EL CAMINO COLLEGE
MEMBERS PRESENT
DeSanto, Michael – Campus Police
Alice Grigsby – Mgmt/Supervisors
Patel, Dipte – Academic Affairs
Quinones-Perez, Margaret – ECCFT
Reid, Dawn – Student & Community Adv.
Shenefield, Cheryl – Administrative Svcs.
Natividad, Rory – Chair (non-voting)
Moon, Derrick – ASO
Turner, Gary – ECCE
Widman, Lance – Academic Senate
OTHERS ATTENDING: Arce, Francisco, Beam, Linda, Bonacic, Patricia, Ely, Janice, Eskridge,
Mattie, Fallo, Tom, Fitzsimons, Connie, Garten, Ann, Gleason, Katie, Graff, Irene, Higdon, Jo Ann,
Key, Ken, Nishime, Jeanie, Rader, Emily, Wagstaff, Warren, Will,
Handouts: Final Budget 2012-13, Bond Presentation
The meeting was called to order at 3:05 p.m.
Approval of August 16, 2012 Minutes
Budget Update - (J. Higdon)
1.
Presentation of the ECC Estimated Ending Balance (four-page handout provided).
A.
Adjusted Estimated Ending Balance as of August 14 for 2011-12 = $20,334,590 which included adjustments remaining to be made in fire tech, student accounts receivable, parking fund and insurance fund totaling $180,000
1.
Fire Tech: adjustment of 139.4 FTES for year 2010-11.
2.
Student Accounts Receivable: increase of $370,000 - an estimate of 60%
3.
Parking Fund Balance: tickets and live scan revenue has decreased for various reasons. Examine adjustment to daily permits and ticket fees.
4.
Property Liability: a large transfer was previously made leaving some monies in the account but releasing $930,000 back into the ending balance of June 30,
2012.
5.
There was an incorrect posting by the county to our budget which could result in an increase of approximately $771,000. This facilitated some further review to the state apportionment and county postings – these are positive assumptions.
6.
Budgeted revenues were reduced by $7.3 million pending the November election. The RDA (redevelopment allocation) issue remains to be the most troublesome. (Page 1).
7.
The insurance fund is a combined number that will be discussed in the blue book.
B.
Items for placement into the blue book that are not currently in the tentative budget is as follows:
1.
A potential increase of state apportionment of approximately $2 million.
2.
Potential for a large mid-year TRAN (Tax Revenue Anticipation Notes). This might provide potential income if interest rates remain low.
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3.
A transfer for Bookstore employees - due to various reasons including decreased sales.
4.
The parking fund and possible changes to cover undetermined expenses of
$288,458.
5.
An added $240,000 expense due to increased insurance costs in January.
6.
An additional transfer of $225,000 may be needed in support of the Child
Development Center.
7.
Previous election costs came in much higher than estimated. The county has estimated that the November election costs will be $458,000.
8.
A community information (public relations-fund 12) transfer of $50,000.
9.
These added changes (Page 2) will positively impact the 2012-13 final budget by approximately $988,542.
10.
Discussions – Bookstore employees are an expense since they would be moving into the unrestricted budget. Bookstore costs are commonly in a restricted fund. The estimate included salary and benefits for those employees. Ten months refers to ten months of activity. Discussions regarding details of the employees are still ongoing. A transfer of $50,000 will be made for the general public relations fund.
C.
Continued impact on the 2012-13 tentative budget. The June 30 tentative budget book should be used in the current review of the budget reflecting an ending balance of $14,648,000. Items under negotiation ($2,560.000) will be removed from the 2012-
13 final budget. The President will be making a recommendation to the board that proposals for the reductions in salaries and furloughs will be removed from the 2012-
13 year. This removal will have a negative impact on the ending balance for that amount. This is in effect regardless of what happens in the November election. The tentative ending balance for 2012-13 year as listed on page 3 is $14,799,695.
D.
Including the negotiated items the district’s unrestricted general fund ending balance will have a reduction of $690,000. There is also an additional reduction of $837,571 due to a final adjustment of the ending balance – disclosed changes and dissolution of the contingency language. If an additional $771,000 comes in from the county, then that would offset a majority of the $837,571. This would leave the district with a reduction of approximately $50,000 plus the $690,000.
2.
Standard and Poor’s has downgraded their view of El Camino College bonds but kept the bond rating. El Camino College is preparing to sell the next series of bonds - $180 million-
Refunding/Refinancing Series B of $64 million.
3.
Planning for the 2013-14 budget year is approaching. Divisions should allow faculty enough time to give their input to division program plans prior to leaving for winter 2013. There might be a possible change in the timeline for completion of program and unit plans to allow faculty a greater opportunity to make contributions to the plans.
Final Budget 2012-2013 – Dr. Tom Fallo
1.
Presentations
Appreciation was expressed for the operation and work that the committee has done this year. A handout was given showing the information on a presentation which was given to the board about the bond.
A.
Bond Update - All the bonds sold for El Camino College were in high demand and oversubscribed. One thing in El Camino’s favor is the college has a very good
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tax base. It was important to show the ratings agency that we have kept with positive changes.
