Desert Community College District Adopted Budget Update John - - PowerPoint PPT Presentation

Desert Community College District Adopted Budget Update

John Ramont, Director, Fiscal Services September 15, 2017

Budget Update – September 2017

“The budget information you hear today is likely to change tomorrow”

Lisa Howell

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Budget Update – September 2017

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“My problem lies in reconciling my gross habits with my net income.”

Errol Flynn

• The economy is holding steady, making for a good state budget
• Revenues are still increasing, but much more slowly
• Inflation is expected to rise modestly

− COLA was adjusted upwards slightly to 1.56% from 1.48%

• California unemployment holding around 4.9%
• Prop 98 (K-14 funding guarantee) increases $2.6 billion
• Continued eye towards inevitable recession

2017-18 State Budget Highlights

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Budget Update – September 2017

• Augmentations for Community Colleges

– $382 million for apportionments – $20 million for Innovation Awards (1 time) – $25 million increase for Full-Time Student Success Grants (Cal Grant supplement) – $76.9 million for maintenance/instructional equipment – $150 million one-time to develop “guided pathway” programs – $25 million for CCC Completion Grant Program – $10 million for access to learning management system – $6 million one-time to develop an integrated library system

2017-18 Budget Features

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Budget Update – September 2017

Thoughts on 2017-18 State Budget…

• Budget continues to reflect stability and growth in education funding

− Economic Expansion has lasted 8 years - beware

• Overall, a good budget for education

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Budget Update – September 2017

Economic Considerations

• Most community colleges are facing declining enrollment
• Demand diminishes with economic improvement
• COD has been growing at an extraordinary pace

− We have been able to get all of our growth funded − We have the opportunity to gain middle college status − We expect to achieve Center Status at Indio in Nov 2017 (more $) − We have grown our faculty and staff − plEDGE is shaping up to be a significant factor to our growth

• We are the envy of the State!

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Budget Update – September 2017

Budget Cycle

College Budget Adoption State Budget Adoption College Annual Financial Report Governor’s Proposed Budget Governor’s May Revise

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2017-18 Budget Calendar

 Governor’s Proposed Budget. . . . . . . . . . . . . . . January 10th  Budget Sub-Committee Meeting . . . . . . . . . . . February 13th  Budget Sub-Committee Meeting . . . . . . . . . . . March 13th  Budget Sub-Committee Meeting . . . . . . . . . . . . April 24th  Governor’s May Revise . . . . . . . . . . . . . . . . . . . May 15th  Budget Sub-Committee Meeting . . . . . . . . . . . . May 22nd  Budget Committee Meeting . . . . . . . . . . . . . . . . June 12th  COD Tentative Budget Adoption . . . . . . . . . . . . . June 15th  State Budget Adoption . . . . . . . . . . . . . . . . . . . . . before June 30th Final Budget Adoption . . . . . . . . . . . . . . . . . .. . . .September 15th

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Budget Update – September 2017

Budget Committee Members

Lisa Howell, Chair VP Administrative Services

• Dr. Joel Kinnamon

College President

• Dr. Ralston, Dr. Nery, Dr. Gularte

Vice Presidents (Student Learning & Success, HR) John Ramont Director of Fiscal Services

• Dr. Kelly Hall

Dean

• Dr. Carl Farmer

Academic Senate President Denise Diamond CTA

• Dr. Catherine Levitt

CODAA Lauro Jimenez CSEA Linda Costagliola Confidential TBD Student Representative

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Budget Update – September 2017

2014-15 Adopted 2015-16 Adopted 2016-17 Adopted 2017-18 Adopted Statutory COLA .85% 1.02% 0.0% 1.56% Funded Growth (Actual Over Prior Year) 7.4% 14.6% 0.9% 6.0% Lottery – Base unrestricted $128 $140 $144 $144 Lottery – Prop 20 restricted $34 $41 $45 $45 Revenue Shortfall 1.5% 1.5% 1.5% 1.5% STRS Employer Rate 8.88% 10.73% 12.58% 14.43% PERS Employer Rate 11.771% 11.847% 13.888% 15.531%

Assumptions used are based upon the Governor’s Proposed Budget

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Budget Update – September 2017

COMBINED FUND 10 2015-16 Actuals 2016-17 Unaudited Actuals 2017-18 Adopted Budget Revenues $71,877,901 $71,420,423 $78,741,924 Expenditures ($62,671,515) ($70,805,080) ($80,925,115) Surplus / (Deficit) $9,206,386 $615,343 ($2,183,191) Transfers/Contributions/Other Outgo ($2,205,691) ($1,141,894) ($1,193,806) Increase / (Decrease) to Fund Balance $7,000,694 ($526,550) ($3,376,997) Beginning Balance $9,670,409 $16,671,104 $16,268,113 Audit Adjustment $0 $123,560 $0 Ending Balance $16,671,104 $16,268,113 $12,891,115

A look at our Budget – past and present

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Budget Update – September 2017

UNRESTRICTED FUND 11 2015-16 Actuals 2016-17 Unaudited Actuals 2017-18 Adopted Budget Revenues $57,020,377 $55,881,291 $59,437,865 Expenditures ($49,014,069) ($55,728,786) ($60,762,289) Surplus / (Deficit) $8,006,308 $152,506 ($1,324,424) Transfers/Contributions ($1,065,300) ($822,827) ($690,752) Increase / Decrease to Fund Balance $6,941,008 ($670,322) ($2,015,176) Beginning Balance, (includes audit adjustment) $8,367,849 $15,308,857 $14,638,535 Audit Adjustment $0 $0 $0 Ending Balance $15,308,857 $14,638,535 $12,623,359

