AGENDA ITEM BACKGROUND
TO: GOVERNING BOARD
DATE
FROM: PRESIDENT
April 11, 2011
SUBJECT:
2010-11 and 2011-12 Budget Planning Parameters
REASON FOR BOARD CONSIDERATION
ACTION
ENCLOSURE(S)
Page 1 of 7
ITEM NUMBER
D.1
BACKGROUND:
2010-11 Budget Update:
The college received the 2010-11 First Principal Apportionment report from the State Chancellor’s
Office in March.
 The 2009-10 general apportionment recalculation resulted in an increase in one-time funds of
$100,000.
 The 2010-11 report includes maximum growth funding for the college; approximately $1.3
million.
 Student enrollment fee revenues continue to fluctuate. The student fee revenue shortfall as of the
first principal apportionment report is $45 million; approximately $460,000 for Cabrillo.
The 2010-11 budget planning assumptions have been updated to reflect the increase in the deficit.
2011-12 Budget Update:
The Legislature, utilizing the authority to pass a budget with a majority vote provided through
Proposition 25, approved the 2011-12 Budget Act (SB 69) on a partisan vote. Highlights of the
California Community College proposals include the following:
 A $400 million cut to the base, taken as a workload reduction
 A $10 increase in per-unit fees, which will mitigate the base cut
 A rejection of the census change proposal
 A new inter-year deferral ($129 million)
The 2011-12 budget includes two major assumptions:
1) The elimination of Redevelopment Agencies, which would save $1.7 billion and
2) The Governor’s proposed revenue package is approved by voters.
Continued next page
FISCAL IMPACT:
2011-12 Preliminary Budget Base Budget deficit in the mid-case scenario is $7.2 million.
RECOMMENDATION:
It is recommended that the Governing Board approve the 2010-11 and 2011-12 Budget Planning
Parameters as presented for the 2011-12 Preliminary Budget. The mid-range scenario will be used to
develop the preliminary budget.
Administrator Initiating Item:
Victoria Lewis
Academic and Professional Matter
If yes, Faculty Senate Agreement
Senate President Signature
 Yes  No
 Yes  No
Final Disposition
Approved
As of this writing, Governor Brown’s discussions with Republican legislators to put tax extensions
on the June ballot have ended. The next steps in the process are not clear. Alternative plans are
under discussion but the threat of an all cuts budget is high.
The California Community College League has updated their “District Budget Impact” calculation to
reflect information contained in the First Principal Apportionment report. The 2011-12 Budget
Planning Parameter estimates have been updated to reflect the League’s recent assumptions.




In February, the Governing Board approved the allocation of 66.67% of the operating
reserves. There have been some changes in the reserve balance since the allocations
were approved in February. See page 61 for an update on Operating Reserves.
The 2010-11 Principal Apportionment report also included a $460,000 reduction
resulting in a revised operating reserve total of $4,568,000. The allocation of 66.67%
of the reserves results in an allocation of $3,700,000 to the 2011-12 budget deficit.
See page 63 for the updated reserve calculation.
The best, mid and worst case scenario projections before the application of reserves
are: $4.8 million, $7.2 million and $10.7 million. The college will utilize reserves of
$3.7 million to reduce the deficit for 2011-12.
The college is moving forward with planning to reduce ongoing expenditures by $7.2
million for the fiscal year that begins July 1, 2012. See pages 59-60 for the updated
planning documents.
The 2011-12 Preliminary Budget will be prepared using the following assumptions:
1) The mid-case scenario will be used to project the deficit; $7.2 million
2) 66.67% of the Operating Reserves will be used to reduce the deficit; $3.7 million
3) Uncommitted Carryover and One-time funds will be used to reduce the deficit. The amount
is to be determined.
4) The college will identify operating reductions for 2011-12.
If an all cuts budget is enacted, the college will have to identify over $3 million in base operating
budget reductions for 2011-12. This will be in addition to the operating reductions identified for the
2011-12 Preliminary Budget.
