Fall Budget ForumProjected Fiscal Year 05/06Budget Fiscal Year 06/07

September 12, 2006

Purpose of the Forum

• Review 05/06 Results

• 06/07 Budget/SB 361

Agenda

• Budget & Fund Balances JS

• Budget Challenges JR

Revenue Uncertainties for Building the 05/06 Budget

1. Equalization continuing

2. Allowable Growth Allocation

3. Amount of COLA

4. Basic Skills

5. Deficit Factor

6. Achieving Enrollment Cap

7. Future Resident and Non-resident Fee Increase

Actual 04/05 & Projected 05/06

State Revenue

• 05/06 General Apportionment increase consists of Growth, COLA and includes Equalization and final P for E allocation from 04/05.

(thousands) 04/05 Actual

Projected 05/06 Difference

General Apportionment 52,583$ 61,674$ 9,091$ P for E 2,397 402$ (1,995) Equalization 1,308 507 (801) Part-time Comp. 624 625 0 Basic Skills (42) - 42 Lottery 2,042 2,081 39 Other 239 183 (57) Total State Revenues 59,151$ 65,472$ 6,321$

Actual 04/05 & Projected 05/06

Local Revenue(thousands) 04/05

ActualProjected

05/06 Difference Interest 482$ 464$ (18)$ Int. Student Fees 2,142 2,491$ 350 Non Resident Fees 2,208 2,464$ 256 Other 1,085 1,110$ 25 Total Other/Local Revenue 5,916 6,529 612$ Total State Revenues 59,151$ 65,472$ 6,321$ Total Revenues 65,068$ 72,000$ 6,933$

Actual 04/05 & Projected 05/06

Operating Expenses

• Salary and benefits include increases of 5% effective January 2005 and approximately 5.42% effective January 2006, 10 additional instructors Fall 2005 and the Classification Study implementation.

• Other operating expenses include $600,000 in ongoing software expense transferred from technology purchases.

(thousands) 04/05 Actual

Projected 05/06 Difference

Academic Salaries 29,630$ 32,742$ 3,112$ Classified Salaries 14,930 16,185 1,255 Employee Benefits 9,548 10,585 1,037 Supplies & Materials 1,591 1,763 172 Other Operating Expenses 5,226 5,902 676 Capital Outlay 181 190 9 Total Expenses 61,106$ 67,367$ 6,261$

Actual 04/05 & Projected 05/06

Interfund Transfers

• Transfers In consists of Continuing Ed Fees and Theatre Revenue.

(thousands)04/05 Actual

Projected 05/06 Difference

Intrafund Transfers - In 406$ (87)$ (492) Transfers OutTech/Ed Prog/Campus Equip (1,800) (1,200) 600 Banner Implementation - (2,761) (2,761) Major Maintenance (1,200) (1,565) (365) Sports Pavillion (2,055) 2,055 Parking Structure - (2,000) (2,000) Childrens Center (67) (196) (129) Net Transfers Out (4,716)$ (7,809)$ (3,092)$

Actual 04/05 & Projected 05/06 General Fund Balance

• 05/06 Projected General Unrestricted Fund Balance5% Board Operating Contingency

$ 3.8 million

Undesignated Fund Balance$ 5.4 million

Total $ 9.2 million

(thousands)04/05 Actual

Projected 05/06 Difference

Net Rev/Exp/Transfers (755)$ (3,175)$ (2,420)$ Beginning Fund Balance 13,165 12,410 (755) Ending Fund Balance 12,410$ 9,236$ (3,173)$

Actual 04/05 & Budget 05/06

Ending Fund Balances

• The decrease in Total Fund Balances is primarily from expenditures in construction (Sports Pavilion and Major Maintenance) and equipment (Technology and Banner).

(thousands)04/05 Actual

Projected 05/06 Difference

General Unrestricted 12,410$ 9,236$ (3,173)$ Equipment 6,315 6,488 173 Construction 11,443 10,281 (1,162) Workers Comp JPA Reserve 6,200 6,200 - Ending Fund Balance 36,367$ 32,205$ (4,162)$

Salaries and Benefits

• Increased from 73% to 83% as % of Revenue.• Real increase in salaries and benefits is $20.6 million

from 2001 to 2006.

Fiscal Year Ending Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06Salaries & Benefits as % of Rev. 73% 78% 84% 83% 83% 83%Total Salaries & Benefits (000's) 38,864$ 44,197$ 49,163$ 50,495$ 54,108$ 59,512$ Increase in Salaries & Benefits (000's) 5,333$ 4,966$ 1,332$ 3,613$ 5,404$ Cumulative Increase 5,333$ 10,299$ 11,630$ 15,244$ 20,648$

Other Expenses

The expenses that contributed to the increase were Supplies, Liability Insurance, Software Licenses, Legal, Advertising and Utilities.

