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BUDGET DEVELOPMENT PROCESS & TENTATIVE BUDGET

BUDGET DEVELOPMENT PROCESS & TENTATIVE BUDGET. BOARD OF TRUSTEES MEETING JUNE 25, 2007. Resource Allocation. DRAC – District Resource Allocation Council Current process established by Board of Trustees’ action May 1997 Charged with the development and oversight of the allocation process

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BUDGET DEVELOPMENT PROCESS & TENTATIVE BUDGET

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  1. BUDGET DEVELOPMENTPROCESS & TENTATIVE BUDGET BOARD OF TRUSTEES MEETING JUNE 25, 2007

  2. Resource Allocation • DRAC – District Resource Allocation Council • Current process established by Board of Trustees’ action May 1997 • Charged with the development and oversight of the allocation process • Makes recommendations to the Chancellor

  3. Council Composition • Nine voting members: • 2 Academic Senate Presidents or designee • 2 Academic Senate faculty appointments • 2 Directors of College Fiscal Services • 2 Vice Presidents of Instruction • 1 District representative appointed by Chancellor • Chaired by Deputy Chancellor (non-voting)

  4. DRAC Revenue Allocation Model • Location prior year ending balances carried forward • Revenue calculations based on SB 361 • FTES is updated according to attendance reports (CCFS-320) submitted to the State • State Budget Act • COLA • Growth • Other • Local College-based Revenue • Non-resident tuition, facilities use fees, student materials fees

  5. Allocations • DRAC Model Distribution 2007-08: • Colleges = 81.2% (split according to FTES) • District = 9.8% fixed • General Expenses = 2.5% (legal fees, audit fees, IT priority projects, retiree benefits, property & liability insurance, election costs, etc.) • Contingency = 6.5% fixed according to Board of Trustees’ budget development guidelines

  6. Expenditure Budget Process • District Fiscal Services updates all salaries & benefits: • Step and Column movement • Apply annual contractual increases • Update Health Benefit Budget • Update OPEB (Retiree Liability Costs) • Revise Payroll Expense Rates • STRS, PERS, Unemployment Insurance, Worker’s Comp, etc. • Revise General Expense Budget Items

  7. District Services & ATEP Expense Budget • Budget Worksheets are Distributed to Departments via the Vice Chancellor and Provost offices • Departments: • Review Budgets for Personnel Position Accuracy • Allocate Supply and Operating Funds to Accounts • Consult with Director of Fiscal Services and Deputy Chancellor as appropriate

  8. District Services & ATEP Expense Budget, cont’d. • Budgets are Updated for Rising Costs • Memberships • Commission on Athletics, Community College League • New Employee Fingerprinting • Maintenance agreements for equipment & software • Copiers, Mail Machines, Fusion System (for Capital Projects) • Deputy Chancellor & Director of Fiscal Services make recommendations to the Chancellor for all district services

  9. Irvine Valley College Expense Budget Total Allocation established by DRAC model Budget Worksheets are Distributed to Departments Departments: Review Budgets for Personnel Position Accuracy Propose Budgets for Discretionary Expenditures: Supplies Contracts Propose Budgets for Mandatory Expenditures: Maintenance agreements for equipment & software Utilities June 25, 2007 9

  10. Irvine Valley College Expense Budget, cont’d. Director of College Fiscal Services reviews departmental budgets in consultation with Vice Presidents, Deans, and Directors Significant new expenditure items are discussed within various shared governance groups and recommendations are made to the President Strategic Planning Process Comprehensive report submitted to the Board of Trustees in May 2007 Involves Academic Senate, ASIVC, Classified Management, Classified Senate, CSEA, Deans, and Faculty Association June 25, 2007 10

  11. Irvine Valley College Expense Budget, cont’d. Budget Committee Makes recommendations to the President on fiscal matters Involves Academic Senate, ASIVC, Classified Management, Classified Senate, CSEA, Deans and Faculty Association Vice Presidents & Director of College Fiscal Services make final recommendations to the President for all departmental budgets President makes final decisions on budgetary matters June 25, 2007 11

  12. Saddleback College Budget Process • Revised Budget Allocation Process Two Years ago: • Previously - Planning and Budget Committees Separate • Currently - Integrated Planning and Budget Process • Planning and Budget Council (PBC) • Membership:

  13. Saddleback College Budget Process • Four Strategic Planning Committees: • Governance & Planning Groups provide input, plans, recommendations:

  14. Saddleback College Budget Process • Process: • PBC reviews all planning documents • PBC establishes College Strategic Plan • Director of College Fiscal Services provides budget data • PBC reviews budget status • PBC makes recommendations to College President • President makes decision and informs College Community • Overriding Planning and Budget Parameters: • Increase enrollment • Safe and well maintained facilities and grounds • Increase Student retention and persistence • Culture of institutionaleffectiveness based on assessment outcomes • Fiscal Stability (Strategic Plan, SB 361 impact)

  15. Saddleback College Budget Process • College wide allocations established by Fiscal Office • Associate Faculty/overload allocations established by Office of Instruction • Deans/Directors provided with allocation amounts for operations • Deans/Directors manage and distribute operational funds based on Division plans • Fiscal Office approves all budget revisions; projects and monitors expenditures for fiscal stability

  16. Saddleback College Budget Process • Planning and budget revision: • PBC regularly makes recommendations to College President in accordance with Strategic Plan • State allocation revisions • Local income adjustments • Grants and contracts • All budget adjustments coordinated through Fiscal Office • Planning & budget is a continual year round process • President manages College budget process and is responsible for College fiscal stability

  17. SOCCCD2007-08 Tentative Budget

  18. 2007-08 Tentative Budget Assumptions • Net SB361 Revenue Increase of $12.3 Million • $7.5M 2006-07 FTES Increase to Base funding • $4.9M Increase Based on 4.53% SB361 COLA • $1.7M Increase Based on 1.50% Growth estimate • ($1.8M) One time block grant in 2006-07 • $5.4M GF Unrestricted Ending Balance carried forward from 2006-07

  19. Assumptions Continued • 6.5% Reserve for Economic Uncertainties • 10.0% Estimated Increase for Health & Welfare Benefits and Property & Liability coverage • Salary Increases: • CSEA : 4.53% per existing contract • Faculty, Classified Managers, Academic Administrators, Police Officers Association – to be determined by negotiations & board actions

  20. SOCCCD: Overview of Fund Structure2007-08 Tentative Budget • General Fund (GF): $200.4 Million, Including: • Unrestricted GF: $179.9 Million • Restricted GF: $ 20.5 Million • Other Funds*: $163.2 Million • Total All Funds: $363.6 Million * Other Funds Include: Community Education, Child Development, Capital Outlay (Including Basic Aid Projects), Debt Service, Self-Insurance, & Retiree Benefit Funds

  21. COPS Debt Retirement • 1996 Issue = $18.9M • Will Be Retired June 1, 2008 • Sufficient funds are available from prior year Basic Aid allocations to retire the debt

  22. OPEB (Retiree Benefits Liability) • Actuarial Study performed in May 2006 • Total obligation $80.2M • Unfunded Liability is $58.3M • 2007-08 Contribution to the Obligation is $5.1M • Current Year Service = $3.3M • Past Service = $1.8M • Funded with Basic Aid • Additional contributions $6.8M • $5.0M formerly used to retire COPS debt • $1.8M income from Promenade apartments

  23. “Basic Aid” Receipts • 1999-2000 $ 5,676,800 • 2000-2001 $ 9,192,300 • 2001-2002 $13,719,277 • 2002-2003 $18,419,919 • 2003-2004 $27,356,952 • 2004-2005 $40,162,878 • 2005-2006 $46,899,203 • 2006-2007* $50,566,203 • 2007-2008* **$41,976,293 * Estimated (Exact Amounts Will not Be Available Until the End of Each Fiscal Year). Per OC Tax Assessor, Secured Property Taxes were estimated to increase 9% in 2006-07, 7% in 2007-08, and 5% thereafter. A 15% decline in Supplemental Taxes is projected for 2007-08. ** Decline due to recovery of FTES at colleges in 2006-07

  24. Basic Aid Funds Included In Budget • $10.1M OPEB (Retiree Benefits) Contribution • $ 1.9M ATEP Operating Budget • $ 3.8M Phase II for Student Information System • $26k for Legislative Advocacy for Basic Aid issues • $51.1M Currently Undesignated

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