Page 2
CPC/Board Meeting
April 11, 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
2010-11 Revenue Adjustments- First Principal Apportionment
A. Reverse 66.4% of the 2009-10 FTES Reduction (formerly classed
as 2.21%growth)
1,300,000
1,300,000
B. Remove Negative COLA
216,000
216,000
216,000
C. Deficit Factor Student Fee Revenue Shortfall@ $45 million
(460,000)
(460,000)
(460,000)
D. Adjust General Apportionment Shortfall
465,000
465,000
465,000
0
100,000
100,000
(9,463,000)
(6,397,000)
(4,111,000)
1,097,000
1,097,000
1,097,000
?
?
?
?
?
?
(8,731,000)
(5,565,000)
(3,279,000)
Full-time Faculty Obligation -Fall 2011 (205.6)
(360,000)
(360,000)
(360,000)
(Faculty step 5/5, with benefits $90,000)-reduce fund by 4
Adjunct Replacement Units- 30 units per FT position @ $1750 per unit
(4)
210,000
(4)
210,000
(4)
210,000
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.- $8.36 mil, $5.3 mil, $3.01 mil net
of enrollment fee increase
B. Increase in Student Fees $110 mil.-to offset apportionment
reduction
C. Deficit Factor Student Fee Revenue Shortfall
Other
TOTAL Revenue Adjustment
2011-12
Classified positions
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
District Contribution- Bus Pass Program
0
0
0
(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
Total Expense Adjustments
1,831,000
1,666,000
1,501,000
(10,562,000)
(7,231,000)
(4,780,000)
66.67% of Operating Reserves applied to 2011-12 Deficit
3,700,000
3,700,000
3,700,000
Carryover, One-time and Operating Expense Reductions
Net Reduction Target for 2011-12
6,862,000
0
3,531,000
0
1,080,000
0
Projected 2011-12 Structural Balance (Deficit)
Budget Planning
CPC/Board Meeting
April 11, 2011
Difference between ongoing Revenues &
Expenses (Structural Deficit)
Increase in State Revenue Anticipated
Student Fee Revenue 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- $8.36 mil, $5.3
mil, 3.01 mil net of Enrollment Fee Inc.
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)
(265,000)
(7,231,000)
(9,276,000)
0
0
(150,000)
(425,000)
(112,500)
(450,000)
(460,000)
1,300,000
216,000
465,000
100,000
(6,397,000)
1,621,000
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*
(265,000)
1,097,000
(5,300,000)
150,000
(395,000)
0
(825,000)
0
(66,000)
(400,000)
0
(80,000)
0
0
(150,000)
100,000
?
?
(1,666,000)
(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)
?
?
?
(7,231,000)
(9,276,000)
(11,188,500)
Allocation of 66 2/3% of operating reserves
3,700,000
Deficit net of One-time funds
(3,531,000)
*Estimates will change as more information becomes available
CPC/Board Meeting
April 11, 2011
Operating Reserves
Projected 6/30/11
Mid-Year Reserves
One-time Subfund Transfer not needed for 2010-11Base
Budget
Unallocated Contingency Reserve
2010-11 Sabbatical Savings (base budget)
2009-10 Apportionment Recal
DSPS Interpreters
Student Loan Program
Total
2,736,353
1,480,489
264,208
66,950
100,000
-30,000
-50,000
4,568,000
CPC/Board Meeting
April 11, 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
4,568,000
8,277,000
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
Projected reserves available when FY 2010-11 is closed
Reserves currently available
$17,276,000
4,568,000
1,000,000
5,568,000
CABRILLO COLLEGE
GENERAL FUND BALANCE
CPC/Board Meeting
April 11, 2011
OPERATING RESERVES
Beginning Balance (Mid Year -Bridge Fund Reserves, Final Budget)
ADD:
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
4,568,000
Projected
@ 66.67%
FY 2011-12
5,568,000
1,000,000
1,000,000
5,568,000
3,700,000
(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
$5,568,000.
For FY 2011-12, three different scenarios are presented estimating the ending balance for 'Operating Reserves' based on a 66.67% , operating
reserves.