Cabrillo College Governing Board

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1
Cabrillo College Governing Board
Monday, February 14, 2011
Cabrillo College Sesnon House
6500 Soquel Drive
Aptos, California 95003
OPEN SESSION
1. Call to Order and Roll Call
PAGE
TIME
4:00
2. Adoption of Agenda
3. Public Comments Regarding Closed Session Items (three minute
time limit per speaker)
Please notify clerk if you desire to speak to the Board.
4. Announcement of Closed Session
5. Adjourn to Closed Session
CLOSED SESSION
1. Conference with Real Property Negotiators (Government Code
§54956.8)
Property: 251 Kings Village Road, Scotts Valley, California 95066
Agency Negotiator: Brian King
Negotiating Party and Owner: Scotts Valley City Manager, City of
Scotts Valley
Under Negotiation: Terms of Payment, Conditions
OPEN SESSION

Call to Order and Roll Call


Report Out of Closed Session
Oral Communications - Members of the audience may speak to
non-agenda items (three minute time limit per speaker).
A. Consent Items
1. Human Resources Management Report
It is recommended that the Governing Board ratify and/or approve
the human resources management report.
B. Action Items
1. 2011-12 through 2013-14 Budget Reduction Process
Commitments, Criteria and Strategies
It is recommended that the Governing Board approve the budget
reduction process, commitments, criteria and strategies for fiscal
years 2011-12 through 2013-14.
2. Allocation of One-Time Operating Reserves to FY 2011-12
It is recommended that the Governing Board approve the
allocation of one-time operating reserves to FY 2011-12.
4:15
2
February 7, 2011
C. Information Items
1. 2010-11 and 2011-12 Budget Planning Parameters Update
A 2010-11 and 2011-12 budget planning parameters update will be
presented for Governing Board information.
CLOSED SESSION
ADJOURN
6:00
For ADA related meeting accommodations, contact Dominique Hansen, Executive Assistant to the
President, at (831) 479-6306 at least 24 hours in advance of the meeting.
3
AGENDA ITEM BACKGROUND
TO:
GOVERNING BOARD
FROM:
PRESIDENT
DATE
February 14, 2011
SUBJECT:
Human Resources Management Report
REASON FOR BOARD CONSIDERATION
ENCLOSURE(S)
Page 1 of 2
ITEM NUMBER
ACTION
A.1
BACKGROUND:
Requesting ratification and/or approval of the following employment transaction:
FISCAL IMPACT: Within budgeted FTE’s.
RECOMMENDATION: It is recommended that the Governing Board ratify and/or approve the
transaction as described on the attached page.
Administrator Initiating Item:
Loree McCawley/Victoria Lewis
Academic and Professional Matter
If yes, Faculty Senate Agreement
Senate President Signature
 Yes  No
 Yes  No
Final Disposition
4
Name
Department/Division
Position
Effective Date
Action
ROGERS, Joel
VAPA/Instruction
VAPA Division Dean
06/30/11
Resignation
(DOH: 07/01/10)
(Special Board Meeting) February 14, 2011
Page 2 of 2
5
AGENDA ITEM BACKGROUND
TO: GOVERNING BOARD
DATE
FROM: PRESIDENT
February 14, 2011
SUBJECT:
2011-12 through 2013-14 Budget Reduction Process
Commitments, Criteria and Strategies
REASON FOR BOARD CONSIDERATION
ACTION
ITEM NUMBER
ENCLOSURE(S)
Page 1 of 4
B.1
BACKGROUND:
The College is moving forward with budget planning for the 2011-12 fiscal year. In October of 2010, the
College Planning Council reviewed and revised the Budget Reduction Process Commitments, Criteria and
Strategies that will be used for budget planning for 2011-12 through 2013-14.
The attached document was reviewed by the Governing Board in November, 2010 as a part of the 2010-11
and 2011-12 Budget Planning Parameter Update.
FISCAL IMPACT:
None.
