Board Budget Study Session- Part II

Sesnon House

December 7, 2015

5:00 pm

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AgendaoDistrict responses to remaining CCFT

Questions – 10 minutes

oCCFT Presentation/Comments/Conclusions – 15 minutes

o Trustee Questions – 15 minutes

oOpen Q&A – 15 minutes

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CCFT Question: #2What have the percentages of faculty compensation as a part of base budget revenue* been over the past ten years? Of full-time faculty compensation as part of base budget?

• We updated our response to include the information we were able to compile since the November Study Session.

• See slide #4/#5

• *This calculation is normally done as a percentage of the expenditure budget- because this calculation differs from the normal process, these percentages do not match the percentages the business office prepares for other purposes.

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Total Compensation as % of

Total Base Revenue

FY 2012-13% of Total Base

Revenue FY 2013-14% of Total Base

Revenue

Total Faculty with Benefits $ 29,757,540 52.29% $ 29,736,636 51.14%

Total Admin with Benefits $ 5,045,296 8.87% $ 5,204,719 8.95%

Total Confidential with Benefits $ 1,025,578 1.80% $ 879,171 1.51%

Total Classified with Benefits $ 11,476,055 20.16% $ 11,697,867 20.12%

Grand Salary and Benefit Total $ 47,304,469 83.12% $ 47,518,393 81.72%

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Mandatory benefits/Café Stipend expenses have been prorated to estimate the percentages

assigned to each employee group

% of Salaries by Bargaining Group

2009-10 2010-11 2011-12 2012-13 2013-14

FT Faculty 25.27% 24.83% 26.80% 24.92% 24.11%

Adjunct 14.15% 13.66% 15.55% 15.07% 15.87%

Total Faculty 39.42% 38.49% 42.35% 39.99% 39.98%

Administrators 5.680% 5.67% 6.30% 6.21% 6.29%

Confidentials (with 7% PERS) 1.32% 1.31% 1.38% 1.26% 1.06%

Classified (with 7% PERS) 16.12% 16.33% 17.35% 14.85% 14.86%

Grand Total 62.54% 61.80% 67.38% 62.31% 62.19%

Benefits 17.72% 19.45% 23.24% 20.81% 19.53%

Total Compensation 80.26% 81.25% 90.62% 83.12% 81.72%

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CCFT Question: #10The final budget for 2015-16 shows a projected net ending balance of $14.2 million as of 6/30/15. What percentage of base budget is this amount? See slide #7. The projected ending balance includes the following fund balances that are restricted:

Community Education Fund balance $1.1 million

Restricted fund balance $1.1 million

7% General Reserve $4.4 million

• Subtotal $6.6 million

The remaining balance of $7.6 million is $12.4% of the 2015-16 final budget- base budget expenditures.

The final budget for 2015-16 shows a projected ending cash balance of $ 19.1 million as of 6/30/15. What accounts for this difference? See slide #7

• *see page 24 of the 2015-16 Final Budget

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Projected Ending Fund Balance

as of 6/30/16

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Budget

Ending Balance 6/30/2013 6/30/2014 6/30/2015 6/30/2016

Unrestricted Funds

7% General Reserve - Fund 11 $3,000,000 $3,000,000 $4,407,000 $4,407,000

Carry Over - Fund 14 3,800,000 3,743,375 3,647,778 3,730,384

One-Time - Fund 17 3,361,853 4,201,407 4,106,646 3,889,969

FTES Reserve - Fund 17 1,000,000 312,131 0 0

Community Ed - Fund 15 1,016,046 1,114,827 1,159,688 1,096,851

Total Unrestricted Funds $12,177,899 $12,371,740 $13,321,112 $13,124,204

Restricted Funds 2,068,901 726,872 576,246 1,124,006

Total General Fund Ending Balance $14,246,800 $13,098,612 $13,897,358 $14,248,210

Cash Balance 13,408,072* 12,703,767** 20,405,018 19,169,900

* Includes a Mid-Year TRAN of $8.8 million

** Includes a Mid-Year TRAN of $4.4 million

Board Of Trustees Question #1

How much of COLA increases have been passed on to the employees? How often in the past ten years did Cabrillo

negotiate a labor increase above COLA?

