Victor Valley Community College District
2010-2011 Budget Workshop
1
Agenda
 California Budget
 District Trends and Analysis
 2010/11 Budget Assumptions
 5-Year Budget Plan
 Budget Options - Discussion
2
3
California Budget
• Community College League of California (CCLC)
Projects:
• 2010-11: expect flat budget
• 2011-12: return of COLA / Growth
• 2012-13: COLA/Growth
4
Legislative Analyst Office (LAO)
Recommendations:
•
Raise student fees to $40/unit
•
Reject the Governor’s proposal to implement a negative COLA
(-0.38%) and would use the increase in fees to fund COLA.
•
LAO believes it is not realistic to expect $6.9 billion in federal
relief. If Federal relief does not materialize, the Governor’s plan
proposes to trigger certain revenue increases and expenditure
reductions.
5
VVCCD: Effect of Workload Reduction on FTES
FTES Funded
FTES Unfunded
Section Counts**
Fill Rates*
100%
12,000
90%
11,000
90%
90%
90%
80%
10,000
206.37 599.91 599.91 80%
9,000
66%
70%
8,000
4,000
60%
No growth expected
9,422
9,821
9,211
5,000
8,803
6,000
9,422
3.39% reduction in funding
7,000
50%
40%
30%
3,000
2,993 2,000
2,815 2,805 2,665 20%
2,532 10%
1,000
0%
‐
2006‐2007
2007‐2008
2008‐2009
2009‐2010 @ P2
2010‐2011 Projected
*Includes credit, cross-listed (primary) and active sections. Does not include non-credit, independent study, cooperative
education, honors, open labs, BSKL or zero limit sections
**Section counts are calcualted using the same criteria as fill rates and the projection is based on a 5% reduction per year
6
7
REVENUE AND EXPENDITURE COMPARISON BY FISCAL YEAR 55,000,000
50,000,000
47,427,016
45,846,168
44,596,735
45,000,000
40,000,000
51,280,082
49,789,932
40,077,056
35,000,000
30,000,000
25,000,000
41,825,312
44,883,328
46,840,161
45,886,114
47,059,554
47,694,723
20,000,000
15,000,000
10,000,000
5,000,000
2005-06
2006-07
2007-08
Note: 2009-10 does not include SERP
payoff or funding of OPEB Trust.
8
2008-09
2009-10 (est)
2010-11 (bgt)
Total Expenditures
Total Revenues
Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Investment
$6,500,000
$6,935,000
$6,951,425
$6,968,753
$6,987,035
$7,006,322
$7,026,669
$7,048,136
$7,070,784
$7,094,677
$7,119,884
$7,146,478
$7,149,534
$7,152,758
$7,156,160
$7,159,749
$7,163,535
$7,167,529
$7,171,744
$7,176,189
$7,180,880
$7,185,828
$7,191,049
$7,196,557
$7,202,367
$7,208,497
$7,214,965
$7,221,788
$7,228,986
$7,236,580
IRREVOCABLETRUST
Int.Rate
Int.Earned
12.0%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
5.5%
$780,000
$381,425
$382,328
$383,281
$384,287
$385,348
$386,467
$387,647
$388,893
$390,207
$391,594
$393,056
$393,224
$393,402
$393,589
$393,786
$393,994
$394,214
$394,446
$394,690
$394,948
$395,221
$395,508
$395,811
$396,130
$396,467
$396,823
$397,198
$397,594
$398,012
Pay‐Go
$345,000
$365,000
$365,000
$365,000
$365,000
$365,000
$365,000
$365,000
$365,000
$365,000
$365,000
$390,000
$390,000
$390,000
$390,000
$390,000
$390,000
$390,000
$390,000
$390,000
$390,000
$390,000
$390,000
$390,000
$390,000
$390,000
$390,000
$390,000
$390,000
$390,000
Difference
$435,000
$16,425
$17,328
$18,281
$19,287
$20,348
$21,467
$22,647
$23,893
$25,207
$26,594
$3,056
$3,224
$3,402
$3,589
$3,786
$3,994
$4,214
$4,446
$4,690
$4,948
$5,221
$5,508
$5,811
$6,130
$6,467
$6,823
$7,198
$7,594
$8,012
$744,592
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Cost Savings Measures for 2010‐11
EXPENSE
EXPENSE SAVINGS
