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All College Budget Forum

All College Budget Forum. Mission College October 11, 2013. Overview. The national and state economic recession and recovery has a long-term impact Not meeting FTES targets and efficiency targets impacts our revenue generation

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All College Budget Forum

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  1. All CollegeBudget Forum Mission College October 11, 2013

  2. Overview • The national and state economic recession and recovery has a long-term impact • Not meeting FTES targets and efficiency targets impacts our revenue generation • Both colleges and the district have balanced budgets through a combination of one-time cuts and contributions from the Land Corporation

  3. Overview • Decline in student enrollment results in lowered ongoing revenue • To balance the budget all entities must identify ongoing, permanent reductions • MC=$1.35 Million • District=$630,000 • WVC= $1.5 Million • Basic Aid provides glimpse of hope from future revenue growth

  4. Background

  5. Decline from Peak (-2769)

  6. FTES FY 13/14 Target @ 15,898 6 yr. decline of 1846 FTES

  7. MC-Total Budget 2009-2013

  8. FY 12/13 Budget Recap • Adopted budget was balanced • Prop. 30 passed – no mid-year “trigger” cuts • Missed out on growth funding (177 FTES ) • Create EPA account (Prop 30 $ at $100/FTES) • District foregoes $50M in restoration funding • WVC and MC missed their FTES targets by 250 FTES each • On State “stability”, but entered Locally Funded Basic Aid

  9. Basic Aid Definition • Basic aid occurs when local property tax revenue exceeds total funding that the State provides as calculated by SB 361 apportionment. • Local property taxes and enrollment fees are primary source of revenues.

  10. The Bucket Analogy • 2012/13 funding formula, District received $5.4M in state apportionment • Local property tax/student fees exceeded $5.4 in apportionment, entered Basic Aid

  11. Revenue Impact of Basic Aid • District’s Core Funding is notaffected by issues at the state level • State budget shortfalls • Community College system shortfall • Deferrals

  12. Revenue Impact of Basic Aid • District continues to receive funding for: • Student Categorical Funds • EOPS, DSPS, Financial Aid, Student Success • Lottery • Mandated Costs • EPA • Other grants • Funding dependent on # of students/FTES

  13. Greater Impact of Basic Aid • Better planning • More stability in revenue • Less impact from the ups and downs of state funding • Potential for incremental growth • Slow growth dependent on Santa Clara County tax revenues

  14. Multi-Year Basic Aid Projections

  15. Fiscal Stability Planning • 2013-2014 • One Time Budget Reduction ($578K MC) • Reductions recommended by GAP Spring 2013 • Basic Aid Status • Revenues from property taxes • Potential Slow Growth • One time funds • Participatory Task Force to determine use

  16. FY 13/14 District Budget Budget development approach • Balance with one-time funds for FY 13/14 • Estimated shortfall – $4.5 million • Available revenues • $3.0 million from the Land Corporation • $1.5 million District Services/Colleges • $578,000 from Mission College

  17. One Time Reductions 13/14

  18. Fiscal Stability Planning • Ongoing Structural Deficit • Living year-to-year with • One time cuts • Land Corp infusions of dollars • 14/15 • Ongoing Permanent Budget Reduction • District – approximately $3.5M • MC portion – approximately $1.35M

  19. Constraints on Reductions • 50% Law • Full Time Obligation Number (FON) • Required to be 311 based on state requirements • Fine from State is significant • Timing is awkward • Likely will be hiring for Fiscal Year 2014-15 to meet this obligation

  20. It’s Bigger Than Us • Structural and Economic Changes • End of the wave of Baby Boomer children • Improving Silicon Valley economy • We are not alone in this, but we still have to adjust to this new environment • Our only growth will come from attracting new students with new and refreshed programs and higher retention

  21. Structural Deficit • Reliance on Land Corporation and One Time Cuts to balance budget each year • Smaller FTES & Headcount = Loss of Revenue • 12-13 Target missed by 250 FTES • 83 FTES from Prop 30 • Restoration not restored (based on Growth) • Missing Efficiency Targets 550-555. • 10 points = $400K

  22. FY 14/15 Budget Planning • On-going budget reductions for FY 14/15 • Estimated shortfall – $5.0 million • Available revenues for 14/15 • $3.5 million budget reduction • $1.5 million from the Land Corporation • On-going budget reductions continue beyond FY 14/15

  23. Re Cap--How did we get here? • Past 4 budgets have been balanced with one time funding—Not Sustainable • Combination of one-time cuts and Land Corp Stability Funding • Enrollment decrease=revenue decrease • 12/13 FTES target—MC short by 250 ($1.2M) • Prop 30 District short by177 FTES-MC =83 ($400K) • Serving almost 3000 less students • Non Peak Efficiency • Target short by 20 points ($800K)

  24. Next Steps • Colleges Develop Budget Reduction Plans for FY 2014/15 and beyond • District develops Board policy for Basic Aid Funds Allocation • Based Participatory Governance • District Council Task Force recommendations

  25. Looking to the Future • Financial stability in short term • Reductions address structural factors • Greater stability due to Basic Aid • Never a guarantee, but should not face cuts in the immediate future • Potential for growth • Basic Aid provides opportunity for growth in revenue in future years

  26. Questions and Discussion

  27. Reference Slides for Q&A Follow This Slide

  28. Basic Aid Districts • Marin • Mira Costa • San Mateo • South Orange County • San Jose-Evergreen • West Valley-Mission

  29. FY 13/14 State Budget for Community Colleges

  30. Full-time Faculty Obligation

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