Antelope Valley Community College District Budget Update

1. Antelope Valley Community College DistrictBudget Update Presented By: Mazie L. Brewington Vice President of Administrative Services Town Hall Meeting May 24, 2013

2. Outline 1. 2012-13 Unrestricted Estimates 2. 2013-2014 May Revise Highlights 3. 2013-2014 Budget Estimates 4. 3 Year Budget Projection Estimates 5. Education Protection Account 6. 2013-14 Tentative Budget Timelines

3. 2012-13 Unrestricted General Fund Estimates Beginning Balance $ 7,502,546 Revenues $58,283,918* Expenditures $56,541,267 Ending Fund Balance $ 9,245,197 Surplus/(Deficit) $ 1,742,651 Reserve % 16.35% * Assumes a 1% revenue shortfall deficit co-efficient. Includes $1.687 million in prior year recalculation.

4. 2013-14 May Revise Highlights Policy Proposals • 90-unit cap proposal withdrawn • Census proposal withdrawn • Online proposal doesn’t change • FAFSA: require BOG to develop process for determining student independence (e.g., prior year tax return). Allow 1 term grace period for completion of FASFA. Adult Ed • Initial proposal withdrawn • $30M, to be spent over 2 years, is proposed for planning of regional adult ed programs (consortium that could include CCDs, K12, CBOs, jails, etc.) • Plan is for $500M to be appropriated in 2015-2016 • All programs funded at CDCP rate • Instructor qualifications subject to consortium plans Source: Dan Troy, Vice Chancellor, College Finance and Facilities Planning California Community Colleges Chancellor’s Office

5. 2013-14 May Revise Highlights Continued… Budget Year • About $227M in programmatic funds ($30M more than was proposed in January) • The Governor would allocate the funds as follows: • $87.5M for COLA (1.57%), • $89.4M to restore access (1.63%) • $50M for the Student Success and Support Program (the old Matriculation program) with an allowance that up to $7M could be shifted from that amount to develop e-transcript and e-planning tools. Deferral Buy Down-- • The Governor proposes to use the current year increase in Proposition 98 obligations to pay down an additional $179.9M in deferrals. This would reduce the total system-wide deferral to $621.2M. • The Governor would further pay down an additional $64.5M in deferrals in the budget year, reducing the system-wide deferral to $557.5M. Source: Dan Troy, Vice Chancellor, College Finance and Facilities Planning California Community Colleges Chancellor’s Office

6. 2013-14 May Revise Highlights Continued… RDAs • Statute passed concurrent with the 2012-13 budget requires the state to backfill any shortage in property taxes related to the dissolution of RDAs that were assumed as part of the CCC budget. The truing up process is required to be done on or before June 30th. • Currently, the Department of Finance’s estimate of this shortfall differs greatly from the reports of actual disbursements our office has received from the counties. While exact estimates from Finance are not yet available as of this presentation, they believe we will receive approximately $150M more by June that what has been reported to us so far this year. Ensuring that the full current year backfill is provided by June 30 is our most important priority, and the Department of Finance continues to assure us that is will be provided, whatever the final figures are. We will work with staff to communicate the importance of truing up our budget. Certainly, ensuring the current year apportionment is not deficited should take precedence over any other proposals. Source: Dan Troy, Vice Chancellor, College Finance and Facilities Planning California Community Colleges Chancellor’s Office

7. 2013-14 May Revise Highlights Continued… Legislative Analysts Office (LAO) Overview of the May Revision • The Governor’s administration is forecasting that even though revenues are up $4.5B higher than expected, it will be eroded by weaker tax receipts in the coming months • The LAO does not agree with this assessment and is projecting a higher revenue amount of $3.2B above the Governor’s May revision for 2011-12, 2012-2013 and 2013-2014 combined. • LAO is advising the Governor that even though we having improved fiscal performance, that emphasis needs to be given to the large budgetary and retirement liabilities. • LAO also advises that due to risks with the economic outlook and state’s volatility, building larger reserves in the coming years as a priority. Source: Legislative Analysts Office, The 2013-2014 Budget: Overview of the May Revision, May 17, 2013

8. 2013-14 Unrestricted Fund Budget Estimates Beginning Balance $ 9,245,197 Revenues $56,970,560 Expenditures $58,582,265 Ending Fund Balance $ 7,633,501 Surplus/(Deficit) ($1,611,696) Reserve % 13% *Does not include an revenue deficits, No growth, No COLA

9. 3 Year Budget Projection Estimates PROP 30 TAXES ARE TEMPORARY!!! * Assumes no growth, no COLA, revenue is flat, no increase to benefits, central plant payment continued to be paid from Lancaster Redevelopment funds - Reduction in revenue in 2015-2016 due to no longer receiving utility incentives for solar project - Reduction in expenditures in 2014-2015 due to not having elections that year and reduction due to not purchasing a bus

10. Education Protection Account (EPA) • Proposition 30 was passed in November 2012, which established the EPA account. • LEAs have the sole authority to determine how the funds will be spent; however, there are accountability provisions: • The spending plan must be approved by the governing board during a public meeting, which will be held June 10, 2013. • EPA funds cannot be used for the salaries and benefits of administrators or any other administrative costs (as determined through the account code structure). • Each year, the LEA must publish on its website an accounting of how much money was received from the EPA and how the funds were expended. • For 2012-2013, $8,798,894 in EPA payments to AVC are scheduled to be made by June 30th • In future years, it is expected to be paid quarterly, Sept/Dec/Mar/Jun. Sep & Dec will most likely be based on prior year P2 ADA information, which means it can be subject to change. This still creates cash flow challenges!

11. 2013- 14 Tentative Budget Timeline • May 24, 2013: Budget Update – Town Hall Meetings • May 28, 2013: Budget & Finance Subcommittee Meeting • May 29, 2013: Strategic Planning & Budget Council Meeting • May 31, 2013: Budget Study Session-Board of Trustees • June 10, 2013: 2013-2014 Tentative Budget submitted to the Board of Trustees for approval

12. QUESTIONS