August 2, 2012

Planning & Budgeting Committee
Date: August 2, 2012
DeSanto, Michael – Campus Police
Natividad, Rory – Mgmt/Supervisors
Patel, Dipte – Academic Affairs
Quinones-Perez, Margaret – ECCFT
Reid, Dawn – Student & Community Adv.
Shenefield, Cheryl – Administrative Svcs.
Spor, Arvid – Chair (non-voting)
Moon, Derrick – ASO
Turner, Gary – ECCE
Widman, Lance – Academic Senate
OTHERS ATTENDING: Francisco Arce, Babatunde Atane, Janice Ely, Connie Fitzsimons, Alice
Grigsby, Luis Mancia, Jeanie Nishime, Emily Rader, Michael Trevis, David Vakil
Handouts: Facilities Master Plan questions; 2012-13 Chancellor’s Office Budget Workshop;
California Community College 2012-13 Deferrals; Chancellor’s Budget Workshop State Economic
and Fiscal Forecast (July 2012); 2013-14 CCC System Budget Request
The meeting was called to order at 1:10 p.m.
Approval of June 21, 2012 Minutes
1. Discussion took place about the cash flow threat. Accreditation teams want to see if colleges are
making contributions to Post Employment Benefits (GASB) versus pay-as-you-go. Accreditation
Commission produces annual fiscal report. They scrutinize districts for fiscal problems and
arrange for a fiscal team to possibly visit college. Fiscal issues are impacting many campuses.
Isn’t there some flexibility in meeting the Faculty Obligation Number because of State budget
constraints and lowering cap? FON was calculated at 352 in July and ECC just found out two
days ago it has been recalculated at 312.2 for Fall 2012. Still hiring even when FTES decreasing
within last three years? Maybe discuss further when J. Higdon is at next meeting to provide more
2. Correction on page 2, #5b – change “affect” to “effect.”
3. Student fees still at $46/unit. Comment was made that colleges do not receive extra funding from
fee increases yet some increase is shown in our proposed budget. The State funds college
apportionment total based on FTES calculation. The State funds the difference of the total minus
what college collects in student enrollment fees and from property taxes. Fee increases from
student fees are local revenue – the more collected locally, the less the State has to make up the
difference. Colleges receive less money when fees increase and BOG waivers increase. But if
colleges receive less in local enrollment fees, the State still makes up the gap, but not until
February of the next fiscal year.
4. Facilities Master Plan questions
a. Year built remains unchanged – HMC Architects does not change year if building was
refurbished; change made only for new buildings. ‘Additions’ column is where
remodeled date is listed (not shown on previous handout).
b. Building #9 (Health Center) contains rooms associated with PE/Gym. Station Totals are
places to accommodate students/persons (i.e. classroom, office, lab, chairs, etc.), counting
what makes the room “normal.”
5. Page 2, #8 - Ending balance is not yet known.
Budget Update (J. Ely/B. Atane)
Chancellor’s Office Annual Statewide Budget Workshop for Southern California
1. Eight different funding scenarios were presented. State budget was passed on time but estimates
fall short with possible mid-year trigger cuts. Anticipating the same next year.
2. Overall State expenditures = $91.3 billion assuming the November ballot initiative passes. In
January, budget gap was $9.2 billion; May revision gap revised to $15.7 billion. Trying to close
gap through spending cuts, tax initiative and shifting funds.
3. Sunny View: no base reductions (extra $8 million we receive each year above FTES calculation).
Hoping for $50 million in growth/restoration across all community college districts. Decrease of
deferrals. $330 million cut across all districts if initiative does not pass. Legislature rejected
Governor’s proposal to repeal SB 361 (how colleges are currently funded based on FTES). No
policy changes to categorical programs and no COLA for this year. Good Neighbor fee increases
do not affect ECC – affects colleges bordering other states attended by students from
neighboring states with no community colleges nearby. No longer reimbursed by the State for
filing mandated cost claims each year to track hazardous material abatements, student health
center fees, etc. Now have the option (decide by September 30th) to receive $28 per FTES for
compliance with mandates, a year-to-year choice. Held harmless for any shortages in RDArelated revenues.
4. Categorical funding same as last year – still need to notify State if we want to trigger flexibility
of moving monies from one categorical program to another. Student Financial Aid
Administration is the exception which increased to $71 million.
5. Community College Budget: general apportionment revenues = $5.5 billion (51% state, 42%
local property taxes, 7% student fees); categorical revenues = $411.3 million.
6. Two tax initiatives: Prop 30 would increase sales tax by ¼ % for 4 years and Prop 38 would tax
individuals in California who earn more than $250,000 a year for 7 years. However, cannot have
tax provisions of both; therefore the initiative with the higher vote total will win if both gain 50%
or more of the vote. Prop 38 would only fund K-12.
7. If Prop 30 does not pass: $6 billion in total cuts, $5.4 billion for K-12 and community colleges.
Potentially second year of trigger cuts; far more drastic in 2012-13. Lose $50 million in
growth/restoration. Lose $159.9 million in deferral buy down. Workload reduction of 7.3%.
8. Currently, polls show 51% voter approval for sales tax initiative. Normally receive $3 million
from State apportionment in July, but only received $300,000. Met cash flow obligations because
of TRAN. Received $8 million deferral payment on July 12, 2012 and another $8 million on July
19, 2012 – both part of 2011-12 funding. Should receive another $2 million in October 2012.
California Community College 2012-13 Deferrals (Statewide)
1. Shows State withholding money from January 2013-June 2013 to pay back in July 2013, if tax
initiative passes. If tax initiative does not pass, deferral amounts are larger. Most paid back in
July 2013, but $201,000,000 deferred in June 21013 is split for repayment between July
($72,000,000) and October $129,000,000.
School Services of California State Economic and fiscal Forecast
1. Economists say private sector might be adding jobs but the public sector (including education)
continues to shrink. In order for education to see a turnaround, private sector employment must
rebound more strongly to generate additional tax revenue for the State and funneled back to
schools. Economy is growing slowly. Little progress made on employment nationally. GDP is
down – worried about economic crises in Europe. California’s economy is growing more slowly
due to home foreclosure problems.
2. Legislature approved of issuing state bonds for the California bullet train. UCLA study of
Japan’s bullet train concluded project did not stimulate the local economy there. Do not believe
California project will lead to 450,000 jobs as promoted.
3. California continues to be ranked worst state (50th) in the nation for business.
4. State General Fund Budget Summary – hoping for $948 million in reserves at the end of the year
if voters approve sales tax initiative.
5. Governor’s tax initiative is biggest risk to the State Budget. Latest Field Poll shows 54% in
support of initiative and 38% opposed. The Legislature’s approval of high speed rail project
could threaten the tax initiative with voters less inclined to support raising taxes to support the
6. Prop 98 originally promised source of stable and adequate resources for K-14, reduce class sizes
and establish a minimum base of funding. Now it’s being adjusted and targeted by the
Legislature and Governor.
7. Negotiations Process flowchart – refers to various colleges that may have to reopen negotiations.
Process takes a minimum of four months which will affect reactions to trigger cuts.
2013-14 CCC System Budget Request
1. Chancellor’s Office created budget workgroup that decided categorical restoration and COLA
(cost of living allowance) top priority and voiced support for enrollment growth/restoration and
for instructional equipment and library materials funding. Requesting additional $600 million $200 million for categorical restoration, $200 million for COLA, $120 million for
growth/restoration and $80 million reduction in deferrals.
Rory Natividad will be the new PBC chair starting at the next meeting.
The next meeting is scheduled on August 16, 2012.
The meeting ended at 1:50 p.m.