(1000's) Academic Salaries
1 SERP #2 ‐ Salary savings from offering Supplemental Early Retirement Program
$ 67,433
(2000's) Classified Salaries
1 SERP #2 ‐ Salary savings from offering Supplemental Early Retirement Program
$ 307,192
(3000's) Employee Benefits
1 SERP #2 ‐ Benefit savings from offering Supplemental Early Retirement Program
2 OPEB Funding of Trust ‐ Savings from not having to pay annual premium
$ 87,875
$ 345,000
(5000's) Services & Operations 1 TRAVEL ‐ Budgets will be allocated to VPs only. Requested travel must be approved by
VP and, if approved, will be transferred into department budget
2 UTILITIES ‐ Agreement between VVC and Telepacific Comm. Corp (3/10) was approved
to replace telephone carrier svcs. ($2,700/mo) Potential for greater savings in the future
3 UTILITIES ‐ Implementation of energy savings measures (electricity & water)
4 LICENSES ‐ Working with IT Dept. to determine if amount of licenses can be reduced
5 MEMBERSHIPS ‐ Reviewing if need for membership is critical to department or program
REVENUE
1
2
3
EXCELSIOR ‐ Lower portables rental
SOLAR ‐Credit for 5 years beginning 2010‐11 ($800k/yr)
WIB GRANT ‐ Indirect revenue
10
$ 60,000
$ 32,400
$ 400,000
in review
in review
REVENUE
$ 391,475
$ 800,000
$ 100,000
DRAFT
General Fund Preliminary Budget Assumptions
For Fiscal-Year 2010-2011
General Assumptions:
1. The District shall maintain legal compliance of the 50% law.
2. The District will develop a balanced budget with a minimum 5% ending fund balance (reserve).
3. The Program Review, Planning, and Budget Development Process will guide the allocation of
resources.
4. The District will strive to maintain course offerings at 2009/10 levels.
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DRAFT
Revenue Assumptions:
5. The State will not provide any funding for growth.
6. Funding for categorical programs will remain at 2009/10 levels.
7. The solar field will generate approximately $800,000 in new revenue from renewable solar
energy credits (REC).
8. Workforce Investment Board (WIB) revenues to the District will net approximately $100,000
above expenses.
9. Local revenue will increase by approximately $390,000 (rentals, leases, Head Start, etc).
10. Reserve funds will be utilized to partially offset revenue shortfall.
11. The State will backfill any decline in property tax revenues from the 2009/10 level.
12. The State apportionment will include an adjustment of -0.38% for COLA.
13. Current Statewide Enrollment Fee Revenue shortfall will continue in 2010/11 affecting
approximately $100,000 loss to VVC.
14. The base allocation will be maintained at approximately $1 million for medium college status
that was attained in fiscal year 2008/09 (10,001 FTES).
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DRAFT
Expense Assumptions:
15. The District will limit the amount of unfunded FTES to 5% of the funded cap (approx. 500).
16. District health benefits will increase by approximately $630,000.
17. State Unemployment Insurance rate will increase from .30% to .72%.
18. Employer contribution to PERS will increase from 9.428% to 10.2%.
19. Vacancies due to retirement or resignation may not automatically be filled.
20. The District will save approximately $400,000 by implementing energy efficiency measures.
21. The District will apply any savings from Cost Saving Measures that are implemented to
reduce the budget shortfall.
