COLLEGE PLANNING COUNCIL
MINUTES
Wednesday, December 1, 2010
PRESENT: Mikki Adams, Diane Goody, Paul Harvell, Steve Hodges, Renée Kilmer,
Brian King, Victoria Lewis, Barbara Schultz Perez, Graciano Mendoza,
Letitia Scott-Curtis, Stephanie Stainback, and Kathie Welch
ABSENT:
Chris Peeden and Dan Rothwell
VISITORS:
Debora Bone, Nancy Brown, Sesario Escoto, Kristin Fabos, Rick Fillman,
Wanda Garner, Massina Hunnicutt, Loree McCawley, Rory O’Brian, Rock
Pfotenhauer, Margery Regalado Rodriguez, Georg Romero, Jim Weckler
1.0
Call to Order and Introduction of Substitutes
Brian called the meeting to order at 2:05 pm.
2.0
Review of Agenda
Brian reviewed the agenda.
3.0
Approval of Minutes
The minutes of November 15 were approved as with two changes.
4.0
Oral Communications
None.
5.0
Management Dialog
None
6.0
Budget Discussion
Brian asked CPC members and guests to discuss their thoughts on the budget
and next steps.
Following are the meeting attendee’s comments:
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Our next step might need to be to go backwards, dig in, and looking at the
variances. We should identify what really should be a target, if any, at this time.
It is clear that we all have the same goal; we want Cabrillo to be strong fiscally
and continue to provide quality education. It seems like the big thing we have to
consider is our one time funds, we have had a history bridging cuts with these
funds, our revenues are flat and our expenses are going up. Even if we continue
to bridge what happens when the bridge money is gone and our structural deficit
is bigger? Carryover in the supply budgets is sitting there and there are
programs with equipment that cost a lot of money, programs may need the funds
to replace certain equipment or the whole program stops. The most important
thing is that we have a meaningful dialog.
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CPC needs to go backwards on the process. We need to look at variances and
see if we can tighten them up to eliminate the structural deficit. We need to
agree on a target in public and in private. We go through some prioritization
process before we eliminate positions. It needs to be a thoughtful process that
reflects some input. I really would like to see us come to an agreement before
we take reductions (other than operational) to the Board in January.
We really need to come up with a goal that we can live with. We have relied on
one time bridge funds, but in the long term that may not be the best strategy.
Cash flow is an issue. We need to have money to make payroll.
It is important that there is clarity and people understand the process. I am
deeply concerned about the integrity of the faculty and how we move forward.
We need to look at the process. We are not on the same page with the target
goal. There are historical planning parameters that have served Cabrillo well. It
was really safe and it led to the “slush fund” of bridge monies. The terms of the
planning are worth looking at. We are in the fourth year of deep cuts. Now we
want to look at the savings for this year and how that might impact this year and
not a couple of years later. I have concerns in the way in which we have lost
classified.
We have all watched people we know struggle with personal finances. They
didn’t have savings to bridge their financial crises. I do not want that to happen
to us. Having savings is important because if there is a crisis we will have the
cash. Using all the bridge funds scares me to death.
Budget planning is strongest when everyone is part of the process and everyone
buys into it. Looking into the current state of the budget there are several places
where I look and say that is not the best number. The number is not accurate.
There are many places where the number is not what I would expect and I do not
know why it is different. It is wrong to set a target when there are too many
question marks.
The idea of a target is fundamentally wrong. Saying there is a target and we
have to meet it says the budget is an actual representation of what we are doing.
The question is what is going to make Cabrillo fundamentally sound? Taking
$1.2m in cuts does not seem sound. We need to make sure we can deal with a
wide range of possibilities that may come from the state. Instead of talking about
the target we need to look at what we are actually spending, what is likely to
change, and where that will leave us.
We need to face reality. The state budget is not going to improve for a really
long time; we need to think about bringing our expenses down and other ways to
generate revenue. We need to think about how to invest to diversify our funding
sources.
Apple had to lay off 17 percent of their employees, because they went three
years in a row without addressing their budget issues. I am troubled by the
variance and the perception of the variance.
We are here for a shared purpose. What is hard is there is so much uncertainty.
