BPC Budget Update @ January 23, 2015 – January Governor’s Budget
For information only. The information in this represents our best information at this time. The State
Budget is subject to change, and nothing is settled until the Chancellor’s Office provides apportionment and other allocations to districts. The reality is that the first time the District will see the budget broken out by community college district will be late Summer 2015, about six months from now.
Dollar amounts have been rounded to thousands for this document. Starting with the Expected Case forecast for 2014-15, the following adjustments have been made to create a 2015-16 forecast:
ENROLLMENTS:
During 2014-15 the District will record “flexible” enrollments for Summer 2014 and Summer 2015. The plan is to only report Fall and Spring and “non-flexible” summer enrollments in 2015-16 which will result in the District going on enrollment stability. Therefore, we expect enrollment funding at 3954 FTES which is the expected case for 2014-15.
Enrollment Estimate
FTES Enrollments
2014-15
3954
2015-16 (Stability)
3954
REVENUE:
Revenue has been increased as follows:
1.
Enrollment revenue has been adjusted upward by 1.58% or $366,000 for the proposed cost of living adjustment (COLA).
2.
Also, revenue is increased by $425,000 for the proposed base budget increase. The $425,000 estimate is based on CR’s share of FTES as a percentage of the total FTES for the system. If the base funding were allocated on the basis of CR’s share of basic funding (district funding, center funding, and rural funding), then CR’s share could be as high as $1.2 million. Since the CO has not provided a final answer on how these funds will be allocated, we are using the lower
$425,000 for now, until the CO provides a different number.
3.
$93,000 has been added to revenue to account for a change in funding for certain non-credit courses. CDCP or “stackable” courses were reimbursed at a reduced apportionment, but starting in 2015-16 will be reimbursed at the same apportionment rate as for-credit courses.
4.
$36,000 has been added for increased non-resident revenue.
Revenue Estimate 2014-15 2015-16 Increase Percent
Total Revenue $25,730,000
EXPENDITURES:
Expenditures have been adjusted as follows:
$26,651,000 $920,000 3.6%
5.
Academic salaries include full-time faculty, associate faculty and administrators. Academic salaries were increased by $152,000 based for the estimated cost to increase by one step, based on an analysis of the employee position inventory and the associate faculty budget. Academic salaries were reduced by $260,000 to account for positions transferred to categorical funding.
Therefore, this category is actually lower for 2015-16.
6.
Other staff salaries include classified, confidential and managers. Other staff salaries were increased by $103,000 to account for the estimated cost of a step, based on an analysis of the employee position inventory.

BPC Budget Update @ January 23, 2015 – January Governor’s Budget
7.
In benefits, District-paid STRS increased by $184,000 which includes the new higher STRS rate plus the STRS costs for the salary step increase. District-paid PERS increased by $24,000, and
District-paid health and welfare costs are estimated to increase by $150,000. Benefit costs were reduced by $116,000 to account for the benefit costs moved to categorical funding.
8.
Supplies budgets were increased by 2% or $9,000. Services budgets were increased by 2% or
$64,000, and the general fund capital outlay budget was increased by 10% or $29,000.
Expenditure Estimate
Total Expenditure
2014-15
$25,753,000
2015-16
$26,093,000
Increase
$340,000
Percent
1.3%
OTHER SOURCES/(USES):
1.
No transfers in were budgeted in 2014-15 and none are budgeted for 2015-16.
2.
Transfer out consist of transfers of financial support to Shively Farm, Child Development Center, a scheduled transfer to the Employee Benefits Fund and any required payment to the debt service fund. Transfers out were budgeted to increase by 2% or $9,000.
3.
Student financial aid is comprised of the tuition waivers provided to concurrent enrolled high school students which only partially offsets each student’s bill. Students must apply for a BOG fee waiver. The budget is increased by 2% or less than $1,000.
2014-15 2015-16 Increase Percent Other Sources/(Uses)
Estimate
Total Other
Sources/(Uses)
$477,000 $487,000 $10,000 2.0%
ONE TIME SAVINGS:
One-time savings arise from employee positions that are vacant for some time during the year and from services and supplies budgets that are not fully spent down by year-end. For example, in the Maintenance
Dept. there is a wastewater treatment operator position that has been vacant for all of 2014-15, despite actively searching for a replacement. Other position savings arise for example when an individual retires, but their position is vacant for a few months until a replacement is located. This figure is determined by examining individual vacant positions in the position inventory to estimate the savings. For 2015-16,
$758,000 in temporary savings is estimated. This is based on the vacant position savings and unspent services and supplies budgets in the 2014-15 budget.
While $758,000 is estimated for 2015-16, it is likely that as positions fill, this level of vacancy savings will not continue year-over-year. It is administration’s recommendation that perhaps, $558,000 of this savings could be expected to continue to recur for multiple years. The level of recurring vacancy savings is difficult to predict with much accuracy over multiple years. The reality is that administration must review the position savings each year to estimate savings for the next year or so as these items can rise and fall for many reasons.
NET REVENUE AND FUND BALANCE AND BPC RECOMMENDATIONS:
1.
The BPC is asked to provide a recommendation to the President/Superintendent on this budget forecast.
2.
For 2014-15 the expected case estimates the ending fund balance at $2,332,000 or 9.44%. Using that same 9.44% figure for the ending fund balance for 2015-16 would yield net revenue of

BPC Budget Update @ January 23, 2015 – January Governor’s Budget
$724,000. In line with the principles of shared governance and the Committee’s charge, the BPC is being asked to provide the President/Superintendent with a recommendation on this budget forecast. Of note, Board Policy provides that each year’s budget must increase the fund balance by at least a small amount until the fund balance reaches 10%. Therefore, recommending that a portion of the $724,000 be set aside to grow the fund balance should be included in the
Committee’s recommendations. Also, the BPC is asked to include a recommendation for the
$200,000 of this net revenue that appears to represent non-recurring funds.
3.
As previously noted, it is possible that the revenue estimate could improve if the Chancellor’s
Office uses an allocation method for the Governor’s proposed base budget augment that is more favorable to Redwoods. The high case might provide $1,200,000 or an additional $775,000. This augment would increase net revenue estimate from $724,000 to $1,499,000. Again, the BPC is asked to provide a recommendation for this level of net revenue and include a recommendation on the $200,000 that appears to be non-recurring.