SAN FRANCISCO COMMUNITY COLLEGE DISTRICT BOOKSTORE AUXILIARY 50 PHELAN AVENUE SAN FRANCISCO, CA

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1 SAN FRANCISCO COMMUNITY COLLEGE DISTRICT BOOKSTORE AUXILIARY 50 PHELAN AVENUE SAN FRANCISCO, CA Regular Meeting BOARD OF DIRECTORS OF THE SAN FRANCISCO COMMUNITY COLLEGE DISTRICT BOOKSTORE AUXILIARY Ocean Campus MUB 240 December 10, 2013 Time: 4:10 pm Minutes I. Roll Call. - Director Villicana was absent; all other directors were present II. Approval of Agenda - approved III. Approval of Minutes October 22, 2013 (Approved 6-0) IV. Bookstore Presentation Robert Gibson, Bookstore Manager (notes attached) V. Auxiliary Financial Report and Investments Discussion Don Newton, Executive Director (report attached) VI. Action Items approved BA1: Accepting the OPEB Report (Approved 6-0) BA2: Extending the term of the Executive Director through December 31, 2014 (Approved 5-0-1) VII. General Public comment VIII. Board Members comments and reports IX. Scheduled next meetings to be on February 11 th & May 6 th. X. Adjourned at 4:55 pm BOARD OF DIRECTORS RON GERHARD, PRESIDENT JOHN BILMONT DON NEWTON DR. NICHOLAS (NICK) AKINKUOYE WENDY OWENS OSCAR PEŇA TERESA VILLICANA

2 Since we last met: 1) Faculty & Staff Appreciation Days 11/19 & 20 2) Flash Sale on 11/21 3) Provided prizes for We Are CCSF Day attendees 4) Gave the Annex a facelift 5) Overwhelming # of applications for scholarships Coming Up: 1) Friends and Fans sale 12/11 & 12 Karen will explain more 2) Gearing up for buyback 3) Gearing up for spring rush 4) Preparing for graduation online ordering Grad Fair 4/23 & 4/24 Robert Gibson District Director Tel: Fax: Voice Mail: ext Follett Higher Education Group City College of San Francisco Bookstores 50 Phelan Avenue, San Francisco, CA rlgibson@follett.com

3 Resolution BA1 Acceptance of the OPEB Report Other Employee Post retirement Benefits (OPEB) Report The bookstore has an obligation to pay the Health Care premiums for the employees who have retired. Currently there are 2 current bookstore employees who expect to retire from the California Public Employees Retirement System (CalPERS) before September 30, 2015 and there are 12 former and current bookstore employees who are already retired from CalPERS. All 14 persons are receiving health benefits from CalPERS paid for by the Bookstore Auxiliary. This OPEB report tells us that the total lifetime cost to the Auxiliary for this obligation is about $2,750,000. Since the Auxiliary continues to generate revenue we can pay this amount over time. However, we must report the obligation as part of our annual financial statement, updated every two years or so. The current budget allocates a total of $147,000 in current benefit costs which is paid to CalPERS and is called pay as you go. The current budget also shows $125,000 as an amortization in order to begin recognizing the future obligations. However there is no requirement to create a separate trust fund. The contract with Follett has a potential to continue for ten years. In determining whether or not to outsource the bookstore the board determined that the OPEB obligation must be met. An annual budget which includes the actual health benefits cost plus $125,000 would amortize the OPEB in 10 years. This amount was included in the current year budget. The obligation should be reviewed with a new report during FY 2016 after all Auxiliary employees have retired from CalPERS. Fiscal Year Pay as you go Amortized Total OPEB , , , , , , , , , , , , , , , , , , , ,000 2,974,515 The complete OPEB report, in draft form, is available on the Bookstore Auxiliary web page. The Bookstore Auxiliary web page is found under Employee Services within the District Business Office web pages. services/district business office/bookstore auxiliary.html

4 SFCCD Bookstore Auxiliary Financial Report Novemebr 30, 2013 Balance Sheet Assets Cash in Bank 947,000 Accounts Receivable 11,285 Inventory 9, ,275 Liabilities Accts Payable 264 Gift Cards 10,960 Workers Comp Fund 100,000 Vacation & Sick Vested 79, ,408 Net Reserve Fund Balance Nov 30, 2013 $777,867 $777,867 Amounts are approximate Notes Cash investments are being considered to determine the best way to safely invest cash reserve while maximizing income from that reserve The reserve Fund is needed to cover certain and potential future operations. 1. The Post Retirement (OPEB) obligation must be satisfied. 2. The Follett contract contains termination clauses that may need to be funded Ron Gerhard, John Bilmont, and Don Newton will continue to research investment options that best fit the needs based on these criteria. Details of Auxiliary Revenue and Expenses through November are on page 2 Page 1 of 2

5 SFCCD Bookstore Auxiliary Income & Expense Report Novemebr 30, 2013 Actual Through Novemebr 30 Projected to June 30 Acct # Account Name Budget Revenues 8843A Commission on Bookstore Sales 595, , Other Local Revenues 1, Employee Wages 2110 Classified Full Time 125,000 51, Classified Part Time 38,000 16, Classfied Salary Recovery from Follett 125,000 55, Payroll Taxes & Employee Benefits 3201 Retirement Contribution 15,000 5,398 15, Social security Tax 1,250 1,901 1, Medicare Tax 12,500 1,993 12, Auxiliary employee health Plan 35,000 15,362 35, Dental Plan 3, , Life Insurance Post Retirement Medical 112,000 47, , Post Retirement Future Amortization 125, , Benefits Expense Recovery from Follett 80,000 28,252 80,000 Cost of Sales 4202 Bookstore 2013 cost of goods sold ,000 Other Operating Expenses 4311 BKST Office Suppl (BSTORE ONLY) Dues and Memberships 1, , Other Consulting 5,000 1,100 2, Postage Water/Sewage 15, , Gas/Electricity 0 1,696 5, Telephone 3, , Housekeeping 5,000 3,391 10, Legal Fees 4, Operating Expenses Recovery from Follett 23,000 5,454 23, Bad Checks Bank Service Fees 3,000 1,311 3, Other Expenses 300 2,732 3, Governmental Fees, Taxes & Licenses Board of Trustees Mandared Transfer 7310 Transfer out VC Student Services 77,000 77,000 77,000 Total Expenses , ,650 Total Revenue , ,000 Net Income (reveue less expenses) $241,550 $91, ,350 Sales Commissions in FY 2014 may be as much as $100,000 below budget. Cost of Sales entry is due to inventory on hand that may not be sold Page 2 of 2