December 16, 2010

Budget Sub-Committee Report to College Planning Council

Introd uction

Since the start of this academic year, the Budget Sub-Committee has focused its attention onunderstanding and analyzing both the one-year budget for FY2010-11and the five-year projectionsthrough FY2014-15. Notwithstanding the uncertainty and confusion that remains around state fundingfor the current year never mind five years out, the Sub-Committee has been able to discern revenue andexpenditure trends that lead it to believe that serious action is required in order to assure fiscal solvencyover the five years. The nature of that action is such that it is beyond the scope of the Sub-Committeeand must be referred back to the College Planning Council in the undernoted recommendation.

Work Done by the Sub-Committee to Date

The Sub-Committee has fully analyzed the "final" budget for FY2010-11 which was approved by theBoard of Trustees in October. It has been clearly stated that the budget is not final at all and will besubject to change due to state funding uncertainties coming not only out of the state budget approved100 days into the fiscal r.ear but also the very real likelihood of mid-year funding cuts. In addition, theSub-Committee has tracked the changes in budget between this fiscal year and last and compared thechanges to the assumptions that were contained in year 1 of our five-year projections. By and large, thechanges mirrored the assumptions that had been previously identified. However, there were somechanges to expenditure budgets that were unplanned such as increased benefits costs and increasedcosts associated with the academic reorganization, consequent to negotiations, but these were offset byoperating savings in utilities as a result of initiatives first discussed by the Budget Task Force last year.

The following revenueslwere carefully analyzed becausethe numbers ultimately (and currently)confirmed by the state were different from the numbers projected in our one-year budget for FY2010-11:

• BaseRevenues• Growth Fundin ~• Categorical and Restricted Funding• One-time Funding• Mandate Funding• Funding Deferrals

In addition, conslderatlon was given to the widely-predicted possibility of cuts to state funding in early2011. It appears that grbwth funding and mandate funding might be the most vulnerable as neither hasactually yet been paid t6 districts. CODwill initially include both in its updated FY2010-11 budget as well

The Sub-Committee will continue to focus on the changing budget as new information from the statebecomes available and ~ill provide updates to the College Planning Council on a regular basis. Inaddition, it will work cI sely with Council on identifying the budget ramifications of the structuralchanges that the latter evelops.

as the other revenue changes noted above but it will not create any corresponding expenditure budgets.Rather, the revenues will be projected to flow into reserves and should the funding ultimately be cut thereserves will be reduced again without the need to cut expenditures.

ConclusionsThe Sub-Committee has been informed that our FY2010-11 budget is fairly secure even if mid-yearfunding cuts are sustained. The budget reflects the action plan that was developed last year to makesavings from each of the employee groups, reductions in programs and services, and savings from thenon-replacement of leadership retirements and vacancies.That action plan will be fully achieved. Theproblem is more likely to emerge in years 2 to 5 of the five-year budget. Actions plans have already beendeveloped which include further projected savingsfrom employee groups in years 3 through 5,curtailment of any additional benefit costs to the district over all 4 years, and some operating savings aswell. Evenwith these planned actions identified, it is acknowledged that fiscal solvency (as evidenced bythe existence of any reserves) cannot be maintained in year 5 and all reserves may be consumed by year4 if any of our revenue and expenditure projections prove to be inaccurate. Consequently, the BudgetSub-Committee has reached the conclusion that further action needs to be planned over the next 4years that can only come from cutting expenditures permanently in programs and services. This action,the Sub-Committee feels, can only come from a reassessment of the College's mission and goals and adeliberate narrowing of the programs and services to be offered to students.

RecommendationGiven that current five-I ear budget projections cannot assure fiscal solvency in year 5 in spite of theaction plans currently blUilt into the projections, the Sub-Committee recommends to the CollegePlanning Council that structural reductions throughout the College should be contemplated that willresult in the necessary budget reductions. Such structural reductions can only be done in an orderlymanner by the College Planning Council using something of the reverse process to that which it hasadopted in connection with planned growth of the College. It is recommended that the balance of thisacademic year and probably much of next year be dedicated to the careful consideration of a smallercollection of programs and services the cost of which will allow the five-year budget projections to shiftto a positive outcome.

