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North Orange County Community College District

North Orange County Community College District. 2010-2011 Proposed Budget. Introduction. State Budget Impasse Assumptions primarily based on Governor’s May Revise Cash Flow Concerns State’s Structural Deficit Continues Current projection is $17.9 billion

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North Orange County Community College District

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  1. North Orange County Community College District 2010-2011 Proposed Budget

  2. Introduction State Budget Impasse Assumptions primarily based on Governor’s May Revise Cash Flow Concerns State’s Structural Deficit Continues Current projection is $17.9 billion NOCCCD ongoing Deficit of $2.3 million includes: $2.5 million general apportionment deficit $3.2 million of non-faculty vacancies

  3. Introduction • NOCCCD Priorities • Address potential for unfavorable State budget • Potential mid-year budget reductions • Address the ongoing deep categorical budget reductions • Increased Enrollment Demands • Negotiations/Staffing levels • Completion of Construction Projects • Retiree Benefits

  4. Categorical Programs – 2009-10 • On average, many categorical programs received ongoing cuts of approximately 40 - 50% • One-time ARRA Backfill received of approximately $800,000 • Additional one-time District contribution given of approximately $1.3 million

  5. Categorical Programs – 2010-11 • Despite reductions made in 2009-10, several programs continue to have personnel costs in excess of State allocations • Estimated Unrestricted General Fund encroachment for 2010-11 of approximately $1.5 million – provided as one-time backfill for 2010-11 by campuses and District • Further discussions are necessary • Campuses continue to apply for new grant opportunities • Potential for $5 million System-wide one-time backfill

  6. Full-Time Equivalent Students (FTES) • 2009-10 Actual FTES – 38,702.01 • 4,004.84 FTES above target level • 2009-10 Funded FTES – 33,111.44 • Resulted in 5,590.57; 16.88% of Actual FTES Unfunded • 2010-11 Targets established at 34,780.17 – essentially the same target levels as 2009-10 • Cypress College – 11,030 • Fullerton College – 17,498 • SCE – 6,252.17

  7. FTES • 2010-11 Target projects 1,668.73; 5.04% unfunded FTES • Generating FTES above Target is Ideal…Without additional costs

  8. FTES Trends

  9. Full-time Faculty Obligation • 2010-11 Estimated Obligation – 529.8 • Reinstated 14 of the 40 vacant positions eliminated from the budget in 2009-10 • Projected to be right at obligation for 2010-11 • Depending on the outcome of the State budget, obligation may change for 2011-12 • No plans to fill vacancies beyond those needed to meet the obligation

  10. Ending Balances June 30, 2010

  11. Ending BalanceBoard Policy Contingency • Board Policy 6200 requires that unrestricted general reserves shall be no less than 5% of unrestricted general fund expenditures Unrestricted General Fund Expenditures $206,385,831 Contingency level 5% Board Policy Contingency $ 10,319,292

  12. Ending BalanceBoard Discretionary Contingency • Board Discretionary Contingency of $4,475,453. Primarily consisting of: • $2.3 million apportionment deficit below budget • $465 thousand Medicare Part D Subsidy • $460 thousand Lottery proceeds in excess of budget • $846 thousand Utility Savings (actual expenditures below budget)

  13. Ending Balance - Districtwide Carryovers • Districtwide carryovers of $6,608,327: • Master Plan - $133,600 • Facility emergency - $130,000 • Safety supplies budget - $157,572 • Information Services infrastructure budget - $3,751 • Staff development - $200,000 • Election expense - $525,000

  14. Ending Balance - Districtwide Carryovers • Districtwide Carryovers (cont.): • Supplemental Retirement Plan - $137,404 • Scheduled Maintenance contribution - $1,600,000 • Categorical contribution - $1,000,000 • Self-Insurance contribution - $1,221,000 • Retiree Benefit contribution - $1,500,000

  15. Budget Center Carryovers

  16. Apportionment Revenue – SB 361 The 2010-11 Proposed Budget contains no provision for 2.2% Growth funding – approx. $3.2 million

  17. Revenues – Other • Lottery - $3,999,720 • $4 per FTES increase from prior year • Part-time Faculty Comp. - $996,501 • Fee Waiver & Enrollment Fee - $322,051 • Non-resident Tuition - $1,000,000 • Interest - $500,000 • Rates estimated at 0.73% (0.62% decrease from prior year) • Miscellaneous Income - $10,000

  18. Expenditures • Salaries - $3.1 million increase • Step and Column increases and Reinstatement of 14 full-time faculty – approx. $1.3 million • Medical Costs – 7% average increase – approx. $894,000 • PERS rate – increase from 9.709% to 10.707% - approx. $600,000 • SUI rate – increase from 0.30% to 0.72% - approx. $363,000 • Retiree Benefits – $5,049,143 per actuarial study • Extended Day Budgets – decreased by approx. $290 thousand: • Adjusted for reinstated full-time faculty • Adjusted for minor change in FTES target

  19. Expenditures • Energy Costs – $3.8 million – net savings approx. $472,000 • Reflects a net decrease due to decline in energy prices • Reflects a net savings due to Cypress Cogen • Factors increased costs for new facilities • Child Care Program Contribution - $167,063 • No ongoing contributions for Retiree Benefits or Self Insurance • No ongoing budget for Scheduled Maintenance contribution

  20. Ongoing Revenues & Expenditures

  21. Outstanding Issues • Salary Negotiations • Each 1% increase for Unrestricted General Fund positions is estimated at $1,024,049 • Each 1% increase for Extended Day positions is estimated at $218,442 • No assumptions made for furloughs or salary roll-backs for 2010-11 • Temporary Suspension of $1.5 million Retiree Benefits Fund Contribution • Unpaid Balance as of June 30, 2010 - $12 million

  22. Outstanding Issues • GASB 45 - Unfunded Retiree Liability • $166.1 million unfunded liability • $12.4 million Annual Required Contribution (ARC) • $4.8 million in pay-as-you-go costs (2009-10) • Unfunded ARC of $7.6 million • $50.6 million set aside in Retiree Benefits Fund • $5.0 million budgeted pay-as-you-go cost (2010-11) • General Apportionment Deferrals • Cash Flow Concerns • Interest Income directly impacted

  23. Outstanding Issues • Further decisions needed on deep ongoing cuts to categorical programs • Personnel costs in excess of State Allocations • One-time backfill provided, pending further discussions • Uncertain outcome of 2010-11 State Budget • 50% Law concerns • Necessary Budget Reductions • Categorical Contributions • Increases in PERS and STRS employer contribution rates could have a significant fiscal impact on future budgets

  24. Current Reserves • Board Policy Contingency - $10,319,292 • Board Discretionary Contingency - $2,126,834: $ 4,475,453 As of June 30, 2010 (2,348,619) Ongoing Deficit $ 2,126,834

  25. Questions? 2010-2011 Proposed Budget

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