99
AGENDA ITEM BACKGROUND
TO: GOVERNING BOARD
FROM:
PRESIDENT
DATE
August 6, 2012
SUBJECT:
2012-13 Final Budget Planning Parameters
REASON FOR BOARD CONSIDERATION ITEM NUMBER
C.8
ACTION
ENCLOSURE(S)
Page 1 of 11
BACKGROUND:
The 2012-13 state budget was signed in early July. The California Community College League has updated budget simulations. The League scenario A assumes the November tax proposals pass and scenario B assumes a 7.3% workload reduction if the tax increases do not pass, resulting in a reduction of $3.5 million for Cabrillo. The workload reduction would be permanent. The state enacted budget includes full hold harmless protection from any shortages in RDA- related revenues. If the tax initiative passes, $50 million in restoration/growth funding will be allocated to districts that are able to show an increase in FTES beyond their cap. The best case scenario also includes a reduction of $159.9 million in apportionment deferrals.
Considerable risk remains for funding shortfalls in 2012-13 even if the Governor’s Tax Initiative passes.
Revenue estimates for taxes that would be generated by the passage of the initiative are overly optimistic. The college will plan for mid-year reductions of funding as part of the 2012-13 Final Budget development.
The following attachments were reviewed by the College Planning Council and are included for the
Governing Board’s action:
Budget Update: 2012-13 Enacted Budget
Budget Simulation: Cabrillo CCD
Updated 2012-13 Base Budget Planning Assumptions including best, mid-range and worst-case scenario
Updated Multi-year Base Budget Planning Parameters for 2012-13 through 2015-16
Projected Operating Reserves for 2011-12 and 2012-13
FISCAL IMPACT:
Estimated $4.6 million 2012-13 unrestricted general fund shortfall. The college plans to use $2.6 million of one-time reserves for 2012-13. The base budget reduction target for 2012-13 Final Budget is
$2.0 million. The Final Budget will be submitted to the Governing Board for approval in September.
The college will continue with additional reductions to offset the remaining deficit for 2012-13.
RECOMMENDATION:
It is recommended that the Governing Board approve the 2012-13 through budget planning parameters.
Administrator Initiating Item:
Victoria Lewis
Academic and Professional Matter
If yes, Faculty Senate Agreement
Senate President Signature

Yes

No
 Yes  No
Final Disposition

100
A best, mid and worst case scenario has been developed based on state enacted budget (see page 101).
The college will develop the 2012-13 Final Budget based on the mid-case scenario. The mid-case assumption includes one half of the 7.3% cut based on the tax increases not passing. This scenario assumes the state will identify other revenue solutions that mitigate the impact of the tax increases not passing.
The updated ongoing structural deficit for 2012-13 is currently projected at approximately $4.6 million after the implementation of Phase I through III. One of the major components of the structural deficit is the built in increases in expenses that the college must budget each year. The college is currently in negotiations with all employee groups for concessions for 2012-13. It should be noted that Cabrillo reduced the number of full-time faculty positions in the budget by ten and one half. The reduction of faculty positions has yielded significant savings in the budget to date. The college is planning to utilize $2.6 million in operating funds to bridge the 2012-13 deficit leaving a balance of approximately
$2.0 for 2012-13.
The college has set a budget reduction target of $2.0 million for the 2012-13 Final Budget. The college has begun work on Phase IV reduction plans. Phase IV reduction plans identified to date total just over $1 million. Phase IV reduction plans are included in a separate board item for the Governing
Board’s information.
The updated planning assumptions are presented for Governing Board approval. If the tax initiatives fail, the college will face mid-year cuts.

