AGENDA ITEM BACKGROUND
TO: GOVERNING BOARD
DATE
FROM: PRESIDENT
February 7, 2011
SUBJECT:
2010-11 and 2011-12 Budget Planning Parameters Update
REASON FOR BOARD CONSIDERATION
ENCLOSURE(S)
Page 1 of 10
ITEM NUMBER
E.3
INFORMATION
BACKGROUND:
The Governing Board received a budget update on November 1, 2010 that included budget planning
assumptions based on the 2010-11 state budget enacted on October 8, 2010. The college developed
planning assumptions in November that included mid-year reductions for 2010-11 and no further
revenue reductions in 2011-12.
The new governor’s January budget was released on January 10, 2011. The budget proposal includes
the balance of the 2010-11 fiscal year and 2011-12. The two-year budget shortfall is projected at $25.4
billion; $8.2 billion for 2010-11 and $17.2 billion for 2011-12. The shortfall could increase by another
$1.2 billion if a sale of state-owned real estate is abandoned. The governor’s budget is considered the
best case scenario. It is also important to note that the governor’s budget is built on the assumption that
voters will approve $12 billion in revenue extensions during a June, 2011 election. If tax extensions
don’t make it on the June ballot or fail, the reductions listed below will increase.
Highlights of the governor’s budget include:
 $12.5 billion in spending reductions
 $12 billion in revenue extensions
 $1.9 billion in other solutions
 Establishment of a $1 billion reserve.
Spending reductions for community colleges include:
 No 2010-11 mid-year cuts
 $400 million cut to community colleges; approximately $4 million for Cabrillo
 Student fee increase of $10 per credit unit bringing enrollment fees to $36 per credit unit
 $110 million increase in enrollment fee revenue generated by the $10 fee increase would be used
to backfill apportionment reductions; approximately $1.1 million for Cabrillo
 An additional $129 million inter-year funding deferral bringing inter-year deferrals to $961
million; approximately $9.6 million for Cabrillo.
 No further reductions to categorical programs
 Categorical flexibility provisions adopted as part of the 2009-10 state budget would be extended
for two additional years, through 2014-15.
 Maintains full funding for the Cal Grant program
Administrator Initiating Item:
Victoria Lewis
Academic and Professional Matter
If yes, Faculty Senate Agreement
Senate President Signature
 Yes  No
 Yes  No
Final Disposition
The 2011-12 budget cycle will mark the fifth year that the college has reduced the base operating
budget. Ongoing reductions to date total $5.6 million or approximately 10% of the budget.
The College Planning Council received all state budget updates via email from the California
Community Colleges Chancellor’s Office and the Community College League of California over the
winter break.
The college’s budget planning information has been updated to reflect information contained in the
governor’s January proposal.
The following attachments were reviewed by the college planning council on January 26, 2011 and are
included for the Governing Board’s information:





2010-11 Projected Year End Fund Balance
Updated 2010-11 and 2011-12 Base Budget Planning Assumptions
An updated estimate of Cabrillo Operating Reserves—including the projected ending base
budget balance for 2010-11 and 2011-12.
Updated Base Budget Planning Parameters for 2010-11 through 2013-14
Updated Budget Development Timeline
The college has developed a best, mid-range and worst case scenario for the 2011-12 budget cycle. The
California Community College League has developed three budget scenarios for the college. The
college’s planning documents mirror the League’s planning information (see attachment on page 111).
The college has significant operating reserves that will help provide planning time for the college to
make the next round of significant budget reductions. There are concerns about the reduction of funded
enrollment and the subsequent reduction of courses offered at the college. Fiscal stability and student
success are of the utmost importance to all constituents of the college community.
The Governing Board will provide clear direction on the total amount of reserves that will be used to
bridge the 2011-12 budget shortfall. The Governing Board will also identify other uses of the operating
reserves.
The college began formulating budget reduction plans in the fall of 2010. The College Planning Council
and the Governing Board agreed to hold off on releasing reduction plans until the governor’s January
budget was released. Now that the governor’s budget has been released, the college will develop
reduction plans for the best, mid-range and worst case scenarios.