Fiscal Year Ending Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06Other Exp as % of Revenue 10.0% 10.4% 10.6% 10.7% 10.8% 10.9%Other Expense (000's) 5,325$ 5,878$ 6,212$ 6,485$ 6,998$ 7,855$ Increase (000's) 553$ 334$ 273$ 513$ 857$ Cumulative Increase 553$ 887$ 1,160$ 1,673$ 2,530$

Growth in Revenue and Expenses

• Margin is the amount remaining after salaries, benefits and operating expenses.

REVENUE & EXPENSE HISTORY

-

10.0

20.0

30.040.0

50.0

60.0

70.0

80.0

2000

2001

2002

2003

2004

2005

2006

FISCAL YEAR END

MIL

LIO

NS Margin

Expenses

Sal & Ben

What was different for the 05/06 Year?

• Classification Study Implementation

• P for E included in Base

• Equalization reduced substantially

• COLA @ 4.23%

• Enrollment Cap @ 2.58%

• January salary and benefits increase was 5.42%

Conclusion

• We are tied to the WHIMSICAL state budget.

• If the housing market declines significantly it will throw the state into a recession.

Revenue Assumptions for Building the 06/07 Budget

1. Equalization amount – SB 361

2. Amount of COLA – 5.92%

3. Basic Skills - $502,000

4. Deficit Factor?

5. Achieving Enrollment Cap – 1.33%-2.03%

6. Future Resident and Non-resident Fee Increase?

7. Reduction in fee from $26/unit to $20/unit

Adopted & SB 361 06/07State Revenue

• General Apportionment includes COLA of 5.92%, Equalization, Basic Skills, and Growth of 0.0%

(thousands)06/07

Adopted Budget

06/07 SB361 Budget Difference

General Apportionment 67,262$ 69,569$ 2,307$ General Purpose Block Grant 1,079$ 1,079$ Part-time Comp. 625 625 - Lottery 2,042 2,042 - Other 128 128 - Total State Revenues 70,056$ 73,442$ 3,386$

Adopted & SB 361 06/07 Local Revenue

• The Difference State Revenues is from equalization estimate and the one-time Block Grant.

(thousands)06/07

Adopted Budget

06/07 SB361 Budget Difference

Interest 414$ 414$ -$ Int. Student Fees 2,739 2,739$ - Non Resident Fees 2,613 2,613$ - Other 1,144 1,144$ - Total Other/Local Revenue 6,909 6,909 -$ Total State Revenues 70,056$ 73,442$ 3,386$ Total Revenues 76,965$ 80,351$ 3,386$

Adopted & SB 361 06/07 Operating Expenses

• Two additional security personnel were omitted from budget.

(thousands)06/07

Adopted Budget

06/07 SB361 Budget Difference

Academic Salaries 35,242$ 35,242$ -$ Classified Salaries 18,416 18,486 70 Employee Benefits 11,340 11,376 36 Supplies & Materials 1,976 1,989 13 Other Operating Expenses 7,164 7,164 - Capital Outlay 194 194 - Total Expenses 74,333$ 74,451$ 118$

Adopted & SB 361 06/07 Interfund Transfers

(thousands)06/07

Adopted 06/07 SB361 Difference

Intrafund Transfers - In (17)$ (17)$ - Transfers OutTech/Ed Prog/Campus Equip (1,800) (1,850) (50) Major Maintenance (1,200) (1,200) - Childrens Center (163) (163) - Net Transfers Out (3,180)$ (3,230)$ (50)$

• The $50,000 is a transfer from Ed Programs expense to the conversion of the classroom and provide furniture for the student success offices and conference rooms.

Adopted & SB 361 06/07 General Fund Balance

• The Difference is from equalization and the one-time Block Grant.

(thousands)06/07

Adopted Budget

06/07 SB361 Budget Difference

Net Rev/Exp/Transfers (548)$ 2,668$ 3,216$ Beginning Fund Balance 9,236 9,236 - Ending Fund Balance 8,688$ 11,904$ 3,216$

Projected 05/06 & SB 361 06/07 General Fund Balance

• Revenues: $4.4 million equalization, 5.92% COLA, Basic Skills, and one-time allocations.

• Expense: 5.92% COLA, classification study, and 5.42% salary increase.• Net Transfers Out: Parking Structure and Banner.

(thousands) Projected 05/06

06/07 SB361 Budget Difference

Total Revenues 72,000$ 80,351$ 8,351$ Total Expenses 67,367 74,451 7,084 Net Transfers Out (7,809) (3,230) 4,578 Net Rev/Exp/Transfers (3,175)$ 2,668$ 5,844$ Beginning Fund Balance 12,410 9,236 Ending Fund Balance 9,236$ 11,904$ 2,668$