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1 of 1 http://www.ccleague.net/districtimpact2.php?id=5&printer=y
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Statewide printable version
The reduction simulations assume a dollar reduction in each of credit, noncredit and
CDCP FTES in a proportional manner across the district's offerings. Because noncredit and CDCP are funded at a lower rate, the percentage of FTES reduced is greater. Similar to 2011-12, each district would likely be able to decide the exact blend of its reductions.
The base FTES assumptions are assuming proportional reductions of the 2011-12 workload reduction, as identified in the Chancellor's Office Budget Workshop information. All non-excess local property tax districts are included, as the 2011-12 small district exemption was a one-time policy decision.
2012-13 Base revenue (before reductions)
Number and percent credit FTES
Number and percent noncredit FTES
Number and percent CDCP FTES
$54,088,568
10,518 (98.16%)
197 (1.84%)
0 (0.00%)
Net Apportionment
Change:
Workload reduction percent:
TOTAL FTES
Reduced
Scenario A: Governor's
Budget and Tax Package
$0
Scenario B: Governor's Budget, with Failure of Tax Package
$-3,531,887
0%
0
-7.3%
-778.81
Reduced credit FTES
Reduced noncredit FTES
Reduced noncredit CDCP FTES
-764.63
-14.18
0.00
6/20/2012 1:37 PM

08/06/12 Board
2012-13 Base Budget Planning (Best, Mid, Worst Case)
2011-12 Structural Deficit
Worst
Range
MidBest
Case Range Case
(4,233,200) (4,233,200) (4,233,200)
2012-13 Revenue Adjustment
2012-13 Reductions in revenue
A. November Tax Proposal (passes/ fails (assumes state identifies some other solutions)
B. Restoration/Growth (if tax initiative passes and is earned)
C. Property tax shortfall
D. Student Fee Revenue Shortfall
Non-Resident Tuition
(3,531,887) (1,765,944)
0 0
0
500,000
(400,000) (300,000) (200,000)
(250,000) (250,000) (250,000)
(75,000) (50,000) 0
30,000 40,000 50,000
(8,460,087) (6,559,144) (4,133,200)
Other
TOTAL Revenue Adjustment
2012-13 Expenditure Adjustments
Full-time Faculty Obligation - reduction) - actual faculty FTE = 212
Step, Column, Longevity, etc
Medical Benefit increase- 5% increase of Fed. One-time Funds
Retiree Medical Benefit Increase
PERS rate increase to 11.417%
Increase in Worker's Comp., Gen. Liability,
TRAN Interest Expense
Utilities
Operating Cost Increases
Reduction in Indirect Reimbursements from Grant programs
Recalculation of 5% Reserve
Total Expenditure Adjustments
Projected 2012-13 Structural Balance (Deficit)
Reductions (Phases I through III)
397,000 397,000 397,000
(10.5) (10.5) (10.5)
(320,000) (320,000) (320,000)
(200,000) (200,000) (200,000)
(20,000)
(60,000)
(75,000)
(70,000)
70,000
(20,000)
(60,000)
(50,000)
(60,000)
(20,000)
(60,000)
(25,000)
(50,000)
90,000 110,000
(175,000) (150,000) (100,000)
(50,000)
209,000
(38,000)
209,000
0
209,000
(294,000) (202,000) (59,000)
(8,754,087) (6,761,144) (4,192,200)
2,124,990 2,124,990 2,124,990
66 2/3 of One-time Reserves used to bridge deficit
Net Deficit for 2012-13
2,635,000 2,635,000 2,635,000
(3,994,097) (2,001,154) 567,790
Labor Agreements- Salary/Benefit concessions and/or position reductions
Cost of 1% for all groups $446,000 (including adjuncts)-base budget ?
* Does not include categorical program reductions for 2012-13 for restricted funds
?
?
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State Enacted Budget
08-06-12 Governing Board
Difference between ongoing Revenues & Expenses (Structural Deficit)
Increase in State Revenue Anticipated
November Tax Proposals fail, 1/2 of the 6% reduction
Property Tax Shortfall
2012-13 Student Fee Revenue Shortfall
Possible Increase in CCC Prop 98 allocation- if tax proposals pass (2%)
Reduction in Non-Resident Tuition
Other changes in revenue
* 1/2 of RDA Risk budgeted as one-time deficit (See Operating Reserves)
Net change in revenue
2012-13 through 2015-16
Base Budget
Planning Parameters
2012-13
Mid-Range Projected
(4,233,200)
(1,765,944)
(300,000)
(250,000)
(50,000)
40,000
(6,559,144)
2013-14
Projected
(4,636,154)
1,100,000
(3,536,154)
Net Increases in Ongoing Expenses
Full-time Faculty Position changes (-10.5, -6, +6, +6) (net of adjunct backfill)
Step, Column, Longevity Increases, etc.
Medical Plan Rate Increase-- 5%, 8%, 8%,8%
Retiree Benefit Increase
PERS Rate Increase
STRS Rate Increase
Worker's Comp, Unemployment Insurance
TRAN Interest Expense
Utilities
Net Operating Increases
Reduction in Indirect Reimbursements from grants
Labor agreements
Recalculation of 5% reserve
Total Expenditure Increases
Budget Reductions Phase I
Budget Reductions Phase II
Budget Reductions Phase III
Ongoing Shortfall*
Allocation of 66 2/3% of operating reserves
*Deficit net of One-time funds
397,000
(320,000)
(200,000)
(20,000)
(60,000)
?
(50,000)
(60,000)
90,000
(150,000)
(38,000)
?
209,000
(202,000)
938,864
744,921
441,205
(4,636,154)
2,635,000
(2,001,154)
*If the Governor's tax proposal is not approved by voters, the deficit will increase by another $3.5 million (7.3%).
One half of the increase is reflected above based on mid case planning assumptions.
The RDA risk has been removed--it is assumed that the state will backfill all risk associated with RDA
200,000
(300,000)
(360,000)
(85,000)
(120,000)
?
(100,000)
(100,000)
(100,000)
?
(965,000)
?
(4,501,154)
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2014-15
Projected
(4,501,154)
2015-16
Projected
(4,891,154)
1,100,000 1,100,000
(3,401,154) (3,791,154)
(240,000)
(345,000)
(360,000)
(145,000)
(150,000)
?
(50,000)
(50,000)
(150,000)
?
(1,490,000)
?
(240,000)
(345,000)
(360,000)
(145,000)
(175,000)
?
(50,000)
(50,000)
(175,000)
?
(1,540,000)
?
(4,891,154) (5,331,154)