DESERT COMMUNITY COLLEGE DISTRICT2010 - 2011 FINAL BUDGET

GENERAL FUND UNRESTRICTED2010-11 Changes

B

C

D

2009-102009-10

FinalBudget

FinalBudget

Between Notes

Actual BudgetYrs.

A37,231,591 38,045,591 814,000

33,280

97,739

78,564

37,589,195

232,907

1,272,572

1,740,695

33,280

1,269,000

1,618,015

1,171,261

1,539,451

1,023,68340,635,369 40,965,86639,942,303

il!i1! Full-Time Teaching Salaries 8,829,616 8,715,281 8,313,410 (516,206) 1 H~(mm Adjunct Teaching Salaries 4,731,753 4,908,859 4,816,970 85,217 2 mw11m: Other Academic Salaries 2,011,273 1,968,724 2,193,591 182,318 3 [t:]\'11m! Administration Salaries (1) 3,917,572 3,951,571 3,961.186 43.614 4 mil;mw Classified Salaries, Aides 1,203,241 988,823 1,260,391 57,150 5 m:i:

II~I~~ii~~~~~;fue,::~:;~:~:~::~~:~(~~:~)~II11m: Sub-Total Operating Expense 39,790,699 38,170,476 39,738,362 (52,337) m:i:

~1:: Capital Outlay 264,553 151,217 264,553 ~~i'@H Sub-Total Operating Exp, & Capital Outlay 40,055,252 38,321,693 40,002,915 (52,337) \Uii!l)lii Excess Revenue over (Expenditures] (112,949) 2,513,676 962,971 1,075,920 mil;~ illmm Transfers within General Funr 707,329 667,274 720,524 13,195 1m:.:1m;Transfers to Fund 6X 537.606 544,316 574,294 36,6B8 :[:[1;~I~Total Expenditures 41,''',187 "',""" 41,297,'" """I 1~11:

iHiH Excess Total Expenditures over Hm

IIIG'~~ii;~;i~:~II::~an~.; 1,"',08' :(;~;;;~ III:;nm Board Election Hold Back (llH

liil! ','«.'" ',m,m ',M',"" I~I[ii!W General Fund » Ending Balance (~eserve) 5,386,645 8,046,615 7,714,768 Wi:'Will (1) Mgmt., Classrfied Supv, & Confiden ial mm·:mm~~~m~mmwmmmmwm~mwm~m~m~m~m~mfm;miHnnmfmlmmm1Wmmf1mm~m!mUmHHfmHiffmillmHW)HWimmHm~mmWIW~~~HfHmHHWmmH1WWHmimitmHHHw~~m~HmmHHmmHW1~}HJ~

V:l0-11 Final Budgetvl Final 10/11/2010 Page 1

,DESERT COMMUNITY COLLEGE DISTRICT

2009-10 FINAL BUDGETUnrestricted General Fund Income Estimates

2009-10 2009-10 2010-11 Notes

Budget BudgetDetail Actual Detail Changes

BASE REVENUESCalculated Base Revenue 37.231.591 37.231.591FTES Growth Adjustment - 814.000Annual COLA - -

AdjUsted BASE REVENUE 37.231.591 37.589.195 38.045.591 814.000 A

FEDERAL REVENUE

I

- 232.907 33.280 33.280 . B.STATE INCOMEP. T. Faculty Equity Pay 194.050 171,874 172,000Lottery 850,000 1,061.957 1,062.000Funding Obligation Settlement 66,711 - -

Property Tax Backfill - - -Student Enrollment Fee (2%) 35,500 29,237 30.000Other 25,000 9,704 5,000Total Other Revenue 1,171,261. 1,272,572 1,269,000 97.739 C

LOCAL REVENUESRentals and Leases 18,000 17,800 17,800

Interest 200.000 97.780 98.000Nonresident/Foreign Tuition 1.216,451 1,267.779 1.202,415

ParKing Fines 80,000 157,219 157,000

Misc. Local Income 25,000 200.117 142.800Total Local Revenues 1,539,451 1,740,695 1,618,015 78.564 D

TOTAL REVENUES 39,942.303 40.835,369 40,965,886

BEGINNING BALANCE 6,744,529 8,046.615TOTAL RESOURCES 46,686,832 49,012,501 2.325,669 E

. I41,300,187 41.297,733Less: Expenr,lltures (includes transfers)

