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Revenue Recalculation Milestone: Not Enough Funds for SCFF in 2018-19

This news update highlights the budget challenges for implementing the Student Centered Funding Formula (SCFF) in 2018-19. Due to insufficient funds, a recalculation of the revenue has been planned, resulting in a $4.8M cut in funding for the College Operating Support (COS). The projected budget for 2018-19 and 2019-20, along with other budget allocations and funding changes, are also discussed.

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Revenue Recalculation Milestone: Not Enough Funds for SCFF in 2018-19

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  1. Budget News 2018-19 P1 (revenue recalculation milestone) News: • Not enough funds to implement SCFF in 2018-19 – • Plan to recalculate 2018-19 actual to ONLY fund 2017-18 computational revenue + 2018-19 2.71% COLA • This creates a $4.8M cut in current year (& most likely ongoing) funding for COS • which is actually $6.8M IF COS were to receive it’s true SCFF funding for 2018-19 • With a current surplus of $3M, this will most likely create a deficit of appx $1M at close of books for COS in 2018-19 • IF property taxes come in closer to budget (which the state expects?), COS could close 2018-19 with a balanced budget or a smaller surplus.

  2. Projected Budget – 2018-19 Unrestricted Only

  3. Governor’s January Budget California Budget Proposal for 2019-20 - Items of Note: • For 2019-20, at this point we can only plan on the state funding 2018-19 computational revenue + 2019-20 3.46% COLA (IF the COLA holds??) • Students Center Funding Formula (supposedly) maintained Year 2 of phase in delayed!: Year 1 percentage allocations remain: • 70% funding for FTES & Base • 10% funding for “Student Success” • 20% funding for “Supplemental/Equity” • Legislators will work on the Student Centered Funding Formula to verify that transfer student counts are unduplicated • 3.46% COLA • 0.55% Growth/Access funds

  4. Governor’s January Budget • $358.7M allocated for 12 new and 15 continuing construction projects under Prop 51 • COS Basic Skills IS one of them!! • College Promise = $350,000 (est) additional ongoing for COS • AB 19 “free college for all first-year full-time freshman” • IS NOW adding “all second-year full time students” • Student Equity & Achievement Program – no increase • Prior Student Equity Program, Student Support and Success Program, and Basic Skills Initiative combined • DSPS/EOPS/CARE/CalWorks all get COLA • ZERO for Plant & Instructional Equip one-time funds • We hopethis receives an allocation in May Revise or and June budget

  5. Governor’s January Budget • Guided Pathways - in 2017-18 $135M was allocated state-wide one-time • $1.37M one-time funds for COS = • $342K in 17-18 (all was carried forward) • $411K in 18-19 (possibly 100K will be spent - mostly on AB 705 implementation - anticipate $653K carried forward to 18-19) • $342K in 19-20 • $137K each in 20-21 and 21-22 • $4M additional state-wide for Adult Education Block Grant (ongoing) • Basic Financial Aid Program (BFAP) is cut 2% - not sure why • $3B state-wide to lower employer STRS rate in 19-20, 20-21, and ongoing

  6. Governor’s January Budget • Adjunct Parity, Next UP, and Full-time Faculty hiring funds are flat – no increase • Strong Workforce funding for 2019-20 is flat (unless decreased?): • $1.291M local • $696K regional • PERS/STRS increased costs for 2019-20 = $884,161 and for 2020-21 $664,957 (already budgeted in advance!) • If the District funds 2021-22 increased costs in advance, would = $173,123

  7. New State Funding Formula The Student Centered Funding Formula: • In 2019-20, state allocation funds are based on the same rates as 18-19: • 70% on FTES + Base Allocation • 65% in 20-21 and 60% in 21-22 and thereafter? • 20% on Supplemental Allocation for Student Equity; socio-economic needs based on: • unduplicated counts of PELL students • AB 540 students • BOG (College Promise) students • 10% on Student Success (now capped at 10%) • 15% or 20% in 20-21, and 20% in 21-22 and thereafter • based on eight different metrics including: • degrees, certificates, completion, transfer, attaining a living wage, etc. (State is going to limit transfer counts…) • extra points when BOG and PELL students achieve these things