Budget Town Hall meetings will be held on campus on Friday, February 4. The Governing Board has
tentatively planned a Board Budget Study Session on February 14.
Budget planning documents will go back to the Governing Board at the March meeting for action.
Staff/service reductions not requiring a March 15 notice may occur at a later date.
CABRILLO COLLEGE
GENERAL FUND
FY 2010-11 PROJECTED YEAR END FUND BALANCE
CPC Jan. 26, 2011
I. BASE BUDGET 2010-11
PROJECTED CHANGE TO FUND BALANCE
Revenue
Expenses
Projected F11 Increase/(Decrease) to Fund Balance
FY 2010-11
Final Budget
59,783,172
61,668,990
(1,885,818)
Projected Year End
Actual
61,714,000
58,918,000
2,796,000
II. BASE BUDGET 2010-11
ANALYSIS OF PROJECTED YEAR END FUND BALANCE
Projected CarryOver
Allocated Increase to Fund Balance
Supply Accounts
CCFT Negotiated Faculty Conf Accts
Criminal Justice In-Service Agency Funds
SIE Equipment Funds
Other Special Requests Authorized by Each Component
213,000
27,000
290,000
576,000
690,000
Total Allocated Increase to Fund Balance
1,796,000
Total Unallocated Increase to Fund Balance
1,000,000
III. GENERAL FUND BALANCE
GENERAL FUND PROJECTED ENDING FUND BALANCE
Fund
11
12
13
14
15
17
18
19
Genl Unrestricted
Genl Restricted
District Match
Carry-Over
Community Ed
One-Time
Backfill
Categorical Charge
Total
Beginning
Fund Balance
3,209,000
1,119,666
641,425
3,599,048
451,114
5,992,792
15,013,045
Projected
Revenue
61,714,172
11,579,134
323,141
970,786
7,076
-
Projected
Expense
58,918,000
11,974,404
641,425
801,779
774,888
326,172
-
Net
Change
2,796,172
(395,270)
(641,425)
(478,638)
195,898
(319,096)
Re-Classification
Change to Fund Balance
(2,796,000)
1,796,000
1,000,000
(0)
Projected
Ending Fund Balance
3,209,000
724,000
4,916,000
647,000
6,700,000
16,196,000
CPC January 26, 2011
I. 2011 Base Budget Planning Assumptions
2010-11 Final Budget Structural Deficit
Range
Worst
Case
MidRange
Best
Case
(1,886,000)
(1,886,000)
(1,886,000)
1,300,000
1,300,000
1,300,000
216,000
2010-11 Revenue Adjustments- January State Budget
A. Reverse 66.4% of the 2009-10 FTES Reduction (formerly classed
as 2.21%growth)
B. Remove Negative COLA
216,000
216,000
C. Deficit Factor State Property Tax Shortfall@ $15 million
(300,000)
(150,000)
0
D. Adjust General Apportionment Shortfall
465,000
465,000
465,000
0
100,000
100,000
(8,997,000)
(6,184,000)
(3,990,000)
1,097,000
1,097,000
1,097,000
?
?
?
?
?
?
(8,105,000)
(5,042,000)
(2,698,000)
Full-time Faculty Obligation -Fall 2011 (205.6) (6 budgeted/unfilled funded)
0
(270,000)
(360,000)
(Faculty step 5/5, with benefits $90,000)-reduce funded 0, 3, 4
Adjunct Replacement Units- 30 units per FT position @ $1750 per unit
0
0
(3)
157,500
(4)
210,000
Classified positions
0
0
0
0
0
0
66,000
66,000
66,000
E. Part-time Faculty Compensation
2011-12 Revenue Assumptions
A. General Apportionment Red.- $8.99 mil, $6.184 mil, $3.99 mil
B. Increase in Student Fees $110 mil.-to offset apportionment
reduction
C. Deficit Factor Student Fee Revenue Shortfall
Other
TOTAL Revenue Adjustment
2011-12
Management positions
Benefits
Increase in Transfer to Retiree Benefit Fund
Increase in Transfer for future retiree liability (new employees,etc.)
?
?
?
