Sequoias Community College District Multiyear Fiscal Solvency Plan

Board of Trustees MeetingFirst Reading: December 10, 2012Second Reading: January 14, 2013

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Prop 30 Passes!

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…but does that solve all the Budget Challenges?

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…but does that solve all the Budget Challenges?

Unfortunately, No. Prop 30 allows us to avoid an additional $2.7M in budget cuts but does very little to restore the $4.1M that COS was cut in 2011-12.

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So What Does this mean for COS?

Assumptions:•2012-13 Unrestricted General Fund Revenue will be very similar to 2011-12•Funded FTES will be last year’s 8261 plus a modest “restoration” addition of approximately 90 FTES (est at $366k) for a total of approximately 8350•Funding will remain relatively flat through 2015-16•Medium-size College Threshold set at approx 9350

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Unrestricted General Fund Revenue Projections

Earned FTES/Base FTES 8509/8350 9350*/8350 8600/8350 8600/8350

Medium College > 9350 2012-13 2013-14 2014-15 2015-16

3% Over Base FTES = 8600 Budget Projected Projected Projected

Revenue (Unrestricted General Fund)

State Allocation 42,902,339 43,268,339 43,268,339 43,268,339

Prop 30 Restoration Funds 366,000

Total State Allocation 43,268,339 43,268,339 43,268,339 43,268,339

Misc. 2,929,070 2,929,070 2,929,070 2,929,070

Mandate Reim. @ $28 Funded 231,308 233,800 233,800 233,800

Total Revenue 46,428,717 46,431,209 46,431,209 46,431,209

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Unrestricted General FundExpenditure Projections

Assuming NO (FURTHER) CUTS to the 2012-13 Adopted Budget

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2012-13 2013-14 2014-15 2015-16Total Revenue (Unrestricted) 46,428,717 46,431,209 46,431,209 46,431,209

Expenditure (Unrestricted General Fund):GF 1000 thru 7000 45,066,712 45,066,712 45,813,023 46,388,406

On-Going Budget Cuts (404,000) (205,000) 0

Annual Increases to Budget 1,050,311 660,383 685,980

Funds to Reach 8600 FTES from the 8509 100,000

Tulare Provost 120,000

Subtotal 45,066,712 45,813,023 46,388,406 47,074,386Extra Expense in Pursuit of Mid-Size 366,000 666,000Technology 922,607 957,711 957,711 957,711COPs 460,066 456,691 456,691 456,691OPEB 1,347,981 1,347,981 1,347,981 1,347,981

Total Expenditures 48,163,366 49,241,406 49,150,789 49,836,769

Structural Deficit (1,734,649) (2,810,197) (2,719,580) (3,405,560)On-Going Budget Reductions 404,000 205,000 0 0Total One-time Budget Resources 1,330,649 2,605,197 2,719,580 3,405,560

Fiscal Year (Deficit) 0 (0) (0) (0)

Annual On-Going Budget ReductionsUsed for 2012-13 Adopted Budget and Sample Future Years

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On-Going Budget Reductions:Line Item Budget Cuts 0 0 0 0

General Fund RecommendationsInstr./Non-Instr. SuppliesEquipment RepairStudent HelpOvertimeMisc. Contract Services

Fuel SavingsContract Services

Expenses to Other Resources 0 0 0 0Individual Programs' Use of ReservesMAA Reserve for Backfill

Personnel Reductions 0 0 0 0Classified Position(s)Adjunct/Counseling HrlyAcademic Mngmnt/Conf Attrition/Retirement/LayoffReassigned Time/Special Assignment

Due Process of Negotiations Benefits Cap (Mgt/Conf/Board/COSTA) 321,000 122,000 0 0Benefit Cap (CSEA) 83,000 83,000 0 02.5% Salary Decrease

On-Going Budget Reductions 404,000 205,000 0 0

Annual On-Going Budget IncreasesUsed for 2012-13 Adopted Budget and Sample Future Years

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Annual On-Going Increases to Budget:Step/Col @ $535,880 Included 535,880 535,880 535,880H&W Included 0 0 0PERS/STRS Included ??? ??? ???Utilities (Tulare and 5% increase) Included 280,431 84,453 90,000Insurance (Tulare and 5% increase) Included 100,000 30,050 60,100Custodial Tulare (1.0 Effective 9/13) 50,000 10,000Grounds for Hanford/Tulare (2.0, Eff Spr13) 84,000

Total Annual On-Going Increases to Budget 1,050,311 660,383 685,980

What Happens if We Do Nothing?

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OPEB Visalia Bond DistrictOPEB Trust 4,784,486Visalia Bond 3,070,163Farm Reserve 1,242,064Retiree Health/Welfare 454,320One-Time Revenue 996,408General Fund Reserve 2,729,400Total Available Funds 4,784,486 3,070,163 4,180,128

Balances By Allowable Expenditures

Structural Deficit by Year

2012-13 Deficit Allocation 0 (334,241) (996,408) (1,330,649)

2013-14 Est. Beginning Balance 4,784,486 2,735,922 3,183,7202013-14 Est. Deficit Allocation (1,347,981) (1,257,216) 0 (2,605,197)

2014-15 Est. Beginning Balance 3,436,505 1,478,706 3,183,7202014-15 Est. Deficit Allocation (1,347,981) (1,371,599) 0 (2,719,580)

2015-16 Est. Beginning Balance 2,088,524 107,107 3,183,7202015-16 Est. Deficit Allocation (1,347,981) (107,107) (1,950,472) (3,405,560)

2016-17 Est. Beginning Balance 740,543 0 1,233,248Minimum 5% General Fund Reserve = 2,719,637

Amount Under the 5% General Fund Reserve = (1,486,389)