A look at our Budget – past and present

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Budget Update – September 2017

Unrestricted Restricted One-time On-going 6% Growth $2,170,293 Base Increase $1,383,172 COLA $777,379 Deferred Maint & Instr Equip $618,561 Full-Time Student Success Grant $119,340

COD Estimated New Revenues included in 2017-18 Budget

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Budget Update – September 2017

• Additional information and considerations:

− Our FTES settlement is complete, no further reductions! − Budget assumes:

• Indio Center status is achieved in 2018-19 ($1.2 million)
• Middle College status is achieved in 2019-20 ($1.2 million)

− Growth takes significant investment, and we’ve been investing!

• Lots of new faculty and staff

− Adopted Budget will reflect upward revision for FTES from 3% assumed growth to 6% − We’re facing a structural deficit that will have to be dealt with

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Budget Update – September 2017

RESTRICTED FUND 12 2015-16 Actuals 2016-17 Unaudited Actuals 2017-18 Adopted Budget Revenues $14,857,524 $15,539,132 $19,304,059 Expenditures ($13,657,446 ($15,076,295) ($20,162,826) Surplus / (Deficit) $1,200,078 $462,838 ($858,767) Transfers/Contributions/Other Outgo ($1,140,392) ($319,066) ($503,054) Increase / Decrease to Fund Balance $59,687 $143,771 ($1,361,821) Beginning Balance (Includes Audit Adjustment) $1,302,560 $1,485,807 $1,629,577 Audit Adjustment $0 $123,560 $0 Ending Balance $1,362,246 $1,629,577 $267,756

A look at our Budget – past and present

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Budget Update – September 2017

2015-16 Actuals 2016-17 Unaudited Actuals 2017-18 Tentative Budget Ending Fund Balance $15,308,857 $14,638,535 $12,623,359 7.5% Board Recommended Reserve $4,865,790 $5,396,023 $6,158,919 Appropriation for Contingency $8,861,552 $7,660,997 Reserve for Revenue (Budget) Shortfall $3,412,925 Reserve for West Valley Operations $350,000 Reserve for Bargaining $1,140,000 New Market Tax Credit $1,581,515 $1,581,515 $1,561,515

Fund Balance Components - Unrestricted

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Budget Update – September 2017

$0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

Historical Ending Fund Balance Trend

Unrestricted Restricted

Unaudited Actual Adopted Budget

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Budget Update – September 2017

Salaries and Benefits of categorically funded staff are not included 19

FT Faculty Salaries 22% Adjunct Salaries 15% Administrative Salaries 9% Classified Salaries 16% Statutory Benefits 16% Health Benefits 9% Materials and Supplies 1% Other Operating Exp 11% Capital Outlay 1%

2017-18 UNRESTRICTED TENTATIVE BUDGET

Budget Update – September 2017

2016-17 Unaudited Actuals 2017-18 Adopted Budget

Faculty Salaries 21.8% 21.8% Adjunct Salaries 15.0% 14.7% Administrative Salaries 8.9% 9.4% Classified Salaries 15.9% 16.3% Statutory Benefits 16.0% 16.2% Health Benefits 8.7% 8.5% Commitment to Staff 86.4% 86.9% Materials & Supplies 1.2% 1.3% Other Operating Expenses 11.2% 11.0% Capital Outlay 1.2% 0.9%

% of Expenditures Budget by Category

Budget Update – September 2017

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UNRESTRICTED GENERAL FUND 2012-13 Actuals 2013-14 Actuals 2014-15 Actual 2015-16 Actual 2016-17 Actual 2017-18 Budget Salaries and Benefits $30.8 $34.0 $38.1 $42.3 $48.1 $52.8 Total Expenditures (excluding

transfers)

$36.2 $40.0 $44.3 $49.0 $55.7 $60.8 % Committed 85.1% 85.0% 86.0% 86.3% 86.4% 86.9% In $ millions

Commitment to Staff Budget Update – September 2017

*2017-18 budget projects that all appropriated expenditures will be expended 21

• Bond Interest and Redemption Fund 21 (Riverside County)
• Child Development Fund 33
• Other Special Revenues (Student Kiosk) Fund 39
• Capital Outlay Projects Fund 41
• Bond Fund 43
• Self Insurance Fund 61
• Other Benefits Fund 69
• Student Representation Trust Fund 72
• Student Body Center Fee Trust Fund 73
• Other Post Employment Benefits Trust Fund 79

Other Funds Budget Update – September 2017

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Budget Update – September 2017

• Board set aside funds for future retiree medical benefits

liability – 6/30/17 Balance: $6.7 million

• Held in County Treasury: $3.8 million
• Held in Irrevocable Trust: $2.9 million
• Trust earned $351,417 in interest for 2017-18

– Annual rate of return: 11.94%

OPEB Trust Fund

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• Lots of good news with a measure of caution

− 2017-18 is a good budget year; however, revenue growth to the system is slowing − The 2017-18 Budget reflects a measure of deficit spending

• Unrestricted Ending balance is projected to decrease in

each of the next three years − Negotiations are in process and not yet settled

Final Thoughts on COD Budget

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Budget Update – September 2017