935,000
825,000
715,000
PERS employer rate increase for 2011-12 (rates continue to
increase in subsequent years - 3.24%).
STRS rate increase
Increase in Worker's Comp., Gen. Liability,
17%
400,000
3.24%
0
85,000
15%
400,000
3.24%
0
80,000
13%
400,000
3.24%
0
75,000
Step and Column Increases (includes longevity, shift diff.)
395,000
395,000
395,000
2011-12 Medical benefit increase
Labor Agreements
?
?
?
New Facilities Supplies & Operating Staff
0
0
0
(100,000)
(100,000)
(100,000)
District Contribution- Bus Pass Program
Operating Costs: Supply budget increases for COLA
0
0
0
53 and 54 object classifications
0.00%
0.00%
0.00%
Operating Costs:
Other net operating increases
200,000
150,000
100,000
Total Expense Adjustments
Projected 2011-12 Structural Balance (Deficit)
1,981,000
1,703,500
1,501,000
(10,086,000)
(6,745,500)
(4,199,000)
Bridge Fund Reserves
4,000,000
4,000,000
4,000,000
Net Reduction Target for 2011-12
(6,086,000)
(2,745,500)
(199,000)
CPC January, 2011
Cabrillo Operating Reserves
Mid Year- Bridge Fund Reserves Final Budget
(see page 21 of the 2010-11 Final Budget)
4,385,818
One-Time Available Funds (unallocated one-time)
414,000
Other One-time funds (state mandates, etc)
238,000
2010-11 Projected Base Budget Unallocated Ending Balance
1,000,000
Projected Balance as of 6/30/11
6,037,818
Increase FTES Reserve in 2011-12 (see below)
(500,000)
2011-12 Projected Base Budget Unallocated Ending Balance
1,000,000
Subtotal*
*Allocation of reserves for critical needs, bridge funds for 2011-12
FTES Reserve
FTES Reserve as of 6/30/10
FTES Reduction expected in 2011-12
Use FTES Reserve to Bridge ($500,000 = 285 Tus/FTES)
Increase FTES reserve to bridge FTES funding reductions
Total available for 2011-12 and 2012-13
* Does not include 5% General Reserve
$6,537,818
?
500,000
500,000
$1,000,000
Budget Planning
Governor's January Budget
CPC January 26, 2011
Difference between ongoing Revenues &
Expenses (Structural Deficit)
Increase in State Revenue Anticipated
Property Tax Shortfall
1/2 of 2.21% Growth in Governor's Budget
Negative .39% COLA Restored
General Apportionment adjustmnet
Part-time faculty compensation
Gen. Apportionment reduction- $8.99 mil, $6.184
mil, 3.99 mil
Increase in Student Fees $110 mil to offset
apportionment reduction
Net change in revenue
2010-11 through 2013-14
Base Budget
Planning Parameters
2010-11
Budget Update
2011-12 Preliminary Budget
Mid-Range Scenario
2012-13
Projected
2013-14
Projected
(1,886,000)
45,000
(6,745,500)
(8,790,500)
0
0
(150,000)
(425,000)
(112,500)
(450,000)
(150,000)
1,300,000
216,000
465,000
100,000
(6,184,000)
1,931,000
Net Increases in Ongoing Expenses
Full-time Faculty Position changes (-3, +4, +3) (net of adjunct backfill)
Step, Column, Longevity Increases, etc.
Classified Positions
Medical Plan Rate Increase--15%
Management Positions
Retiree Benefit Increase
PERS Rate Increase
STRS Rate Increas
Worker's Comp, Unemployment Insurance
New Facilities Supplies & Operating, Staff
Utilities
Net Operating Increases
District Contribution- Bus Pass Program
Retiree Benefits- New Employees
Labor agreements
Total Expenditure Increases
Budget Reductions
Ongoing Shortfall*
Bridge Fund Reserve
Deficit net of One-time funds
*Estimates will change as more information becomes available
45,000
1,097,000
(5,087,000)
112,500
(395,000)
0
(825,000)
0
(66,000)
(400,000)
0
(80,000)
0
0
(150,000)
100,000
?
?