B.
Historical information was presented on the annual tax rate of our outstanding GO
Bond (page 6 – handout). One of the selling points presented was that the college has one of the lowest tax rates for the repayment of the GO Bonds amongst the
Community College District in Los Angeles County. This is based on tax per
$100,000 assessed evaluation. Based on financing if the future bond extension is passed, we anticipate on being in the middle at $24 per $100,000 assessed evaluation. Another important point presented was the service area showing a positive mix of good residential and good commercial areas we have in the community. This is a good balance which is very important.
C.
A larger fund balance was developed based on uncertainties at the State level. The effect of this can be seen in our ending balance of 2012 which shows a reduction in the El Camino College budget by $5.145 million. We built our reserve up to
$23 million showing the raters a strong fund balance. It is anticipated that for the
2012-13 year we will have to utilize these monies. The district projected budget impacts during the 2011-12 budget year totaling $9.9 million. All but $655,000 the district had budgeted or prepared.
D.
The fiscal projection for this current fiscal year will show the State is projecting a reduction of $5.3 million, but the district is estimating it to be $7.3 million. The college anticipates more triggers and surprises forthcoming throughout the year.
E.
Standard and Poor’s rating for us was AA and stable. For our new rating we maintained the AA but with a negative outlook due among other factors to the fact they felt that we will have less ability to back the bond over time. Moody’s rating was unchanged @ Aa1-stable.
2.
Overview of the Budget
A.
The ending balance of the final budget for last year came in higher than expected.
The unaudited ending balance for 2011-12 is $21 million. The final budget for
2012-13 is based on the initiative not passing, as advised.
B.
The effect on FTES at the State level is unclear if the initiative fails. The college is well positioned in case the initiative fails. If the initiative doesn’t pass the state will lower the cap for the college by 7.3% and approximately 13,000 FTES. The district remains uncertain as to the effect on FTES and students if the initiative fails. The board passed a motion to eliminate winter 2014 but keep winter 2013 if the initiative doesn’t pass. Winter for 2013 is about 50 classes.
C.
Over the last five years we have had 20% of the sections down, 14% of the FTES down because the college was over cap, and 10% of the funding down. The funding has been cut over that period of time. If the initiative passes we would have the money available and would add the money back into the budget. We already took away the cuts below the line referring to negotiations. Total budget is $426,000 million.
D.
Re-negotiations of the contract with Compton Community College are currently on-going. El Camino College currently receives $500,000 from Compton.
Compton needs to keep their full funding because El Camino gets the money they need from the State. But for this year it is budgeted that we will keep the money.
E.
A recommendation will be made to the board to take fund 17 and the monies which fall outside of that fund ($3 million) and make an irrevocable fund. El
Camino College needs to be positioned for three years. The irrevocable fund will drop our budget obligation in the long run. The college will see a savings within a few years. The monies are in two funds of $11.2 million and 3.8 million for a
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RKN/lmo total of about $15 million. After a year’s worth of actual activity and the actual investment is obtained (the next year - 2013-14) we would be able to reduce our insurance costs. The accreditation commission now is stating that every college’s finances must be in order. One thing they are looking at is the post-retirement benefits. Once the fund is established, it should pay for those retired.
F.
In reviewing the ending balance (page 3), it turns out better than anticipated. The college expected the budget to go down to $16 million, but it ended up only going down to $21 million.
G.
In looking at what has transpired over the last few years with principle apportionment (actual), it has decreased over the last year by $10 million. In the worst case scenario, it would go down another $8 million. The college cannot continue to show the legislature that we can operate on fewer dollars.
H.
Footnote i (page 4) characterizes transfers from other funds to the general fund. If the general fund wasn’t supported, it would have a much lower ending balance.
These funds will continue for five or six more years.
I.
The college budgeted more than they expended. It brought down those expenditures listed. Staff benefits were not able to be reduced due to cost increases. An amount of $458,000 has been budgeted for the upcoming election based on county estimates. The district had actual revenues of $103 million and expended $105 million.
J.
Discussion on enrollment fees (page 74). Looking at the change from 2011-12, there was a substantial increase as a result of higher student enrollment fees. The monies collected actually goes into a revenue limit calculation.
K.
The district plans to create an irrevocable fund. Budget assumptions are listed on page 71. It can be made into a narrative for explanation. A strong reserve is important and must carry us through at least two years - 6% is the district’s designated reserve.
L.
The importance of the five-year chart was referenced. As well as its role in the accreditation report. A comment was made on the clarity of future announcements in regards to the budget.
M.
A comment was made and discussion ensued as to the role of the committee in helping clarify and understand budget explanations. Additional discussion ensued about maintenance and operations for new or future construction.
N.
The committee was made aware that the five-year budget assumptions will be presented at the next meeting.
O.
Alice Grigsby was appointed the management/supervisor committee position,
Irene Graff was appointed as the alternate.
P.
There was consensus for the recommendation to the president of the 2012-13 final budget.
3.
Adjournment
The meeting ended at 4:10 p.m. The next meeting is scheduled on August 30, 2012 in
Adm 131.
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