2005-2006 ADOPTED BUDGETPublic HearingAugust 29, 2005 Mike Brandy, Vice Chancellor, Business Bernata Slater, Director, Budget Operations
Tentative Budget Assumptions STRS increased by $900,000 Equalization increased by $1,700,000 Enrollment estimated at 32,022 FTES PERS rate set at 9.9% Adopted Budget Assumptions No increase to STRS expense Equalization set at $1,200,000 Enrollment set at 31,333 FTES PERS rate set at 9.1% (expense reduction of $240,000) Increased Interest Revenue by $450,000 Increased Lottery Revenue by $275,000 Major Changes in Assumptions from Tentative to Adopted Budget
Review of 6/30/05 Ending Balance • The 6/30/05 ending balance is $15,752,953, which will be used as follows: • $7,870,000 to maintain district 04/05 budgeted 5% reserves • $3,426,525 for college/central services carryover • $421,037 for encumbrances carryover • $422,381 for districtwide carryover (negotiated contract items, election expense, etc.) • Undesignated 04/05 ending balance = $3,613,010
Where are we now for 05-06? • Current Expenses vs. Current Income • Income = $157,738,384 • Expenses = $155,855,807 • Difference = $ 1,882,577 • Add One-time transfer in From Medical Benefits Fund (Fund 61) = $850,000 • Total Difference=$2,732,577
Major Revenue Assumptions • State Revenues • Cost of Living Adjustment from the State increased revenue $5.5M • Equalization funding increased revenue $1.2M • Partnership for Excellence funds restored by $972,000 • Enrollment has been forecast to assume we will restore 1% of our FTES in 05-06 to a level of 34,319 • Mandated Cost Reimbursement = $0
Health Benefit Plans • Through the efforts of the Benefits Task Force and the bargaining units, substantive changes were made to the medical and prescription drug plans to reduce expected increases in 04-05. The plan changes and enrollment migrations of staff to new plans contributed to a lower than expected claims experience in FY 04/05. A saving of $3.8M has been realized due to lower claims experience (primarily in the retirees category). There were additional one time savings achieved from vacant positions, a credit from Kaiser for prepaid expenses and a decreae to our future claims reserve (IBNR). However… • Active and retiree employer costs will increase in spite of plan changes due to a Kaiser rate increase (19%) and PPO trend projections increase (12%) • For the 05-06 year, we are recommending to offset the increases in Kaiser and the self insured plan ($850,000) with one-time savings from the 04-05 fiscal year.
Significant New Expense Items Budgeted in 05/06 • $400,000 has been set aside in ”personnel growth” to fund 6 new classified positions in 05/06 from additional apportionment received in 04/05 from the state as Maintenance and Operation Growth Funds • $640,000 budgeted to partially fund the “unfunded retiree medical liability”
Risk Factors on Expense and Revenue Projections • Enrollment Recovery • Benefit Projections • Productivity • Restoration of Base