLA from through budget does not regain ground for lost purchasing power of recessionary years, but continues to support restoration of access and recovery District budgeted revenue and expenses were not aligned; prior year balance used to balance budget and actual expenses District s actual ending balance/reserves had been in significant decline District employed a number of strategies to minimize the effects of the recession on the campus community 4

5 Chaffey College Revenue & Expense Trend - Actuals $83,000,000 REVENUE & EXPENSE HISTORICAL TREND $81,000,000 $79,000,000 $77,000,000 $75,000,000 $73,000,000 $71,000,000 $69,000, Proj. Revenue $78,742,208 $77,603,454 $77,478,943 $70,111,325 $73,291,949 $77,289,753 $81,847,374 Expenses $77,347,260 $77,792,878 $74,154,089 $73,514,492 $74,753,268 $80,161,794 $81,241,387 Revenue Expenses 5

6 Chaffey College Actual Ending Balance/Reserves $20,000,000 ENDING BALANCE/RESERVES $19,000, % $18,000,000 $17,000,000 $16,000, % 20.20% 21.25% $15,000,000 $14,000, % $13,000,000 $12,000, % 14.64% $11,000,000 $10,000,000 6

7 7 Chaffey College Funded FTES (Full-Time Equivalent Students) FTES 15,000 14,500 14,000 13,500 13,000 12,500 12,000 11,500 Fiscal Year

State Budget 2015-2016 Governor s Proposed Budget January 9 -

success and equity for education Balanced and reflects strong

8 State Budget Governor s Proposed Budget January 9 - Governor released Budget Proposal Supports access, success and equity for education Balanced and reflects strong economic outlook Prop 2 Rainy Day fund of $2.8b (voter-approved) 8

9 Proposed State Budget Increases/Changes Access/Growth: $106.9m or 2% statewide (based on new growth formula) Chaffey s estimate: $737,659 at 1%; $1.48m at 2% COLA: $92.4m or 1.58% Chaffey s estimate: $1.1m Base Funding Increase: $125m to assist with covering increasing operating costs. Allocation method TBD Mandated Cost Claims: $353.3m one-time to pay down past mandated cost claims based on a TBD per FTES amount. Deferrals: $94.5m one-time funding to eliminate all state cash deferrals 9

Proposed State Budget 2015-2016 Increases/Changes

10 Proposed State Budget Increases/Changes Enrollment Fees: $46 per unit Student Success: Additional $100m for SSSP and $100m for Student Equity Chaffey s estimates: SSSP = $1.2m and Student Equity = $859,000 - $1.2m Proposition 39: $39.6m for energy efficiency projects and workforce development Chaffey s estimate: $400,000 10

11 State Budget Risks Recessions - occur in cycles; next one overdue larger revenue increase may be an anomaly Prop 30 - temporary; begins to phase out in 2016 through 2018 ($7b in annual state revenues) State Debt - large amounts of outstanding debt PERS, STRS increases, other post employment benefits unfunded liability SSSP funds match is still 2:1 (under discussion and may be lowered) 11

12 Proposed State Budget Timelines The proposal is just the beginning of state budget process Jan-May: Legislative hearings Mid May: Governor releases May Revise June 15: Constitutional deadline for Legislature to send budget to Governor June 30: Governor to sign budget 12

capture available growth funding from the state

13 Chaffey College Institutional Planning Instructional Planning Maintain student access through a comprehensive set of course offerings District on track to earn base apportionment and capture available growth funding from the state Student Services Planning SSSP funding Student Equity funding 13

Chaffey College 2015-2016 Budget Adjustments - INCOME 2.

58% COLA 1,165,501 Total Income Increase $2,640,819

14 Chaffey College Budget Adjustments - INCOME 2.00% Access/Growth $1,475, % COLA 1,165,501 Total Income Increase $2,640,819 Percentages are based on Governor s statewide proposal and are subject to change. 14

15 Chaffey College Budget Adjustments - EXPENSES Step Increase (Full-time employees) $448,550 Additional Faculty 454,008 Health & Welfare 400,000 STRS 1.85% 60,000 PERS.829% 21,000 Voluntary Retiree Plan (919,369) Existing Retiree Plan 220,000 GASB 45 Future Retiree Liability 300,000 Board Elections 700,000 Technology Replacement TBD Technology Master Plan TBD Total $1,684,189 Assumptions are as of today and subject to change prior to the tentative budget. 15

16 Budget Projections YEAR-END UNRESTRICTED ADOPTED PROJECTED ADOPTED GENRAL FUND BUDGET 12/31/14 BUDGET Revenue 81,107,472 81,847,374 81,107,472 Increase 2,640,819 Total Revenue 81,107,472 81,847,374 83,748,291 Expenses 85,981,216 81,241,387 85,981,216 Cost Increases 2,603,558 Cost Reductions (919,369) Total Expenses 85,981,216 81,241,387 87,665,405 Surplus/(Deficit) (4,873,744) 605,987 (3,917,114) Reserves/Ending Bal. 6,413,079 11,892,810 7,975, % 14.64% 9.10% Assumptions are as of today and subject to change prior to the tentative budget. 16

Chaffey College 2015-2016 Budget Development Budget Development

2015 (10:00-11:30am) WH-102 Tentative Budget Submitted for Board

17 Chaffey College Budget Development Budget Development Workshop Dates March 5, 2015 (2:00-3:30pm) MACC-208 & March 6, 2015 (10:00-11:30am) WH-102 Tentative Budget Submitted for Board approval in June Adopted Budget Submitted for Board approval in August 17

CHAFFEY COMMUNITY COLLEGE DISTRICT TENTATIVE BUDGET

CHAFFEY COMMUNITY COLLEGE DISTRICT TENTATIVE BUDGET 2017 2018 TENTATIVE BUDGET Developed and Prepared by: Lisa Bailey, Associate Superintendent Business Services and Economic Development Anita D. Undercoffer, Executive Director, Budgeting and Fiscal Services