CABRILLO COLLEGE
GENERAL FUND BALANCE
08-06-12 Board Meeting
Projected Operating Reserves
Beginning Balance (Mid Year-Bridge Fund Reserves, Final Budget)
ADD:
Carryover and One-time Fund Give Backs
One-time transfer from Bookstore Fund
Projected Ending balance (increased by $175,500 in mid-year reductions)
2012-13 Estimated One-Time Subfund Allocations
LESS:
2011-12 Increase in Student Fee Revenue Shortfall (February 2012)
66.67% Allocated to 2012-13 Deficit
Projected Ending Operating Reserves
= (2,450550+1,500,000) *66.67%
Projected
Projected
@ 66.67%
FY 2011-12 FY 2012-13
1,309,000 2,450,550
666,050
200,000
1,675,500
(200,000)
1,500,000
(1,200,000)
(2,635,000)
2,450,550 1,315,550
3,950,550 2,633,832
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CABRILLO COLLEGE
FY 2012-13 Base Budget/Categorical Budget Development Timeline Draft
August 6, 2012 Board
September 7, 2011
September 21 & 22
SANTA CRUZ COUNTY COMMITMENT KICK OFF
BUDGET TOWN HALL MEETINGS
CPC MEETING
- Budget Planning Kick Off For 2012-13
September - December, 2011
October 3, 2011
October 4/5, 2011
October 25/19, 2011
October 4-December 1, 2011
October/November
November 7, 2011
November 8/2, 2011
November 22/16, 2011
December 5, 2011
December 6/7, 2011
December 20/21, 2011
January 9, 2012
January 10, 2012
January 10/11, 2012
January 13, 2011
January 24/18, 2012
February 6, 2012
February 7/1, 2012
February 21/15, 2012
March- April 2012
April - June 2012
FACULTY SENATE- Program Review Task Force meets to develop recommendations
BOARD MEETING
Information Items:
- Budget Presentation 2012-13
- Review of 6/30/11 Ending Fund Balance
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/CPC MEETING
Information Items:
- Budget Planning Parameters for 2012-2014
- Budget Development Timeline
ADMINISTRATIVE COUNCIL/CPC MEETING
Carryover and One-Time Fund review by Components, Cabinet, Admin. Council and CPC
Faculty Prioritization Process/ Determine FON requirements for Fall 2012
BOARD MEETING
Information Items:
- Budget Planning Parameters for 2012-2014
- Budget Development Timeline
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/
CPC MEETING
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/
CPC MEETING
BOARD MEETING
Action Items:
- Budget Planning Parameters for 2012-2014
- Budget Development Timeline
- Review Faculty Obligation number for 2012
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/
CPC MEETING
ADMINISTRATIVE COUNCIL/CPC
BOARD MEETING
Information Items:
- Budget Update
2012-13 GOVERNOR'S STATE BUDGET
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/
CPC MEETING
STATE BUDGET WORKSHOP
ADMINISTRATIVE COUNCIL/CPC
BOARD MEETING
Information Items:
- Update Budget Parameters FY2011-12 and FY 2014-15
- Update Budget Development Timeline- FY 2013-14
- Review Budget Reduction Target for 2012-13- ALL Funds, $2.5 million for Base Budget
- Carryover and One-Time Fund review/Critical Needs
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/
CPC MEETING
ADMINISTRATIVE COUNCIL/CPC
SPRAC Review of Program Reduction Plans for 2012-13
2012-13 Negotiations- All groups
108