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Victor Valley Community College District
Unrestricted General Fund
PRELIMINARY DRAFT ONLY
4/26/10
Current Budget
Year
2009-2010
Full-Time Equivalent Students (Funded)
Full-Time Equivalent Students (Unfunded)
9,489
Budget
Year
2010-2011
-3.39%
9,489
512
Budget
Year
2011-2012
0.00%
9,489
512
Budget
Year
2012-2013
0.00%
9,489
512
Budget
Year
2013-2014
0.00%
9,679
512
322
BEGINNING FUND BALANCE
CATEGORY
ESTIMATED REVENUES
State (Apportionment Only)
State (All Other)
Local (Property Tax included)
Transfers In: Reserve
Anticipated State Mid-Year Reduction
TOTAL REVENUES
$9,293,779
$3,091,897
$2,606,537
$2,686,826
$2,690,737
$35,923,185
$393,643
$11,136,369
$5,900,000
($786,033)
$52,567,164
$35,786,677
$393,643
$11,514,403
$0
$0
$47,694,723
$35,786,677
$393,643
$11,514,403
$0
$0
$47,694,723
$35,786,677
$393,643
$11,514,403
$0
$0
$47,694,723
$36,502,410
$393,643
$11,514,403
$0
$0
$48,410,457
ESTIMATED EXPENDITURES
Academic Salaries
Classified Salaries
Employee Benefits
Fund OPEB Trust
Payoff SERP #1 and #2
Cost to Maintain FTES (10,000)
Supplies, Software, Subscriptions
Services and Operations
Capital Outlay
Debt Svc., Transfers, Reserves
TOTAL ESTIMATED EXPENDITURES
$23,741,245
$11,013,704
$8,200,258
$6,500,000
$2,267,516
$0
$591,127
$5,663,000
$540,996
$251,200
$58,769,047
$24,045,409
$11,420,107
$8,852,691
$0
$0
$465,552
$591,127
$5,063,000
$540,996
$301,200
$51,280,082
$24,251,409
$11,576,107
$9,525,043
$0
$0
$465,552
$591,127
$5,063,000
$540,996
$301,200
$52,314,434
$24,457,409
$11,732,107
$10,239,421
$0
$0
$465,552
$591,127
$5,063,000
$540,996
$301,200
$53,390,812
$24,663,409
$11,888,107
$11,007,378
$0
$0
$465,552
$591,127
$5,063,000
$540,996
$301,200
$54,520,769
FUND BALANCE
Structural Deficit
ENDING FUND BALANCE
$3,091,897
5.3%
($493,463) -1.0%
$
3,100,000
$2,606,537
($2,013,174) -3.8%
$
5.1%
4,700,000
$2,686,826
($3,009,263) -5.6%
$
5.1%
5,700,000
$2,690,737
($3,419,575) -6.3%
$
5.0%
6,150,000
$2,730,425 5.0%
One Time Revenue
$
1,291,475
$
1,072,000
$
800,000
$
800,000
Budget Shortfall
$
1,808,525
$
3,628,000
$
4,900,000
$
5,350,000
Structural Deficit
$
3,100,000
14
$
4,700,000
$
5,700,000
2.0%
$
6,150,000
GUARANTEED INVESTMENT CONTRACT (GIC)
Reserve balance by Fiscal Year (includes interest income)
$ 39,875,755
6/30/2006
History of withdrawals from the fund (established in 1996)
2006‐07
TRANSFER IN: GENERAL FUND
$ 2,500,000
Instructional equipment; lease/purchase of Datatel software system
$ 40,438,247
6/30/2007
$ 32,034,723
6/30/2008
$ 27,829,952
6/30/2009
$ 19,929,254
6/30/2010
2007‐08
TRANSFER IN: CAPITAL OUTLAY FUND
$ 6,500,000
Advanced Tech Bldg.: Building Project Completion
Speech/Drama Addition: Building Project Completion
TRANSFER IN: GENERAL FUND
$ 4,800,000
To balance General Fund budget
TRANSFER IN: CAPITAL OUTLAY FUND
$ 2,000,000
Adaptive PE Bldg.: for Building project completion
TRANSFER IN: GENERAL FUND
$ 4,500,000
To balance General Fund budget
$ 2,700,000
Adaptive PE Building: for building project completion
$ 1,000,000
Solar project
2008‐09
2009‐2010
TRANSFER IN: CAPITAL OUTLAY FUND
TRANSFER IN: GENERAL FUND
$ 5,900,000
Fund SERP 1 and 2
Partially fund OPEB Trust
Projected ending balance in Guaranteed Investment Contract as of 6/30/10 (with interest)
2010‐2011
REQUEST DIRECTION FROM GOVERNING BOARD FOR 2010‐11
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Potential – Employee Concession Information
FURLOUGHS
Faculty = 131
1 day
5 days
10 days
12 days
Per Ed. Code, faculty must teach 175 days, therefore cannot participate in this option.