Estimated 2012-13 Beginning Fund Balances2012-13 Budget with No Cuts Over 3 Years

Multiyear Fiscal Solvency Plan

December 10, 2012

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Assumptions• Prop 30 Passes; COS does not lose $2.7M in revenue• Prop 30 will net COS an additional $366k in Restoration

Funds• The Mid-Size College threshold will remain at 9350 FTES• Funding for 2013-14 through 2015-16 will remain flat (No

extra revenue AND no unexpected cuts)• District will rely on combination of one-time resources,

budget reductions, and due process of negotiations to achieve fiscal solvency

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Unrestricted General FundExpenditure Projections

Assuming a Combination of Cuts, Concessions, and Use of One-Time Resources Adjusted to the 2012-13 Adopted Budget

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2012-13 2013-14 2014-15 2015-16Total Revenue (Unrestricted) 46,428,717 46,431,209 46,431,209 46,431,209

Expenditure (Unrestricted General Fund):GF 1000 thru 7000 45,066,712 45,066,712 44,899,023 44,554,406

On-Going Budget Cuts (1,318,000) (1,125,000) 0

Annual Increases to Budget 1,050,311 660,383 685,980

Funds to Reach 8600 FTES from the 8509 100,000

Tulare Provost 120,000

Add FT positions when FON is un-frozen ?

Subtotal 45,066,712 44,899,023 44,554,406 45,240,386Summer School (in Pursuit of Mid-Size) 366,000 366,000

Increased F13/Spr14 (in Pursuit of Mid-Size) 300,000Technology 922,607 957,711 957,711 957,711COPs 460,066 456,691 456,691 456,691OPEB 1,347,981 1,347,981 1,347,981 1,347,981

Total Expenditures 48,163,366 48,327,406 47,316,789 48,002,769

Structural Deficit (1,734,649) (1,896,197) (885,580) (1,571,560)On-Going Budget Reductions 1,318,000 1,125,000 0 0Total One-time Budget Resources 416,649 771,197 885,580 1,571,560

Fiscal Year (Deficit) 0 (0) (0) (0)

Annual On-Going Budget ReductionsUsed for 2012-13 Adopted Budget and Sample Future Years

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On-Going Budget Reductions:Line Item Budget Cuts

General Fund Recommendations 100,000Instr./Non-Instr. SuppliesEquipment RepairStudent HelpOvertimeMisc. Contract Services

Fuel SavingsContract Services 59,000Adjunct/Counseling Hrly 15,000

Expenses to Other ResourcesIndividual Programs' Use of Reserves 73,000MAA Reserve for Backfill 32,000

Personnel ReductionsAttrition/Retirement/Layoff:Classified Position(s) 50,000 50,000Academic (Save after Repl 6 FT Retirees) 75,000 75,000Management/Confidential 200,000 200,000Reassigned Time/Special Assignment 145,000

Due Process of Negotiations Benefits Cap (Mgt/Conf/Board/COSTA) 321,000 122,000Benefit Cap (CSEA) 83,000 83,0002.5% Salary Decrease 310,000 450,000

On-Going Budget Reductions 1,318,000 1,125,000 0 0

Annual On-Going Budget IncreasesUsed for 2012-13 Adopted Budget and Sample Future Years

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Annual On-Going Increases to Budget:Step/Col @ $535,880 Included 535,880 535,880 535,880H&W Included 0 0 0PERS/STRS Included ??? ??? ???Utilities (Tulare and 5% increase) Included 280,431 84,453 90,000Insurance (Tulare and 5% increase) Included 100,000 30,050 60,100Custodial Tulare (1.0 Effective 9/13) 50,000 10,000Grounds for Hanford/Tulare (2.0, Eff Spr13) 84,000

Total Annual On-Going Increases to Budget 1,050,311 660,383 685,980

Preserving Fiscal Solvency

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OPEB Visalia Bond DistrictOPEB Trust 4,784,486Visalia Bond 3,070,163Farm Reserve 1,242,064Retiree Health/Welfare 454,320One-Time Revenue 996,408General Fund Reserve 2,729,400Total Available Funds 4,784,486 3,070,163 4,180,128

Balances By Allowable Expenditures

Structural Deficit by Year

2012-13 Deficit Allocation 0 0 (416,649) (416,649)

2013-14 Est. Beginning Balance 4,784,486 3,070,163 3,763,4792013-14 Est. Deficit Allocation 0 (191,438) (579,759) (771,197)

2014-15 Est. Beginning Balance 4,784,486 2,878,725 3,183,7202014-15 Est. Deficit Allocation 0 (885,580) 0 (885,580)

2015-16 Est. Beginning Balance 4,784,486 1,993,145 3,183,7202015-16 Est. Deficit Allocation 0 (1,571,560) 0 (1,571,560)

2016-17 Est. Beginning Balance 4,784,486 421,585 3,183,720Minimum 5% General Fund Reserve = 2,719,637

Excess of 5% General Fund Reserve = 464,083

Estimated 2012-13 Beginning Fund Balances2012-13 Budget with Cuts Over 3 Years

What The Plan Does As Presented• Maintains the fiscal integrity of the District and protects programs by

utilizing a combination of one-time funds, budget reductions, and employee concessions

• Significantly reduces the structural deficit of the District• Allows the District to serve 3% more FTES than being funded from the

State of California• Restores Summer School at COS• Maintains Step and Column increases for eligible employees• Allows for the planning and implementation of instructional and student

service programs for multiple years• Brings employee salary and benefit expenditures to approximately 85%

of the 2013-14 projected revenue• Relies on the due process of negotiations and attrition/retirement/layoff

to bring expenditures in line with revenue• Develops a reasonable scenario of the continued State and National

economic downturn

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QuestionsCommentsDirections

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