- -41,300,187 41,297,733 2,454 F

5% Required Reserve 2,065,010 2,064,887

Less: Other Reserves 3.321,635 5.649,881

Less: Reserve for one-time - -

TOTAL ContingencylEnding Baja ce 5,386,645 7,714,768 2,328,123

Y:l0-11 Final Budgetvl final incomel0/10/201012:0S PM. Page 2

CHANGES FROM 09-10 BUDGET in 10-11 FINAL BUDGET

INCOMEA New Growth Estimate 814,000

B Federal FundIng From ARRA 33,280

C One-Time, Enrollment & Other 97,739

D Local Income changes 78,564

EXPENSE1 Faculty Steps 242,773

Reduced Summer Class Schedule (146,974)

Budget for Additional Future Faculty (250,000)

Retirements!Recruitment·net (362,005)

2 Adjunct Estimated Steps 25,000

Class Schedule Changes Estimate! Recruitment 60,217

3 Reduced Summer Class Schedule (55,994)

Lead Faculty 104,000

Academic Skills Center 55A35Development Education 25,000

Schedule Change Estimates 53,877

4 AdminIstration Steps 81,609

Leadership Layoffs (296,042)

Retlrements/Recrultment·net 258,047

5 Classified BU StepsAthletics 20,000SCience/Math 42,588Student workersl 95,455

Schedule changT Estimate (44,905)

6 Reduced Class sc,hedule Estimate

Faculty 403B Estimate (90,000)

Faculty & Leadership PMI (130,000)

H & W Increases 151,950

7 Increase of Supply Expenses:

Miscellaneous Increases-net 11,409

Information Systems 5,000

Safety 13,669

Bursar's Office 6,500

LIbrary 6,000

8 Increase contrac1ts Expenses:

Board Election (80,000)

legal Costs 100,000

Propertv & Liabi ,itY Insurance 29,059

Miscellaneous Increases-net 15,995

H:l0·11 Final Budgetvl changes iO/1O/2010 Page 3

DESERT COMMUNITY COLLEGE DISTRICT2010~2011 TENTATIVE RESTRICTED BUDGETS

Beg. Estimated TOTAL m Salaries Supplies Contracts Capital Other Transfers ··TOTAL [$$ back toH

Balance Income Resources f~ & Benefits & Materials & Services Outlay Outgo Adjust Outgo Fund 11]

FUND 12 - 0101 - GENERAL FUNI) RESTRICTED ~h

President: ~

Resource Interest & Misc 190,266 233,000 423,266 ~ 40,016 273,423 46,876 60,951 423,266I,·

President 11,997 11, 997 ~~ 11,997 - 11,997~ITIP 33,729 33,729 ~ 18,729 15,000 - 33,729

)!i

ITIP Ubrary 16,956 16,958 ~ 16,958 16,958

TIIP Technology 9,992 9.992 ~ - 992 9,000 9,992

Adminlstrative Services: mStaff Diversity/Affirm, Action 9,848 14,352 24,200 ~ 5,848 14,352 4,000 . 24.200};;Staff Development 227,1'05 170,000 397,705 ~ 35.250 362,455 397,705,.State Block Grant

,',5117,B67 117,967 ~ 51,416 66,551 117,967

Hazardous Substance/Maint 6,359~

6 359 ~I 2, 186 4,173 6,359~ ~Administrative Allowance 29,856 15,155 45,011 H 6,630 38,381 45,011

Academic Affaire; ~Library 19,329 34,000 53,32911 53.329 53,329

Gain 28,000 28,000 ~ 10,000 12,000 6,000 28,000,0

Basic Skills1ft

438,528 300,000 738,528 ill 369,113 17,995 351,420 T.l8,528

Boone Endowment 3,064 3,064 ~l 220 2,844 3,064

Career Technical Equipment 258,S14 258,914 m 258,914 258,914,~Perkins IV 240,136 240.13611 51,366 72,741 56,845 43,184 16,000 240,136

TANF 26,988 26,988 ~ 23,729 3.259 26,988'<

CalWORKs 1.18,079 118,079 ~ SO.017 38,062 118,079.