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Fiscal Year

Funded COLA

Ongoing Compensation increase over previous year Salary Increase

Benefits increase as a percentage of the cost of 1% for all employee groups

2011-12 0% 0.55% 0% District paid 100% of benefits increase

2012-13 -0.39% 0.88% 0%Negotiated 50%/50% Cost share for benefit increases, .88% increase

2013-14 1.57% 4.42%4% increase(1.26% ongoing, 2.43% one-time)

50%/50% Cost share for benefit increases, .42% increase

2014-15 0.85% 0.58%2.43% increase *(1% ongoing, 1.43% one-time)

50%/50% Cost share for benefit increases, .58% increase

2015-16 1.02% 1.71%

3% ongoing salary increase *(1.43% converted to ongoing plus 1.57% new ongoing)/3.5% one-time lump sum per unit

50%/50% Cost share for benefit increases, .14%% increase

* The 2.43% one-time raise was converted to ongoing over a 3-year period

Board of Trustees Question #2

In the event that Cabrillo does not pass a Bond in 2016, what annual expenditure should we put in our budget? $5 Million per year. If a Bond does pass, would it take care of the estimated $1to $2 million per year needed for technology upgrades throughout the college?

• Passage of a bond reduces the need to set aside funding for facilities and technology infrastructure for some amount of time yet to be determined. More work is needed to answer this question. Maintenance costs for facilities and technology are ongoing items that need to be included in the unrestricted general fund operating budget.

• The college needs to have a long-term plan for funding ongoing facilities and technology infrastructure, equipment and maintenance.

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Board of Trustees Question #3

What will the increased retiree medical benefit cost be when the

amortization factor changes from 30 years to approximately10

years? Has any amount been included in the expense forecast?

If not, it should be, even it is a low estimate.

• The college is currently setting aside funding for the annual

required contribution based on the actuarial study that was

completed in 2013. The next actuarial study that will be

completed in 2016. The impacts of the change will be known

at that time. The college will transfer one-time funds saved for

future benefits to a trust within the next six months to a year.

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Board of Trustees Question #4

Is there some reason that we believe the Affordable Care Act

penalty will be reduced in the years after 2016? Should we not

include some estimate?

• The ACA implementation began on October 1, 2015. We are currently estimating the expense based on a snapshot in time

from prior year. The estimated cost is reflected on the budget

planning parameter document. The budget will be reassessed

as part of the budget development process each year.

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Board of Trustees Question #5

On page 22 of the presentation last meeting, you talk about he loss of FTES impacts on other programs. Shouldn’t we put some number to these various potential losses of revenue? Same comment as above, even if it is a low estimate, to not include it at all is misleading.

Examples of the programs on page 22 are :

• Lottery (base and restricted funds)

• State Instructional Equipment (restricted)

• Deferred Maintenance (restricted)

• State Mandate Block Grant (one-time unrestricted)

• Student Services Programs (restricted)

Most of these budgets are not part of the unrestricted general fund. Non-base programs are expected to be self-supporting. Cuts would be made to the individual budgets impacted as appropriate.

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Board of Trustees Question #6

Is there some reasonable estimate we can use for the drop in

revenue due to the sales tax increase from Prop 30 ending on

12/31/16? Is there some reason that we should not plan for a

drop in revenue other than hope that something else will replace

those funds?

• The future of Prop 30 is unknown at this time. We contacted

the State Chancellor’s Office recently. Dan Troy said the sales

tax portion of Proposition 30 is very small. We should see little

to no impact. The Personal Income Tax provision is significant

so we should stay tuned for updates.

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Board of Trustees Question #7

If we believe that the new Sick Leave Law will cost us $100,000 in

2015-16, why is there no minimal estimate for the following years?

• The estimated cost is included in the 2015-16 budget. The

budget will be reassessed as part of the budget development

process each year.

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