1 demystifying the budgeting process pierce college aft 1521 february 25, 2010 ken takeda vice...
TRANSCRIPT
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Demystifying theBudgeting Process
Pierce College AFT 1521February 25, 2010
Ken TakedaVice President, Administrative Services
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Presentation Outline
Budget Allocation Process Funding of K-14 Education Funding of Community Colleges LACCD Budget Pierce College 09/10 Budget Budget Calendar Questions and Answers
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Budget Allocation Process
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Funding of K-14 Education
California Community Colleges (CCCs) are part of state’s Master Plan for Higher Ed but are not funded same way as UC and CSU systems
For funding, CCCs are linked to K-12 districts Minimum annual funding for K-12 and CCCs is
determined by Proposition 98 Proposition 98:
Amendment to state constitution passed in 1988 Purpose: Guaranteed funding source that grows each
year with economy and number of students Source: General fund, local property taxes
One of three formulas (“Tests”) is used to determine funding each year; which test depends on how economy and General Fund revenues grow from year to year:
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Funding of K-14 Education
Test 1—Share of General Fund. Provides 39 percent of General Fund revenues. Had not been used since 1988-89.
Test 2—Growth in Per Capita Personal Income. Increases prior year funding by growth in attendance and per capita personal income. Operative in years with normal to strong General Fund revenue growth.
Test 3—Growth in General Fund Revenues. Increases prior-year funding by growth in attendance and per capita General Fund revenues. Operative when General Fund revenues fall or grow slowly.
Suspension: Legislature can suspend Prop 98 guarantee with 2/3 vote for one year and provide any level of K-14 funding.
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Funding of K-14 Education
By definition, Prop 98 sets maximum funding available to other state programs
Prop 98 general fund commitment = about 45% of state general fund
Weak economy and slow revenue growth create budget pressures for all programs; K-12 and CCCs are not insulated from this because of Prop 98
Declining Prop 98 guarantee due to ADA and economic trends
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Funding of K-14 EducationOngoing Proposition 98 Funding ($ in millions)
Program 2008-09 2009-10 2010-11
K-12 Education
General Fund $30,260 $30,844 $32,023
Local property tax 12,726 13,237 11,950
Subtotals 42,986 44,082 43,974
Community Colleges
General Fund 3,918 3,722 3,981
Local property tax 2,011 1,953 1,913
Subtotals 5,929 5,675 5,895
Other Agencies 105 94 85
Total Proposition 98 $49,019 $49,851 $49,954
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Funding of Community Colleges
Community colleges’ share of Prop 98 allocation = 11-12%; balance goes to K-12
State Chancellor’s Office allocates CCCs’ share of Prop 98 funding to local districts based on SB 361 (Scott, 2006), which: Replaced complex and outdated funding formula “Equalized” funding rates across districts Recognized fixed operating costs of colleges; fairer
allocation to smaller colleges Established (in Ed Code) beginning funding rates for
credit, non-credit, and career development and college preparation (CDCP) non-credit full-time equivalent students (FTES)
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Funding of Community Colleges
1 FTES = 525 Contact Hours Standard Measure Used Statewide for…
1 student, enrolled in 5 classes per primary term, at 3 hours per week, per class for 17.5 weeks per primary term, attending 2 primary terms, yields
Funding Key performance indicator Productivity measure Program Review
525 hours per year
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Funding of Community Colleges
Unrestricted General Fund
“Foundation” or “basic” funding per institution. For FY 2010-11: FTES=>20,000 (large college) $4,428,727 10,000<=FTES<20,000 (medium) $3,875,136 FTES<10,000 (small) $3,321,545
Revenue per FTES. For FY 2010-11: Credit $4,564.83 Non-credit $2,744.96 CDCP $3,232.07
Annual cost-of-living adjustment (COLA) Above funding = Base Revenue Enrollment growth and restoration funding
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Funding of Community Colleges
Concept Example Base 100 FTES = prior year funded total (base + growth)
Actual 110 FTES = reported: projected or actual
Actual Growth 10 FTES actual above base
Growth Rate/Cap 6% of Base = 6 FTES
Funded Growth 6 FTES actual growth to cap
Funded Total 106 FTES = base + funded growth
Over Cap 4 FTES not funded by apportionment, eligible for Over Cap funding
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Funding of Community Colleges
Unrestricted General Fund (cont):
Other unrestricted General Fund allocations: Lottery Apprenticeship Non-resident tuition Part-time faculty compensation Other state
Local sources: Interest income Dedicated revenues
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Funding of Community Colleges
Restricted General Fund