Student Services:[~

p]

Title V 1,013,972 ~ 272,099 12,000 659,486 3,500 66,887 1,013,9721,013,972 ~

TitHe V - Student learning 637,207 637,207 Bf 204,879 30,000 372,328 30,000 637,207i;';

Student ActivitiesfASCOD 21,791 6,000 27,791 ~ 2,055 12,262 18.474 3,000 (8,000) 27,791Ii.

Veterans Program 1,380 1,700 3,080 ~ 805 2,275 3,0801l!

Financial Aid 272,831 272.831 ~ 261,169 4,000 7,662 272,831

Transfer/Articulation 573 573 ~ 573 573

Articulation(CAN) 1,506 1,506 ~[ 300 1,206 1,506

Matriculation - Credit 231,601 231,601 ~ 205,612 19,500 4,489 2,000 231,601

Matriculation - Non Credit 94,545 ~ 93,888 657 94,54594,545 1,

Disabled Student Prog. & Svs. 498,493ffi 478,343 8,600 8,900 2,650 498,493498,493 t

DSPS Workability . 273,742 273,742 ~ 241,196 2,200 1.300 3,043 26,003 273,742rsDSPS·ACES 220,000 220,000 ~ 189,749 6,790 20,961 2,500 . 220,000Upward Bound 414,693 414,693 ~ 276,599 33,770 61,854 3,350 39,120 414,693~EVe Support Services - ACES 220,000 220,000 m 189,749 6,790 20,961 2,500 220,000

mStudent Support Grant - ACES . 344,731 344,731 ~ 281,300 18,275 23,656 6,500 15,000 344,731lOInternational Education 60,000 1,144,537 1,204,537 ~ 454,965 28,400 364,800 2,000 197,251 8,000 1,055,416 149,121Intensive Engllsh Academy 10,000 139,200 149,200 ~ 90,000 6,600 34,700 3,000 10,000 144,300 4,900Equal Opportunity Program 289,037 289 037 ~ 201,377 2,500 2,250 7,000 75,910 289,037' ~.EOPS-CARE 52,843 52,8431 3,991 1,000 243 47,609 52,843

Academlc.sffatrs:mApplied Science 37,831 37,831 ~ 5,000 5,000 27,831 37,831

Govemor Career Tech Ed Initiative Iii175,702 175,702 ~ 20,000 6,000 126,702 23,000 175,702Career Opportunities/Expl. In Sci. 138,229 138,229 ~ 28,138 25,000 25,000 25,000 35,091 138,229i.1Business Industry Collaborative 9,605 9,605 ~ 9,605 9,605CA EarlyDhildhood Mentor 150 2,000 2,150 lu 1,000 1,150 2,150Chlld De\elopment Consortium i)i

15,000 15,000 i1J 15,000 15,000p.~Nursin9.',NSNA 14,246 14,246 m. 14,246 14,246."Child Developmerit Center 109,664 109,664 ~ 8,349 16,303 85,012 109,664Nursing Tech. Growth Grant 260,687 260,687 ~ 199,495 6,192 5,000 5,000 45,000 260,687ifjScience/Mathematics 11,583 11,583 ~ 9,583 2,000 11,583Math Open Doors Grant 4,231 4,231 ~ 4,231 4.231MESA - State Grant 67,416 67,416 ~ 39,887 13,334 6,250 7.945 67,416CA Math/Science Partnership 1,757 1,757 ~ 1,757 1,757STEMS Majors Scholarships E2

497,610 513,150513,150 513150 il 15,540 -I ~

Fine Arts Productions 27,124 80,000 107,124 ~ 6,730 19,964 69,884 10,546 107,124Wa~erN. Marks Center 114,969 114,969 I! 64,416 8,570 40,323 1,660 114,969Communication Division 6,209 6 209 ~ 6,209 6,209, ,3 .ABE Workforce Investment Act 212,015 212,015 \'i 158,991 . 22,524 30,500 212,015Adult Basic Education - tests 23,685 30,000

gj26,750 3,200 11,200 12,535 - 53,68553,685 ;.

