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Foothill-De Anza Budget Update November 6, 2009

Foothill-De Anza Budget Update November 6, 2009. Before the governor’s 09/10 budget was signed into law…. Foothill-De Anza’s internal deficit was estimated at $6.7M (January 2009 estimates). When the 09/10 budget was passed…. The following increased Foothill-DeAnza’s deficit:

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Foothill-De Anza Budget Update November 6, 2009

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  1. Foothill-De Anza Budget UpdateNovember 6, 2009

  2. Before the governor’s 09/10 budget was signed into law… Foothill-De Anza’s internaldeficit was estimated at $6.7M (January 2009 estimates)

  3. When the 09/10 budget was passed… The following increased Foothill-DeAnza’s deficit: • Cuts to base apportionment • Zero COLA • Cash deferrals resulting in a reduction to interest earnings

  4. FY 09/10 reductions that have been implemented: • $6.7M has already been eliminated from 09/10 operating expenses: • 68 filled/vacant positions eliminated (escrow funds were set aside to cover 35 positions through 6/30/10) • Funding for 16 positions reduced or reassigned to different funding sources - Categorical Programs (Fund 121), Self-Sustaining (Fund 115) or Measure C (Fund 400) • 4 positions restructured/reorganized due to retirement • $312,655 in “B” budget reductions • $200,000 reduction in faculty reassigned time funding • $2.6M in part-time faculty costs reduced due to workload reduction (5%)

  5. Where were we in July 2009? (Adopted Budget)

  6. 2010/11 budget projections as of July 2009…

  7. Our resources … budgeted positions in the general fund for FY 09/10

  8. Budget Challenges… Following needed to be addressed by November: • How would we reduce the general fund by $8.1 million effective 7/1/10? ($3.8 current ongoing deficit plus $4.3M in anticipated fiscal year 10/11 expense increases) • How would we reduce categorical programs by $7.9 million effective 7/1/10? • How will FH, DA and CS use their ending balances to buffer expense reductions?

  9. What are the results of this analysis? • De Anza report (Brian) • Foothill report (Judy) • Central Services report (Andy)

  10. What other changes do we know of at this point? • Possible agreement on benefit restructuring to reduce our 2010/11 expenses by $5.3 million (remember, our last estimate for our 10/11 deficit without further state reductions and other operating cost increases is $8.1 million) • Probable loss of about $1 million this year due to FTES audit, statewide recalculation of growth for last year and a slight shortfall in non-resident revenue • Cover the cost of part-time faculty equity, office hours and health benefits payments for 09/10 due to the loss of categorical funding … approximately $1 million

  11. What do these changes mean? • We are trying to solve a $8.1 million deficit for 2010/11 • Good news is that this could be reduced by $5.3 million IF a benefits settlement is reached • Bad news is that our 10/11 deficit will increase by $1 million since there is no agreement yet to modify the part-time faculty equity program • In addition, our revenue estimates for 09/10 and 10/11 may have to be adjusted for lower than anticipated non-resident revenue ($350,000) In summary, our recalibrated unresolved deficit for 10/11 is approximately $4.1 million (assuming negotiated benefits change implementation)

  12. What about the “staff protection reserve” for 10/11 of $7 million? • In 09/10 this $7M will be reduced by • $1 million in revenue reductions noted earlier, and • $1 million in expense increases for part-time faculty equity expenses • Leaving only $5 millionfor FY 10/11 • Many things will continue to change throughout the year • staff protection fund could increase if we have float dollars available at year end or benefit savings • staff protection fund could decrease further if there are mid-year cuts from the state

  13. Key Points General Fund • Even with a negotiated change to benefits we still have an internal deficit of approximately $4.1M estimated for 10/11 • Best case scenario – no more cuts to state revenue in 10/11 • Worst case scenario – additional cuts $??? Categorical Programs • There will be no backfill (such as one-time ARRA funds) from the federal government, resulting in true a reduction for 10/11 of up to $7.9M Total projected deficit $12M (assuming negotiated benefits change implementation, no other revenue reductions, and no other expense increases)

  14. Key Dates • December 2009 • Outcomes of benefits negotiations will be known • January 2010 • Governor’s 2010 proposed budget released • FHDA reviews and adjusts budget strategy for fiscal year 10/11

  15. Plan of Action General Fund • Work on solutions to balancing $4.1M deficit to be initiated in January 2010 • Colleges and Central Services to conduct an analysis beginning January 2010 to determine if any new ongoing cuts (positions/B budget reductions) can be funded with one-time carry over for several months

  16. Plan of Action (continued) Categorical Programs January 2010 • Colleges to finalize analysis of programs to evaluate impact of cuts on students and staff • Colleges to determine if any categorical program cuts can be deferred with their projected ending fund balance from 09/10

  17. Many thanks to everyone for making it possible for our students to receive their education in these trying fiscal times

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