RECOMMENDATION:
It is recommended that the Governing Board approve the budget reduction process, commitments, criteria
and strategies for fiscal years 2011-12 through 2013-14
Administrator Initiating Item:
Victoria Lewis
Academic and Professional Matter
If yes, Faculty Senate Agreement
Senate President Signature
 Yes  No
 Yes  No
Final Disposition
6
CPC October 6, 2010
2011-12 through 2013-14
Budget Reduction Process Commitments, Criteria and Strategies
The economic crisis affecting the state budget is conservatively projected to last at least three years. At the
current time, our best efforts at projecting the fiscal impact on Cabrillo indicate that our state funding may
continue to decline.
The intent of the following process commitments, criteria and strategies is to enable Cabrillo to move from
being a college that is organized and staffed to operate on a $60 million budget to an organization and staffing
level that can deliver sustainable services to the community with a smaller budget.
I.
Process Commitments
A.
Link Budget planning, including program and service reductions and redesign efficiencies, to
long range planning, including the evaluation of the impact on student success.
B.
Utilize the appropriate forums to dialogue about the restructuring, consolidation, reductions,
and/or elimination of programs and services resulting from a reduction in resources.
C.
In the event that program and workforce reductions are necessary, the college will work to
preserve faculty, staff and management positions when possible and, if not possible, will assist
with employment-related transitional issues.
D.
The process will be characterized by openness, respect, sensitivity, and inclusiveness.
The College Master Plan provided the general framework for the following criteria:
II.
Criteria
A.
Compliance Requirements
1.
Maintain accreditation standards of the college and academic programs
Maintain state and federal compliance requirements (CMP Goal B) e.g.:
2.
 50% law
 Full-Time faculty obligation number (FON)
 Accessibility
B.
Preserve transfer, basic skills, and Career Technical Education so students are able to complete
their academic goals (CMP Goal B)
 Core courses toward an AA/AS
 General education breadth
 Labor market
C.
Minimize negative impact on student success (CMP Goals B & C) e.g.
 ARCC
D.
Optimize enrollment to achieve maximum state revenues.
7
III.
E.
Minimize impact of non-base budget programs on General Fund (CMP Goal E)
 Ancillary/Auxiliary operations
 Categorical and grant-funded programs
F.
Maximize efficiency of programs and services (CMP Goal A and Technology Plan)
 Are college programs and services efficient?
 WSCH/FTEF
 Non-redundant
G.
Minimize the negative impact on the operational needs of new and existing facilities (CMP Goal
D and Facilities Master Plan)
H.
Optimize effective utilization of college facilities (CMP Goal E)
I.
Maximize flexibility and opportunities for employees (Process Commitment C)
Strategies
A.
Design and implement Strategic Enrollment Management Plan and determine the FTES targets
for 2011-12 through 2013-14.
B.
Review all auxiliary and categorical program budgets with the appropriate budget administrator
to identify reductions.
C.
Evaluate college-wide services and systems; explore alternative models across components;
reduce costs, reduce duplication of function, and increase efficiencies throughout the college.
D.
Management of personnel budget.
Process Overview
Utilize salary savings for vacant positions to reduce the overall budget reduction target.
 Salary savings may be used to fund replacements for vacant positions based on demonstrated
need and the approval of the Vice President/President.
 Salary savings may not be used to cover other operating expenses or equipment purchases.
 Cabinet may approve the recruitment of vacant positions based on demonstrated need.
 Human Resources will provide a list of vacant positions and the status of recruitments on a
weekly basis.
 Administrative Services will provide a report of cumulative salary savings on a monthly
basis.
E.
Evaluate facility use for efficiency and effectiveness.
Watsonville
Scotts Valley
Energy Use Reduction



F.
Discuss compensation and benefit programs with all employee groups.
8
IV.
Historical Data Available
A.
Internal Data
 Cost Center
Actual 06-07 Expenditures, number of full-time equivalent faculty, staff and administrators
(FTE) and FTES
Actual 07-08 Expenditures, FTE and FTES
Budget 08-09 Expenditures, FTE
 Staffing levels by department and bargaining unit from accreditation self-study
 FACT Books http://pro.cabrillo.edu/pro/factbook/index.html
 Space Planning project database
 Suggestion box for anonymous input
 Budget reduction website
 Accreditation Self-Study http://www.cabrillo.edu/services/pro/accred/index.html
 Program Planning Pages http://pro.cabrillo.edu/pro/factbook/programPlanningTables.html
B.
