BUDGET BOOK

Transcription

1 BUDGET BOOK

2 BUDGET BOOK Presented to the Board of Trustees for Adoption September 11, 2012 Office of Business Services Chris Yatooma, Vice President of Administrative Services Kerri Hester, Director of Finance

3 September 11, 2012 TO: FROM: Board of Trustees William Duncan, Superintendent/President District Leadership Chris Yatooma, Vice President of Administrative Services Kerri Hester, Director of Finance SUBJECT: Adopted Budget This memo introduces the Adopted Budget for In June, the Board approved a tentative budget for At that time, three key uncertainties existed related to the fiscal year. One, the state had not adopted its budget. Two, the District still had yet to close the fiscal year books. Three, the Governor s ballot initiative was still not finalized for placement on the November ballot. Two of the three uncertainties no longer exist. The state enacted its budget and Proposition 30 is slated for voter consideration in November. The District s books are 99% closed with the unaudited yearto-date actuals shown in this document. Unfortunately, even with these items settled, there are still many concerns and reservations. State Revenue Outlook The state budget, enacted in late June 2012, closes the identified $15.7 billion funding gap with a combination of spending reductions ($8.3 billion) and revenue increases ($8 billion). Most of the revenue increases will be generated from Proposition 30, which raises the state sales tax by one-quarter of a cent and raises the state s personal income tax rate for Californians with annual incomes of $250,000 or more. The ability of the state to maintain state funded programs and services, including funding for community colleges, at the prior year levels, is predicated on passage of the November initiative. District Revenue Outlook The recently enacted state budget for colleges remains a tale of two budget scenarios with the District s funding fate tied to Proposition 30. If the ballot measure passes, the District can expect a $660,000 increase in revenue over the year and an additional 146 Full-Time Equivalent Students (FTES). If the ballot measure fails, the District forecasts a $4.8 million decrease in revenue and a 1,058 FTES reduction. The District s base FTES equals approximately 14,400. The District s Adopted Budget takes a conservative budget approach and is built on a worst case scenario where the ballot measure fails. Reserves In June 2012, the Board of Trustees approved a tentative budget using $5M in reserves for the budget year. District Ending Reserve Balances: $14.3 million (15.5%) - Actual $14.1 million (16.2%) Actual $14.1 million (16.1%) Projected under Best Case scenario $9.5 million (10.9%) Projected under Worst Case scenario Implications, Risks and Need for Action

4 Regardless of the success or failure of Proposition 30, we need to recognize that on-going expenditure reductions are a reality under either scenario. The only difference between passage or failure of 30 is in the magnitude and timing in which the cuts must be achieved. In , the District decided to take a balanced approach to address the series of reductions and spread the declines over multiple years. The plan proposed using the strong reserves to lessen the impact of cuts. This would afford the time to evaluate core services and make strategic decisions about reductions and protect the integrity of instructional programs to the best extent possible. Again, in a combination of cuts and use of reserves will occur. However, the ability of the District to absorb unexpected mid-year deficits is diminishing, and the window of time required to address these cuts is closing. These expenditure reduction decisions are looming over the District and must be addressed over the next year. Sincerely, Chris Yatooma Vice President of Administrative Services 5000 Rocklin Road, Rocklin, CA (916)