CABRILLO COLLEGE
FY 2012-13 Base Budget/Categorical Budget Development Timeline Draft
August 6, 2012 Board
March 5, 2012
March, 2012
March 6/7, 2012
March 20/21, 2012
April, 2012
April 2, 2012
April 3/4, 2012
April 24/18, 2012
May 7, 2012
May 8/2, 2012
May 29/16, 2012
May 25, 2012
June 2012
June 11, 2012
June 12/6, 2012
June 26/20, 2012
July 18/25, 2012
August 6, 2012
August 7/1, 2012
August 28/15, 2012
September 11/5, 2012
September 17, 2012
September 25/19, 2012
BOARD MEETING
Information Items:
- FY 2011-12 Mid Year Cuts from the state
- 2012-13 Budget Reduction Plans Phase I (Base, Categorical Budgets & Other Funds)
- Projected General Fund Ending balance as of June 30,2012
Action Items:
- 2011-12 through 2014-15 Budget Planning Parameters
- March 15 Notices to Faculty- Reduction or Discontinuance of Services
- Resolution-Reduction or Discontinuance of Classified/Confidential/Management Service
First Principal Apportionment 2011-12 Received
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/
CPC MEETING
ADMINISTRATIVE COUNCIL/CPC MEETING
Continue to evaluate/revise Planning Parameters
BOARD MEETING
Action Items:
- Update Budget Development Timeline- FY 2013-14
- FY 2011-12 Mid Year Cuts from the state
- Budget Reduction Plans Phase I (Base, Categorical Budgets & Other Funds)
- Resolution-Reduction or Discontinuance of Classified/Confidential/Management Service
Information Items:
- 2012-13 Budget Reduction Plans Phase II
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/
CPC MEETING
ADMINISTRATIVE COUNCIL/CPC
BOARD MEETING
Action Items:
- Final Notices to Faculty- Reduction or Discontinuance of Services
- Resolution-Reduction or Discontinuance of Classified/Confidential/Management Service
- Budget Reduction Plans Phase II (Base Categorical Budgets & Other Funds)
Information Items:
- 2012-13 Budget Reduction Plans Phase III
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/
CPC MEETING
ADMINISTRATIVE COUNCIL/CPC MEETING
Governor's May Revise for 2012-13 released
Second Principal Apportionment 2011-12 Received
BOARD MEETING
Action Items:
- 2012-13 Budget Reduction Plans Phase II and Phase III
- 2012-13 Preliminary Budget
Information Items:
- 2012-13 Updated Budget Planning Parameters
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/
CPC MEETING
ADMINISTRATIVE COUNCIL/CPC MEETING
CPC MEETINGS
BOARD MEETING
Action Items:
- 2012-13 through 2015-16 Budget Planning Parameters
Information Items:
- 2012-13 Budget Reduction Plans, Phase IV
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/
CPC MEETING
ADMINISTRATIVE COUNCIL/CPC MEETING
ADMINISTRATIVE COUNCIL/MANAGER'S MEETING/
CPC MEETING
BOARD MEETING
Action Items:
- 2012-13 Budget Reduction Plans, Phase IV
- 2012-13 Final Budget
ADMINISTRATIVE COUNCIL/CPC MEETING
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