Classi fi ed = 185 x $202
$ 37,370
$ 186,850
$ 373,700
$ 448,440
Mgmt ‐ Cl assified = 22 x $361
Mgmt ‐ Academi c = 13 x $502
Management Total
$ 7,942
$ 6,526
$ 14,468
$ 39,710
$ 32,630
$ 72,340
$ 79,420
$ 65,260
$ 144,680
$ 95,304
$ 78,312
$ 173,616
$ 51,838
$ 259,190
$ 518,380
$ 622,056
1%
$ 240,568
$ 111,161
$ 351,729
5%
$ 1,202,842
$ 555,803
$ 1,758,645
10%
$ 2,405,684
$ 1,111,605
$ 3,517,289
SALARY REDUCTION
Academic (i ncl udes Mgmt) =
Classi fi ed (includes Mgmt) =
$ 24,056,838
$ 11,116,052
NOTE: All options must be negotiated.
*As of April, 2010
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Potential – Employee Insurance Benefit Contribution
MONTHLY CONTRIBUTION
# in
$50
group
$75
$100
$125
$150
$175
$200
$250
SAVINGS GENERATED WITH MONTHLY CONTRIBUTIONS (convert to 10thly for faculty)
Faculty
131
$
78,600
$
117,900
$
157,200
$
196,500
$
235,800
$
275,100
$
314,400
$
393,000
Classified
185
$ 111,000
$
166,500
$
222,000
$
277,500
$
333,000
$
388,500
$
444,000
$
555,000
Management
35
$
21,000
$
31,500
$
42,000
$
52,500
$
63,000
$
73,500
$
84,000
$
105,000
Mgmt-Board
5
$
3,000
$
4,500
$
6,000
$
7,500
$
9,000
$
10,500
$
12,000
$
15,000
$ 213,600
$
320,400
$
427,200
$
534,000
$
640,800
$
747,600
$
854,400
$ 1,068,000
*Alternate methods may be used (e.g. percentage vs. flat rate)
NOTE: All options must be negotiated.
* As of April, 2010
17
Potential – Other Insurance Benefit Options
OPT-OUT OF BENEFIT PACKAGE (Medical, Dental, Vision)
Cost of Benefit Package Per Employee:
Less: Cash in Lieu to Employee
$
$
11,220
(2,400)
Net Annual Savings to the District:
$
8,820
Example: If 35 people choose this option:
$
8,820
x
35
= $ 308,700
Potential Annual Savings to District
x
x
10% = $ 1,150 (Becomes annual cost to employees)
351 = $ 403,510
Potential Annual Savings to District
*Based on an estimated annual Blue Cross package for Faculty/Classified.
DISTRICT CAP OF BENEFIT PACKAGE (Medical, Dental, Vision, Life)
2010-11 Max Annual Benefit Package Paid By District:
$
11,496
If Package goes up by 10% for 2011-12:
Number of Employees = 351:
$
$
11,496
1,150
Staff may consider options to offset the rise in cost and negotiate a different plan design to decrease out of pocket cost.
For example, change in co-pay, prescription costs, etc.
*Based on an estimated annual Kaiser package for Faculty/Classified.
NOTE: All options must be negotiated.
As of April, 2010
18
Options To Balance
General Fund Budget
 2010-2011




Use one-time revenue sources
Negotiate concessions
Supplemental Early Retirement Program
Fund the balance of the deficit from reserves
 2011-2012





Use one-time revenue sources
Negotiate concessions
Program reorganization
Supplemental Early Retirement Program
Fund the balance of the deficit from reserves
19
Discussion
20