External Data
Fiscal Data Abstract 06-07
Current Cost of Education 06-07
WASC Accreditation Standards
http://www.cabrillo.edu/services/pro/accred/pdf/ACCJC%20NEW%20STANDARDS.pdf



9
AGENDA ITEM BACKGROUND
TO: GOVERNING BOARD
DATE
FROM: PRESIDENT
February 14, 2011
SUBJECT:
Allocation of One-Time Operating Reserves to FY 2011-12
REASON FOR BOARD CONSIDERATION
ACTION
ENCLOSURE(S)
ITEM NUMBER
Page 1 of 4
B.2
BACKGROUND:
The College is moving forward with budget planning for the 2011-12 fiscal year. The Governing Board
reviewed the projected ending balance for the 2010-11 through 2011-12 fiscal years. The following reserve
categories have been established for the college:



A 5% mandatory reserve; $ 3,209,000
Projected Operating Reserves (Savings); $6,500,000 through 2011-12
A $500,000 FTES reserve. Staff recommend the reserve be increased by $500,000
in 2011-12. The FTES reserve will provide resources to buffer marked changes in enrollment
funding.
On December 3, 2007 the Governing Board approved BP 4030. Per BP 4030 “Unrestricted general reserves
shall be no less than the minimum prudent reserve level established by the State Chancellor’s Office”, i.e.
5%.
The college has saved funds to develop an operating reserve to help bridge the gap between ongoing
revenues and ongoing expenses (the structural deficit). Operating reserves to date total $5,038,000. The
Governing Board directed staff to project unallocated funds or savings that will be available after the 201011 fiscal year is closed. The Governing Board also directed staff to include the estimated savings in the
2011-12 budget planning parameters. The Business Office has reviewed spending patterns for the current
year and is estimating additional resources available as of June 30, 2011 will be approximately $1,000,000.
Note: there is risk in projecting and allocating savings from current and future years before the fiscal years
are closed. Fluctuations in revenues and expenditures occur on a regular basis. Projections of savings will
increase or decrease as actual revenues and expenditures are known.
FISCAL IMPACT:
Allocate $4,026,000 of operating reserves to bridge the structural deficit for 2011-12.
RECOMMENDATION:
It is recommended that the Governing Board continue to set aside a 5% mandatory reserve, increase the
FTES reserve by $500,000 in 2011-12 and approve the use of 66.67% of the $6,038,000 operating reserves
of the college to bridge the deficit for fiscal year 2011-12.
Administrator Initiating Item:
Victoria Lewis
Academic and Professional Matter
If yes, Faculty Senate Agreement
Senate President Signature
 Yes  No
 Yes  No
Final Disposition
10
The Governor’s January Budget for 2011-12 includes a net decrease of $2.9 million in general
apportionment revenue. It is anticipated that the state will implement the reduction by reducing the
college’s funded FTES via a workload reduction. The state budget also includes an increase in enrollment
fees of $10 raising the fees from $26 per credit unit to $36 per credit unit; a 38% increase in fees. The
college is approximately 5% over the enrollment cap for 2010-11. Past experience has shown that
enrollment trends are cyclical. As the economy continues to improve enrollment demand may drop. The
college has cut over 400 course sections over the past four years jeopardizing the stability of some of the
college’s core programs and student success. State revenue received from FTES is the main source of
funding for the college.
2011-12 Reserve Allocations
Governing Board principles of budget planning for 2011-12
1) The unrestricted general fund balance should not continue to increase. The balance has increased for a
variety of reasons - mostly a restricted spending environment and an unknown sense of revenues at the
beginning of each year.
2) Authorize use of up to 66.67% of operating reserves (included on page 4)
3) We use the shared governance process to evaluate the use of one time and carry over reserves to ensure
that the following needs address current priorities:
a. CPC allocations made in prior years
b. New and existing needs for maintenance, information technology, etc. and other one time
program expenses
c. Deferred program/department expenses
4) Develop contingencies for the mid and worst case scenarios to be enacted only if necessary to address
the budget deficit for 2011-12..
5) Direct staff to bring recommendations for personnel/compensation and program cuts to the Governing
Board if there is a need to adopt a mid or worse case scenario.