Economic DeveloplCommunity Education ,Balance 4,988 4,988 ~ 70 8,175 1,043 600 (4,900) 4,988

CTD Grants 92,338 38,870f.l

86,406 2,342 20,780 9,039 12,641 131,208131,208 ~. Tech-Prep 56,000 56,000 ~ 50,258 1,200 4,542 56,000

" 10,000Chancellor's Office 10,000 10,000 ~ 10,000 -~Riverside Minin Grant 5,110 5,110 ~ 5,110 5,110Econ, Dev. Adv. Transp.Tech. 172,500 172,500 ij 145,606 1,000 17,759 1,500 5,635 172,500

~.~Econ. Dev. Adv. Transp.Tech. (11,401) 205,000 193,599 ~ 183,648 3,865 4,862 1.224 193,599

Contract Education~

31.623 54.364(120,006) 159.340 39.334 ~ 5.667 (52,320) 39,334

Community Education 20,012 137,6Z7 ~ 87,320 5,919 44,388 20,012 157,639157.639 !~

TOTAL FUND 12 ~0101 1,582,631 9,547,604~;l

5.134.537 729,022 3.260.36011,130,235 ffi 673,719 1,178,576 10,976,214 154,021W31,~~~i

FUND 12 ~0102 - STATE EQUIPMENT ~'{'r.~~

State Income 295,506 95,973 392,479 ;1 160,163 135,343 96,973 392,479~1'"';\

FUND 12....::Oj03 - RESTRICTED~NATIQNS~'j

Donations for Student Employmt.iH

138,000 138,000 ~ 138,000 - 138,000

(q-,FUND 12 - 0104 - DONATIONS - Foundation ij

~~

Donations 387.307 92,000 479,307 ~ 139,787 18,506 316,014 5,000 479.307~J

FUND 12 - 0105 - PARKING FEES~~@'l:

Parking Permit Revenue 24.219~1 294,318 30,580 12,455 367,353343,134 367,353 Q 30,000

~FUND 12 - 0106 - RESTRICTED LOTTERY ~~

~,,~,..

Lottery Revenue - Restricted~;l

62.1,~i52 166,000 7a7,352 ill 428,025 359,327 787,352

FUND 12 - 0107 - STUDENT HEALTH FEES~~f"t,"

Student Health Fees 478,~141 350,000~j

360.629 10,000 122,750 20,000 315,562 828,941828,941 t$.t~;1

FUND 12 - 0108 - WORK STUDY ;~<\i~

Federal Income~ 117,485 117,485117,485 117,485f,!

tt<I

FUND 12 ~0330 - CHILD DEVELOPMENT i~Wi~

Child Development - Restricted~ 133,015- 133,015 133,015 ~ 82,000 15,015 36,000»\~

FUND 12 ~0700 - ARRA ~Class Size Training-ARRA

li.l220',861701,414 701 ,414 ~ 89,500 351.441 6,930 32,682 701,414

CEWTP-ARRA 602,596 602,596 ~ 98,942 32,759 335,541 117,688 17,666 602,596~SO AQMD-ARRA 75,000 15,000 ~ - - 52,755 22,245 75,000

~~TOTAL FUND 12 'l1'

3,389,956 12,363,221 15,753,177 !l 6;586,559 1,513,570 4,981,986 950.310 1,566,731 - 15,599.156 154,021