5 GENERAL FUND BUDGET FOR ADOPTION

6 BUDGET ASSUMPTIONS UNRESTRICTED GENERAL FUND REVENUE ASSUMPTIONS 1.) Proposition 30 tax increase does not pass 2.) System-wide Mid-Year Funding Reduction: ($338M) 3.) Budgeted District enrollment: 13,342 4.) COLA (0%): $0 5.) enrollment growth at State level 0% 6.) Deficit Factor on State Funding - Property tax (1%): ($660K) 7.) Additional mid-year Workload Reduction from State: ($4.8M) 8.) BFAF 2% Admin Fee increase: $118K 9.) Lottery Revenue decrease: ($189K) 10.) Mandated Cost Grant Block Funding ($28 x 13,342) $374K 11.) Enrollment Fee: $46/unit EXPENDITURE ASSUMPTIONS 1.) Budgeted salary increases / COLA $0 2.) Step/Column adjustments (full-time employees) $374K 3.) Longevity adjustments (full-time employees) ($41K) 4.) Health insurance premiums stable (same as ) $0 5.) PERS rate increase (10.923% to %) $87K 6.) Unemployment insurance decrease (1.61% to 1.1%) ($189K) 7.) Worker's Compensation rate stable (same as ) $0 8.) Seven (7) furlough days Classified and Management ($625K) 9.) Retiree Medical Benefit Increase (4.5%): $170K 10.) Operating costs increase (rent/utilities/election/insurance) $582K 11.) Schedule Reductions ($1M) 12.) Unrestricted Contingency: $600K

7 RISKS AND OPPORTUNITIES UNRESTRICTED GENERAL FUND 1.) The fiscal year's books have not been audited as of the date of this package presentation. The beginning unrestricted general fund reserve balance will could increase or decrease due to unanticipated but potential audit adjustments. The beginning unrestricted general fund reserve balance is the best estimate of what the ending balance will be but could be higher or lower if there are audit adjustments. 2.) The Omniparty balances are as of June 30, 2012 but include a reduction for the SCFA payout that occurred in August These balances could increase or decrease due to compensation formula negotiations taking place in the fiscal year. 3.) Proposition 30 passes. If it passes, forecasted revenue will increase by $5.5M ($5.4M in apportionment, $147K in lottery revenues and $33K in mandated block grant revenue, reduced by $47K in deficit factor) 4.) The deficit factor is currently forecasted at.99, which reduces base revenue by ~$660K. The actual deficit factor could change resulting in additional revenue or a reduction current projected revenues. 5.) The District currently owes the State approximately $400K for previously denied mandated health cost claims. The mandated cost block grant estimates at $374K could be reduced or eliminated due to the amount owed to the State. 6.) Approximately $600K in unrestricted contingencies included in forecasted expenditures might not be needed. 7.) Departments with unspent budgets at year end could increase the ending fund balance. Unrestricted general fund budget balances do not roll into the next year. 8.) Overall forecast risk/opportunities from unforeseen events.

8 BUDGET FOR ADOPTION ALL FUNDS

9 HISTORICAL DATA

10 GENERAL FUND REVENUE THROUGH

11 GENERAL FUND EXPENDITURES THROUGH

12 UNRESTRICTED GENERAL FUND FINANCIALS THROUGH

13 GENERAL FUND HISTORICAL RESERVES THROUGH

14 CHARTS AND GRAPHS

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18 CAPITAL PROJECTS FUNDS

19 CAPITAL PROJECTS FUND FINANCIALS THROUGH

20 CAPITAL PROJECTS FUND ENDING FUND BALANCE DETAIL

21 OTHER FUNDS

22 TAHOE-TRUCKEE CENTER SFID (#1)

23 NEVADA COUNTY CENTER SFID (#2)

24 RESIDENCE HALLS Observations and Plans: 1.) The COPS debt that was refinanced in included debt for the Residence Halls. Due to the interest rate reduction from 4.68% to 1.94%, the Residence Hall portion of the COP debt has declined by ~$36K for through its final payment in fiscal year ) Not all expenses of the Residence Halls have been charged back to the fund, such as their portion of grounds and parking lot maintenance. These costs will be allocated to the Residence Halls starting with the fiscal year.

25 STUDENT CENTER FEE TRUST

26 STUDENT FINANCIAL AID TRUST

27 OTHER POST EMPLOYMENT BENEFITS (OPEB) TRUST

28 ASSOCIATED STUDENTS (CLUBS)

29 UPDATE ON CERTIFICATE OF PARTICIPATION LOANS

30 CERTIFICATE OF PARTICIPATION REFINANCE UPDATE

31 1998/2004/2007 VS COP PAYMENT SCHEDULE COMPARISON