6) Direct staff to bring the 2011-12 planning parameters to the April Board meeting for action. The college
will know in early to mid-March if the tax measure will be on the ballot
7) Direct staff to use the 2011-12 fiscal year to plan and prioritize future expenses which lead to student
success now that our environment has changed so dramatically.
8) Develop priorities for the college given the current budget environment and bring the budget and policy
discussions into one conversation rather than parallel actions.
11
Board Meeting
February 14, 2011
Cabrillo Unrestricted General Fund balance as of 6/30/11
Board Designated Reserves
Mandatory 5% Reserve- Restricted
FTES Reserve- funds allocated to stabilize general apportionment revenues and
services to students
Operating Reserves projected
Total Reserves
Other Board designated allocations to departments through 6/30/10
Carryover Funds- (Contract commitments, allocations to departments)
One-time Funds allocated to departments (approved by CPC)
3,209,000
500,000
5,038,000
8,747,000
Subtotal
4,917,000
1,286,000
6,203,000
Additional Board designated allocations anticipated through 6/30/11
2010-11 Ending balance
Carryover funds to departments from the 2010-11 budget
Subtotal
1,000,000
1,796,000
$2,796,000
Unrestricted General Fund Projected ending balance for June 30, 2011
Operating Reserves currently available
Additional reserves available when FY 2010-11 is closed
Reserves currently available
$17,746,000
5,038,000
1,000,000
6,038,000
12
CABRILLO COLLEGE
GENERAL FUND BALANCE
Board Meeting
February 14, 2011
OPERATING RESERVES
Beginning Balance (Mid Year -Bridge Fund Reserves, Final Budget)
ADD:
One-Time Available Funds (unallocated)
Projected Increase in reserves- 2010-11 and 2011-12
LESS:
Allocation of reserves for 2011-12
Other Allocations (FTES Reserve)
Projected Ending Operating Reserves
Projected
FY 2010-11
4,385,818
Projected
@ 66.67%
FY 2011-12
6,038,000
652,000
1,000,000
1,000,000
6,038,000
(4,026,000)
(500,000)
2,512,000
This box lists the beginning balance for FY 2010-11, of 'Operating Reserves' as well as an estimated ending balance of apprioximately
$6,038,000.
For FY 2011-12, three different scenarios are presented estimating the ending balance for 'Operating Reserves' based on a 66.67% , operating
reserves.
The Board will decide on the percentage applied to the avaiable 'Operating Reserves' towards balancing the General Unrestrict ed Fund on a
one-time basis for FY 2011-12.
13
AGENDA ITEM BACKGROUND
TO: GOVERNING BOARD
DATE
FROM: PRESIDENT
February 14, 2011
SUBJECT:
2010-11 and 2011-12 Budget Planning Parameters Update
REASON FOR BOARD CONSIDERATION
INFORMATION
ITEM NUMBER
ENCLOSURE(S)
Page 1 of 3
C.1
BACKGROUND:
The Governing Board reviewed budget planning parameters for 2010-11 and 2011-12 on March 7, 2011.
The Board directed staff to prepare planning assumptions that include the use of 66.67%; $4,026,000 of
operating reserves for 2011-12. The updated planning assumptions are attached.
Administrator Initiating Item:
Victoria Lewis
Academic and Professional Matter
If yes, Faculty Senate Agreement
Senate President Signature
 Yes  No
 Yes  No
Final Disposition
14
Board Meeting
February 14, 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 [email protected] $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
District Contribution- Bus Pass Program
(100,000)
(100,000)
(100,000)
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
1,981,000
1,703,500
1,501,000
Total Expense Adjustments
Projected 2011-12 Structural Balance (Deficit)
(10,086,000)
(6,745,500)
(4,199,000)
66.67% of Operating Reserves applied to 2011-12 Defict
4,026,000
4,026,000
4,026,000
Net Reduction Target for 2011-12
(6,060,000)
(2,719,500)
(173,000)
Budget Planning
Board Meeting
February 14, 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
15
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*
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)
Allocation of 66 2/3% of operating reserves
4,026,000
Deficit net of One-time funds
(2,719,500)
*Estimates will change as more information becomes available
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