State separately funds 22 categorical programs that are part of CCCs’ “restricted” General Fund
Highest funded in 2009-10: Basic Skills, CalWORKS, CTE, DSPS, Economic Development, EOPS, Matriculation, Student Fin Aid admin
Other state support: block grants, SB1133 CTE Federal: Perkins (VTEA), veterans ed, work study Local: Community Services, Health Services,
Parking
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Funding of Community Colleges
Other Funds
In addition to the General Fund, community college districts maintain other funds: federally-supported, state-supported, locally-funded
Federal: Student financial aid, building State: capital outlay/special reserve, child
development (CDCs), student financial aid Local: Bookstore, capital outlay, cafeteria, debt
service, general obligation bond/building
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LACCD Budget—All Funds
FUND 2008-09 Budget 2009-10 Budget
GENERAL FUND $ (in thousands) $ (in thousands)
Unrestricted 604,022 574,052
Restricted 87,331 97,538
TOTAL GENERAL FUND 691,353 671,591
BOOKSTORE 38,818 40,211
CAFETERIA 3,726 3,303
CHILD DEVELOPMENT 4,153 3,864
SPECIAL RESERVE 136,303 153,910
BUILDING 1,037,917 825,864
FINANCIAL AID 115,995 156,029
DEBT SERVICE 410 7,310
TOT APPROPRIATIONS 2,028,675 1,862,082
Less Interfund Transfers 6,676 12,591
TOTAL AVAILABLE 2,021,999 1,849,491
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LACCD Budget—Allocation Model
Uses SB 361 funding formula to distribute state general revenue to colleges as part of Unrestricted General Fund
Each college receives base allocation based on college size + funding for credit, noncredit and enhanced noncredit FTES at state-funded rates
Small colleges received supplemental basic allocation of $500,000 to its basic allocation in FY2006-07, adjusted by COLA in future years; Trade-Tech receives $500,000 for high-cost programs
Colleges are assessed for District Contingency Reserve at 5% of unrestricted General Fund; college reserves additional 1% of its unrestricted General Fund
Each college is assessed for centralized and District Office services based on share of total FTES
Balances are retained by colleges and District Office
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LACCD Budget—Unrestricted GF
College 2008-09 Budget 2009-10 Budget
City 60,736,473 55,885,265
East 110,398,061 102,973,680
Harbor 28,910,982 28,080,909
Mission 26,661,625 25,718,121
Pierce 69,619,567 64,828,425
Southwest 22,277,746 21,011,252
Trade-Tech 50,789,838 48,062,358
Valley 52,229,540 49,659,130
West 31,464,972 28,911,467
ITV 1,458,644 1,493,111
College Total 454,547,448 426,623,718
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LACCD Budget—Unrestricted GF
Location 2008-09 Budget 2009-10 Budget
College Total Forward
454,547,448 426,623,718
District Office 26,375,297 22,765,233
Information Tech -- 10,761,712
Centralized Accounts 67,563,265 47,254,793
Contingency Reserve 27,182,613 25,690,166
Sheriff’s Contract 13,000,000 12,951,047
Categorical Support -- 12,951,536
Restricted Deficit 1,243,597 888,672
College Reserve 13,868,981 14,119,402
Total Unrestricted 604,022,201 574,052,479
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Pierce College 09/10 BudgetRevenue Source #FTES Rate Amount
Basic Allocation $ $ 3,875,136
Credit 14,775.16 4,564.83 67,446,006
Non-Credit 296.83 2,744.96 813,695
CDCP -
3,232.07 -
Total Base Revenue $ 72,134,837
Less: Workload Red (2,714,406)
Net Base Revenue $ 69,420,431
Non-Resident Tuition 1,524,843
Dedicated Revenues 719,318
Lottery 1,974,584
Interest/Other 641,651
Total Revenues $ 74,280,827
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Pierce College 09/10 Budget
Adjustment #FTES Rate Amount
Total Revenues $ $ 74,280,827
Assessment--DW, DO:
• Total Credit 15,366 1,030.65 (15,836,928)
• Non-Credit 296 606.82 (179,881)
Sheriff's Contract (1,583,948)
ITV redistribution 22,290
08-09 Balance Forward 8,488,659
Additional Reduction (362,594)
Revised Allocation $ 64,828,425
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Pierce College 09/10 Budget
Description 2009-10 Final % of Total
Certificated Salaries $35,142,515 54.2
Non-Certificated Salaries 12,438,227 19.2
Benefits 11,053,075 17.0
Printing & Supplies 991,222 1.5
Operating Expenses 2,191,933 3.4
Capital Outlay 479,377 0.7
Other 2,532,076 3.9
Total 64,828,425 100.0
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Pierce College 09/10 Budget
Description 2009-10 BudgetProjected
Expenditures
Certificated Salaries 35,142,515 30,710.336
Non-Certificated Salaries 12,438,227 12,193,328
Benefits 11,053,075 10,952,167
Printing & Supplies 991,222 1,172,094
Operating Expenses 2,191,933 3,441,690
Capital Outlay 479,377 408,088
Other 2,532,076 40,059
Total 64,828,425 58,917,763
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Budget Calendar for FY 2010-11
Jan 8: Governor’s Budget Mar 5: Preliminary Budget May 14: Revised Governor’s Budget Jun 30: Tentative Budget Sep 15: Final Budget
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Questions and Answers
Thank you for your time and attention
Contact information:
Bill de Rubertis, retireeBudget Committee Co-Chair EmeritusPierce College6201 Winnetka AvenueWoodland Hills, CA [email protected]