  8. State Funding Allocations 101 • Current funding per FTES: • $3,727 Base Credit FTES • $3,347 Base Noncredit FTES • $5,457 CDCP FTES (career development/college prep) • $5,457 Special Admit Students (dual enrollment only) • Current funding of base allocation: • Mid-size Single College District: $5,223,684 • + funding per Center: • Hanford $1,305,921 • Tulare $1,305,921

  9. Actual Funding calcs 18-19

  10. Actual Funding calcs 18-19

  11. FTES Update Historical Perspective

  12. Fiscal Solvency Projections 2019-20 • Assume 0 growth in 18-19 per current trend • Assume 0 growth for 19-20 • Calculation includes a 3-yr avg FTES increase of 47 • Assume hold harmless 3.46% COLA = $2,181,747 for 19-20 estimate = 2.2M new revenues 19-20 • If we assume only 2.0% COLA = $1,261,128 for 19-20 estimate = 1.2M new revenues 19-20 2020-21 • Assume 0% growth for 20-21 and hold harmless • Calculation includes a 3-yr avg FTES decrease of 135 • (decrease due to 18-19 is first year we must exclude special admit from FTES rolling average count) • Assume 1.0% COLA for 20-21 (3.46% FY19/20) = $652,382 ongoing = 650K new revenues 20-21; (or 640K if only 2% COLA FY19/20)

  13. Fiscal Solvency Projections Step and Column Costs(Cost of 1% = information only; not in budget projections)

  14. Projected Budget - Fiscal Solvency Plan Unrestricted Only (ORIGINAL per Jan Gov’sbdgt) 3.46%COLA and 0 Growth estimated for 19-20; 1% COLA and 0 Growth estimated for 20-21

  15. Projected Budget - Fiscal Solvency Plan Unrestricted OnlyAssumes 4.76M lower 18-19, 3.46%COLA and 0 Growth estimated for 19-20; Assumes new 18-19 base into 19-20, 1% COLA and 0 Growth estimated for 20-21

  16. Projected Budget - Fiscal Solvency Plan Unrestricted OnlyAssumes 3.3M lower 18-19, 3.46%COLA and 0 Growth estimated for 19-20; Assumes new 18-19 base into 19-20, 1% COLA and 0 Growth estimated for 20-21

  17. Projected Budget - Fiscal Solvency Plan Unrestricted OnlyAssumes 4.76M lower 18-19, 2.0% COLA and 0 Growth estimated for 19-20; 1% COLA and 0 Growth estimated for 20-21

  18. PERS & STRS Increased Employer Costs

  19. Local College Promise Reimbursement Program (COS) At COS: 2018-19 Local Promise: Students can have the cost of their first year of college reimbursed in full! • First year college students only • Prior dual enrolled HS students = OK • Students must enroll in, and complete with a passing grade (C), 15 units per semester • Any tuition paid will be reimbursed in full after the end of the semester! For 2019-20: • COS has extended this to second year of college • COS has changed the parameters to qualify • Must take and pass 12 units minimum per semester • Must File FAFSA or Dream Act App, but now by Oct 31 (fall semester) and March 31 (spring semester) • Any tuition paid will be reimbursed in full after the end of the semester!

  20. Enrollment Management - FTES 2018-19 FTES as of January 15, 2019: Assume zero growth for spring and summer 2019 (SALY) Reported 10,337 FTES in 17-18, which included a shift of 88. 10,249 = actual *Not final numbers for spring or summer 2019 – will finalize 6/25/19

  21. FTES Status Hanford & Tulare 2018-19 projection based on spring and summer 2018 Same As Last Year

  22. Fund Balance Reserve Board priority #3: Ensure fiscal stability and strive to achieve a General Fund reserve no less than the current average (21.3% to be updated each July) for community colleges statewide. (Updated statewide average as of Feb 2019 for 2017-18 data is now 21.2%) • COS Fund Balance at 6/30/18 = 32.0% • COS Fund Balance at 6/30/17 = 28.8% • State-wide average at 6/30/18 = 21.2% • State-wide range at 6/30/18 = 2.3% to 54.9% • Most Districts range from 10% to 36% • (5 under 10% and 6 over 36% )

  23. Fund Balance Trend History

  24. The End… Thank you for coming!

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