(1,703,500)
(725,000)
?
(50,000)
(395,000)
?
?
?
(100,000)
(200,000)
(750,000)
?
(100,000)
(175,000)
?
?
?
(100,000)
(225,000)
?
?
(2,045,000)
?
?
(1,912,500)
?
?
?
(6,745,500)
(8,790,500)
(10,703,000)
CABRILLO COLLEGE
Budget Development Timeline Draft
FY 2011-12
Revised Jan 24, 2011
September 7-8, 2010
September 13, 2010
September 14-15, 2010
September 15-16, 2010
October 4, 2010
October 5-6, 2010
November 1, 2010
November 2-3, 2010
November 15, 2010
November 17, 2010
December 7-8, 2010
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/
CPC MEETING
- 2010-11 Final Budget
- Budget Planning Update For 2011-2014
BOARD MEETING
Action Items:
- 2010-11 Final Budget
Information Items:
- Budget Presenation on FY 2010-11 Final Budget
- Budget Planning Update for 2011-2014
- Budget Planning Parameters
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/CPC MEETING
HEALTH BENEFIT FORUMS
BOARD MEETING
Information Items:
- 2010-11 & 2011-12 Budget Update
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/CPC MEETINGS
Information Items:
- Budget Reduction Goals (Base, Categorical Budgets & Other funds)
- Budget Reduction Process Commitments, Criteria and Strategies
- Budget Development Timeline
- Budget Reduction Timeline (Base, Categorical Budgets & Other funds)
- FTES Projections for FY 2010-11
BOARD MEETING
Information Items:
- Budget Reduction Goals
- Budget Reduction Process Commitments,
Criteria and Strategies
- Budget Development Timeline
- Budget Reduction Timeline (Base, Categorical Budgets & Other funds)
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/
CPC MEETING
- Review Budget Reduction Recommendations (Base, Categorical Budgets & Other funds)
BOARD BUDGET STUDY SESSION
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/
CPC MEETING
- Review Budget Reduction Recommendations (Base, Categorical Budgets & Other funds)
- Budget Town Hall Meeting
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/
CPC MEETING
CABRILLO COLLEGE
Budget Development Timeline Draft
FY 2011-12
Revised Jan 24, 2011
January 10, 2011
January, 2011
February 4, 2011
February 7, 2011
February 14, 2011
February/March, 2011
March 7, 2011
April, 2011
April 11, 2011
May 2, 2011
June 13, 2011
2011-12 GOVERNOR'S STATE BUDGET
STATE BUDGET WORKSHOP
- Budget Town Hall Meetings (10:30-12:00; 2:00-3:30)
BOARD MEETING
Action Items:
- Budget Reduction Process Commitments,
Criteria and Strategies
Information Items:
- Budget Development Timeline
- FY 2010-11 Mid Year Report (Projected Ending Balance)
- FY 2010-11 and FY 2011-12 Budget Update
- Update Budget Parameters FY 2010-11 and FY 2011-12
- Governing Board provides direction on the use of one-time operating reserves
Tentative- BOARD BUDGET STUDY SESSION (4:00-6:00)
- First Principal Apportionment 2010-11
- Develop 2011-12 Budget Reduction plans- all funds
- Negotiations- All Groups
BOARD MEETING
- Reduction or Discontinuance of Services
- Additional staff/service reductions not requiring a March 15 notice may occur at a later date
Action Items:
- Budget Development Timeline
- FY 2010-11 Mid Year Report (Projected Ending Balance)
- FY 2010-11 and FY 2011-12 Budget Update
- Update Budget Parameters FY 2010-11 and FY 2011-12
Continue to Evaluate/Revise Planning Parameters
BOARD MEETING
Information Items:
- Budget Reduction Recommendations (Base, Categorical Budgets & Other funds)
FY 2011-12
May Revise
BOARD MEETING
Action Items:
- Final Notices to Faculty- Reduction or Discontinuance of Services, update on other personnel
reductions
- Budget Reduction Recommendations (Base, Categorical Budgets & Other funds)
FY 2011-12
BOARD MEETING
Action Items:
- 2011-12 Preliminary Budget