We have tried to manage the uncertainty. To take draconian measures because
of the uncertainty can push us even further under. We need to wait for more
certainty. We know that whenever we freeze hiring we have positions on the
books that provide money that have sustained us. Could we actually move
towards laying off people to protect ghost positions?
CPC Minutes
December 1, 2010
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There are too many variableS, but I am concerned about waiting to see what
happens at the state level. I have been in districts where there has not been
enough planning and it is devastating. We need to move forward.
At the state level, things are going to get a lot worse before they get better and
that is really concerning. It is a matter of striking a balance between having a
rainy day fund and preserving people.
We have to pull the band aid off. We have been doing our jobs with limited
resources and we always knew we would have to make big cuts and that time
has come.
I am concerned about cash flow and payroll. In terms of process everyone has a
different way of looking at the issue, so it is complicated. I am worried about the
push/pull pushing us down the road until we have no control.
I am worried about the lack of progress towards a group mind. Seeing that tends
to be very worrisome. We really should get moving on multiple tracks. We need
to make sure that whatever we are doing is sustainable or we come up with
something that is sustainable.
We need to discuss the curve of the increase in our expenditures. We need to
take a look at the open positions. That is what will provide clarity.
We need to take a broader view and think about the future of the college and
what is necessary to make sure we are sustainable in future years. There will
always be unknowns. We need to review our expenses and revenues and how
we can become more balanced. How do we stop the movement of the curve? I
am concerned about the “ghost position” discussion. I encourage Cabinet to
have a hard discussion about what positions can be sacrificed and which ones
are too valuable to take back. Cabinet needs to come back with a plan for filling
the valuable positions. The broader campus doesn’t hear these discussions and
the units with vacancies they are getting restless. I am also concerned that we
need $5m every month to make payroll and that we don’t have enough base
reserves to make payroll.
The next step is to find out what is going to happen at the state level.
We have to make hard decisions about expenses so there is a rainy day fund.
We have been bridging a lot instead of making difficult decisions.
Around the planning parameters in terms of planning assumptions there are a
couple of lines that have question marks, some of those things you can plan
around. With some additional effort we should fill out those lines to come up with
a number we can all get our arms around.
Everyone knows it is going to get worse. The disagreement is about where we
are at now. We are more than $1m apart.
Variances are seen as items where the budget is different from the expenditure
for numerous reasons. We need to delve into that it and identify what can go
way. It is more about the decision making and not about accounting errors.
It would be very helpful to actually discuss significant variances and what they
are. That would be a significant trust building exercise.
If we are not coalescing in some way how do we get around that?
CPC then discussed the variance. There was a question about what is a normal
variance. Victoria said Cabrillo’s history is about $700 - $1m on for average year.
There is not a standard. It depends on an institution and the fiscal environment.
CPC Minutes
December 1, 2010
Cabrillo’s standard should be 5 percent and our actual is 1 to 1.5 percent. That is
actually pretty low when you consider the size of our payroll.
Paul requested more information on the deferred maintenance actual costs. How much
is the college going to have to spend? Paul said need to look at actual costs; analogies
about potholes in the road are excuses and not reality.
CPC then discussed the vacant positions. Victoria provided a handout showing the
current (as of December 1, 2010) vacant classified positions.
Victoria explained that backfilling is when a temporary person has been hired to fill a
gap.
Stephanie asked if the amount includes benefits and Victoria said yes. Stephanie said
she understands that the average classified person costs the college about $79k.
Victoria responded that while $79k is the average for a current classified employee, the
spreadsheet represents actual numbers for those particular open positions. The
numbers on the spreadsheet are not averages. Stephanie said she wants to make the
point that she is questioning the classified average of $79k.
Victoria then discussed the open faculty positions. Paul said we are starting to
understand the variance and the open faculty and classified positions do not even
represent half. There is still a lot more to the variance.
CPC asked for a list of open management positions.
Brian closed the meeting by asking if there are any specific observations about the
numbers.
Stephanie said salary savings is still low and we should adjust it to reflect a real
number.
Barbara asked for more information on capital outlay. Stephanie added that capital
outlay has risen from 1 percent to 5 percent of Cabrillo’s budget
10.0
Adjournment
The meeting was adjourned at 3:52 pm.
CPC Minutes
December 1, 2010