Campus Budget

Campus Budget

Meeting Notes - February 24, 2009

1:30-3:00 a.m.

Admin. Conf. Room106

1) Approval of Notes
The notes were approved.

2) State Budget Passes
Jeanpierre highlighted the main points of the state budget as per Scott Lay and Erik Skinner’s updates posted on this web site.

California Community Colleges, current year (2008-09):

  • $39.8 million cut to eliminate the 0.68 COLA
  • $3.6 million reduction to capture unspent prior-year funds
  • $4 million cut to mandate payments
  • $340 million in apportionment funding deferred from January, February, March, and April to be repaid in July (this replaces the existing $245 million deferral that was added to the community college budget in 2008-09). This new deferral is likely to be a permanent feature of our budget.
  • Delay repayment of existing $200 million June-to-July deferral, now to be repaid in October. This change is assumed to be permanent.


California Community Colleges, budget year (2009-10):

  • No COLA
  • $185.4 million augmentation to fund 3 percent enrollment growth
  • The budget does not include categorical flexibility provisions for the colleges
  • The budget does not include student fee increases
  • The budget does not include other policy changes that have been discussed in recent weeks (property tax shortfall protection, lowering funding rates for certain courses, etc.) Such policy proposals will be heard in policy committees or budget hearings during the Spring.
  • The budget maintains funding for the Cal Grant program. The proposal to eliminate new Competitive Cal Grants was rejected.


3) FHDA Budget Update and Guidelines

Jeanpierre reviewed the guidelines and the budget update as per the information posted on this web site and also clarified that due to some costs savings the projected internal operating deficit had been reduced to $6.7M down from $11M. There is pressure from the Board to present a plan at the June Board meeting on how the structural deficit would be resolved. During the discussion the following points were brought up:

  • Job Corp has been reduced by 1400 FTES. Job Corp was used to maintain cap during the last 5 years. Reducing this program will result in saving $2.5M in expenses but it will also reduce enrollment by approx. 6%, which will have to be made up by on-campus enrollment.
  • PDL/SDL expenses are lower due to fewer applications.
  • It is likely De Anza would hire 6 FT faculty to meet the FT faculty obligation of 516. The deans are looking at staffing lists to see which vacancies to fill.
  • It is difficult to make reductions and at the same time increase enrollment. The district wants to find best fiscal balance between cap and productivity.
  • De Anza is looking at off campus locations for swing space to backfill the classrooms that will be offline during the Measure C construction/renovations.
  • There are approx. $0.5M in vacant positions at De Anza.
  • De Anza has a healthy fund balance to carry through 2009.


4) 2008-09 2nd Quarter Report & Narrative
Jeanpierre & Slater highlighted the major points from the narrative as posted on this web site.
The following points were discussed in more detail:

  • The term “categorical” is very broad and the district has asked for clarification on if there are cuts to any categorical programs.
  • The deferral of the apportionment has a negative impact of approx. $500K.
  • There is nothing in the budget for Property tax backfill for FY 09-10. Property taxes are lower due to foreclosures and it is likely the shortfall will continue through next year.  FHDA funding is from student fees, property tax and apportionment. Therefore, a property tax shortfall has a major negative impact.
  • The estimated deficit factor is currently about 1.2 for 08-09. 09-10 has no deficit factor as yet and depends on property tax revenue and the state budget.
  • It is at the State’s discretion to assign Federal dollars directed for education.
  • There is a Chancellor’s Advisory Council draft memo on how to close the structural deficit that will go to the Board on March 2, 2009. A copy of this memo will be posted on this web site when it becomes available.
  • FHDA will likely be looking to restore rather than increase growth due to the loss of FTES from Job Corp  and “TBA” hours.


5) Structural Deficit Reduction Ideas
During a general discussion on potential savings Slater clarified how the medical benefits program worked and the following points were noted:

  • Fund 61 (Medical Benefits) savings come from various sources. Medical benefits cover active and retired employees plus dependents. Previously, the budget was based on hard figures for vacant and filled positions, but now an estimate is used for vacant positions.
  • Retirees are projected from trends and current HR stats. Medicare offsets some of the retiree's medical costs. The numbers of retirees with medical benefits will peak in 2017.
  • The medical expense per employee is budgeted at $15 (includes households).
  • Kaiser analyze actual costs per year and then average out the amount. They use this figure to calculate the premium for coverage.
  • The average PPO expense is $15k per employee. There is a stop-loss provision at $150K per person.
  • Fund 61 is now self-funded. Previously fund 14 would make up shortfalls and sweep excess but now the fund is a self-support.  Fund balance from is mainly from vacancies.
  • Approx. 4000 people are covered. There are approx. 1000 active FHDA employees.
  • Historically, Kaiser premiums tend to cost less than the self insured PPO plan but this is not a direct comparison and cannot be used as a statistic.
  • The Lockton Benefits Group (district’s consultant) advised that the standard cost increase for the upcoming year is 10.6% which would total approx. $3M for FHDA.
  • How much money would be saved by freezing salaries for a year?  Step and column increases are projected to be about $400K.

Present: Bloom, Gerard, Jeanpierre, Larson, Lee-Klawender, Sellitti, Slater.
Notes: Gibson



Governance
Building: Administration
Contact: Pippa Gibson
Phone: 408.864.8936
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Last Updated: 2/25/09