Coast Community College District

Meeting of the

District Budget Advisory Committee

December 2, 2010

• Areas of Discussion– Review of Internal Operating Deficit– Probable Impact of State Imbalance – Review of Budget Assumptions– Approaches toward Closing Internal Operating Deficit– Time Constraints– Budgetary Risk– Looking Ahead

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Where Were We at the Time of the 2010-2011 Adopted Budget?

2011-12 2012-13

A) 2010-11 Budget Reduction -$ -$ (covered by one-time funds)

Board Election -$ 550,000$

Estimated Mandatory IncreaseSTRS (1%, 2%) 436,000$ 872,000$ PERS (0.9%, 3%) 319,500$ 1,065,000$ UIC -$ -$

755,500$ 2,487,000$

B) To Protect Categorical Contract Employees -$ -$

C) Negotiable ItemsSalary Increase CFE unknown unknown CFCE/Classified unknown unknown CCA unknown unknown CDMA/Other unknown unknown

Health Benefits 1,000,000$ 2,000,000$

Step & Column 1,225,000$ 2,450,000$ 2,225,000$ 4,450,000$

TOTAL SHORTFALL 2,980,500$ 6,937,000$ CUMULATIVE SHORTFALL 2,980,500$ 9,917,500$

Budget Shortfall Forecast for Future Years as of 9/15/10

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What Underlying Budget Assumptions have Changed?

Adopted Budget September 2010 November 2010

COLA - .38 0Growth 0 2.21

What is Happening with the State?• LAO Fiscal Outlook

– $6B current year deficit– $19B Budget year deficit– $20B annual imbalance thru 2015-16– Urges Legislature to repeal Prop 98 enhancements including CCC

growth (restoration)

• Governor calls Special Session of the Legislature– Will convene December 6 when new membership is seated

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What is the Outlook for the Community College System?

• 2010-11– Increased likelihood of mid-year budget re-opener– “Claw-back” of restoration

• 2011-12– $255 million Prop 98 CCC reduction (CCLC)– $230 million Prop 98 CCC reduction (CCCCO)

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• Internal Operating Deficit– ~$3 million

• State Budget Cut– We are approximately 3% of system– A likely reduction of $7 to $7.5m

• Total Impact ~$10 million

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What does This Mean for Coastfor the 2011-12 Fiscal Year?

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What Approaches Can We Take to

Close the 2011-12 Deficit?

1) All Expense Reductions

Scenario 1 2011-12Est. as of 2010-11 Adopted Budget

Potential RevenueEliminate Negative COLARestoration

Total Revenue estimate $0

Emerging DeficitSTRS ($436,000)PERS ($319,500)Health Benefits ($1,000,000)Step/Column ($1,225,000)Subtotal - CCCD Internal Operating Deficit ($2,980,500)

Likely state imposed budget cut ($7,000,000)

Possible Negotiated Solutions $0

Total Projected Deficit ($9,980,500)

Site Allocation Amount

OCC 46% ($4,630,952)GWC 28% ($2,836,458)Coastline 16% ($1,613,847)District-wide 0% $0District offi ce 9% ($898,245)

Total 100% ($9,980,500)

Coast Community College District Comparison of Beginning Balance, Revenue & Expense

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Actual Actual Actual Actual Budget Projected2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

Beginning Balance 19,125,024 28,794,303 23,601,080 21,096,788 19,698,262 13,500,000

Federal Revenue 6,747,733 7,582,538 8,359,093 10,745,253 8,883,008 8,883,008State Revenue 97,649,095 99,114,856 95,160,681 82,816,482 82,061,398 75,061,398Local Revenue 109,064,789 111,482,136 115,332,768 118,407,039 118,464,130 118,464,130Other Financing 11,182 2,448 3,074 17,461 500,000 500,000Total Revenue 213,472,799 218,181,978 218,855,616 211,986,235 209,908,536 202,908,536

Certificated Salaries 72,646,093 81,423,245 83,247,032 80,805,978 73,419,506 74,344,506Classified Salaries 50,327,119 55,929,069 56,482,760 55,174,407 51,538,206 51,838,206Staff Benefits 42,092,522 45,267,659 48,164,793 48,983,373 48,760,557 50,516,057Books and Supplies 4,732,962 5,259,579 4,289,346 3,452,601 4,344,660 4,344,660Other Operating Exp & Svcs 20,039,794 20,955,085 22,659,384 19,621,842 25,302,343 25,302,343Capital Outlay 5,215,648 5,713,967 2,345,078 2,072,907 2,590,851 2,590,851Student Aid & Other Outgo 8,749,138 8,826,594 4,171,515 2,963,061 3,952,413 3,952,413Total Expenses 203,803,276 223,375,198 221,359,908 213,074,169 209,908,536 212,889,036

Net Income/Loss 9,669,523 (5,193,220) (2,504,292) (1,087,934) - (9,980,500)

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What will Further Inform this Decision-Making Process?

• 2010-11 State Budget StatusSpecial Session of the Legislature Commences December 6, 2010.

• 2011-12 January Budget ProposalReleased on or about January 10, 2011

• 2011-12 May Revise

Revenue “Claw Back” Mid-Year Budget “Re-opener” Overly Optimistic Budget Assumptions (State) Temporary Taxes signed into law in Feb. 2009 will

sunset in 2011-12 Persistent underlying structural imbalance (State) Imposition of additional deferrals

$150M in 2001-02$832M current year

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What are the Budgetary Risks Coast is Facing?

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What Time Constraints are We Under?

• 2011-12 Budget Development– 2011-12 State Budget Proposal January

– Tentative Budget Development Jan to May

– “Lock Down” Tentative Budget May 1

– Adopt Tentative June

– “Lock Down” Final (Adopted) Budget August 1

– Adopt Final Budget September

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Looking AheadWe will Recalculate Multi-Year Projections at the Following Critical Junctures:

•January Budget Proposal

•May Revise

•With Tentative Budget

•With Adopted Budget

•Major Changes such as Mid-Year State Budget Re-

Open.