'"~

FUND 21 ~Bond Interest and Redemption Fund I!il

t~r.oiil

Local Income 21,749,280 14,246,756 35.996,036 ~ 35,996,036 - 35,996,036~~I"~~

FUND 33 - CHILD DEVELOPMENT FUNDS ~~160;286

~~~

Grantsili

1,031,466 ~li~

Other 50,150 1,241.902 ~ 854,955 94.088 53,752 62,000 117,107 1,241,902

~'"~tlFUND41-CAPITALOUTLAY "f:

251,342,027 IState Revenue. Interest 6,837,000

Local Revenue 7,457,000 265.636.027~ 366,923 195,553 4,183,479 230,890,072 30,000,000 265,636,027. ~

FUND 61 - INSURANCE RESERVE §

~696.219 ~ 696,219 696.219696.219 ~

FUND 69 - RETIREE LIABILITY RESERVE~~~¥J 4,694,746 130.000 5,439.746.4.135,452 704.294 5,439,746 t1' 615.000 -r,Jo~,

FUND 72 - STUDENT REPRESENTATION FEE !t~i

40,919 18,000 58 919 ~l 4,000 49,919 5,000 58.9191 ~~

?-1~;~i:

FUND 73 - STUDENT CENTER FEE TRUST FUND ~it

11.891 23,000 34.891 Iis1,. 25.507 5.112 4,272 34.891

TOTAL RESTRICTED FUNDS 282,126.030 42,730,887 324.856.917 ~ 154.0218.448,944 1,812.323 9,969.627 231,907.382 72.434.620 130,000 324,702,896

COLLEGE OF THE DESERTFIVE·YEAR PRO FORMA BUDGET STATEMENT· FY2010/11 THRU FY2014/15

1 Projected Revenue Increases $

$$

2 Projected Cost DriversStructural Budget Deficit (from past years)

Total Cost Drivers $::'::::~:-;::;::".::;,::.:; ::~.'; .::::~~:::,-_:.

2,938, 736 :l~~!~Ci)2:;99~~a91iJW$:ai'2;'Ml:iG9:K~;4 Projected Shortfall

5 Possible Closing Fund Balance

$

$

6 ACTION PLANS (revenue increases and cost reductions)Trustees (FY09/10 $25,000) $Leadership

Compensation adjustment (FY09/10 $52,000) $Strategic downsizing (FY09/10 $183,000) $Academic reorganization $

ClassifiedCompensation adjustment $

10 FacultyClass Reductions (FY09/10 $100,000)Compensation adjustment

$$

11 BenefitsCost escalation avoidance, all employees $ $

12 SERP, no projected savings $

13 Adjunct FacultyFurther class reductions (FY09/10 $700,000) $Holding Account (FY09/10 $200,000) $

14 Operations efficiencies (FY09110 $849,896) $

15 Projected mid-year funding cut (FY09/10 $821,438) $

16 Non rerecurring impact of 2011/ Summer Session $

17 Cost Increases ICategorical backfill (FY09/10 !~<239,OOO>) $Summer bridge (FY09/10 $<90,QOO>) $.....:....-------'

18 Total Net Savings from Action Plans

19 Projected Closing Fund Balance

$

Version 3/10-14-10

BUDGETSUB-COMMITTEEFYI0/11 BUDGETINFORMATION

12/6/2010

Agenda Item #2. Review of FY2010/11 Funding News and Discussion of the impact on the FY2010/U Budget

2.1. Base Revenue

Confirmed State Budget Assumption VarianceFunding (CSF) (BA) +ve or (-vel

$37,563,328 $37,231,591 $331,737

2.2. Growth

CSF BA Variance

$864,364 $814,000 $50,364

2.3. Categoricals and Restricted

CSF BA Variance

EOPS $275,864 $289,037 -$13,173CARE 52,843 52,843 0DSPS 377,973 498,493 -120,520TANF/GAIN 22,501 54,988 -32,487CalWorks 149,753 118,079 31,674Fee Waiver 41,317 15,155 26,162Credit Matriculation 229,241 231,601 -2,360Non-Credit Matriculation 94,547 94,545 2Faculty/Staff Diversity 5,575 14,352 -8,777

Part-Time Faculty Equityl 171,674 172,000 -326Basic Skills 299,139 * 300,000 -861Nursing Tech Growth 260,687 260,687 0Financial Aid Admin 272,831 280,687 -7,856

$2,253,945 $2,382,467 -$128,522State Backfill 0 233,000 -233,000

$2,253,945 $2,615,467 -$361,522

*Predicted to be cut rni -year by 5% or $14,957.llncluded in General Fud

1

2.4 One-Time Funds

CSF BA Variance

No details of reduction -$11,274 $0 -$11,274

2.5 Mandates

~ BA Variance

Unrelated to claims $159,275 $0 $159,275

2.6 Funding Deferrals

Within FY2010/11: $1,314,754

From FY2010/11 to FY2011/12: $3,646,250

Agenda Item #3. Possible FY2010!11 Mid-Year Funding Cuts

Most Vulnerable:

Growth:Mandates:

$864,364159,275

$1,023,639

Other Possibilities:

Categorical FundingBase Funding

2