All CollegeBudget Forum

Mission CollegeOctober 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

Both colleges and the district have balanced budgets through a combination of one-time cuts and contributions from the Land Corporation

OverviewDecline 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

Background

Decline from Peak (-2769)

23,314 25,072 26,292 25,153 25,035 23,5232007-08 2008-09 2009-10 2010-11 2011-12 2012-13

21,000

22,000

23,000

24,000

25,000

26,000

27,000

MC Unduplicated Head Count

MC

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

MC-Total Budget 2009-2013

2009-10 2010-11 2011-12 2012-13 2013-14 $-

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

$45.0

$31.0 $29.6 $30.0

$28.5 $28.5

$44.3 $42.9 $42.4 $43.0 $43.7

Fund 100 in $MTotal in $M

Total Budget Mission College

(including grants)

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

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.

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

Revenue Impact of Basic Aid

District’s Core Funding is not affected by issues at the state level State budget shortfalls Community College system shortfall Deferrals

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

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

Multi-Year Basic Aid Projections

1.57% COLA 1.8% COLA 2.2% COLAActuals Estimated Estimated Estimated

2012-2013 2013-2014 2014-2015 2015-2016State Apportionment - - - - Educational Protection Account (EPA) 1,563,910 1,589,800 1,589,800 1,589,800 Enrollment Fees 8,393,139 8,292,422 8,292,422 8,292,422 Property Taxes 70,748,792 71,290,122 73,428,826 75,631,691 Less Property Taxes Excess (Basic Aid Funding) (927,522) (141,508) (1,394,060) (1,794,751)

Total Computational Revenue 79,778,319 81,030,836 81,916,988 83,719,162

Assumptions: -Property tax rate increase by 3% annually (exclude one-time RDA funding from calculation) -FTES goal at 15,898 -Enrollment fees decrease by 1.2% (200/16,098) -Reduction of $.5 million in 14/15 and 15/16 due to basic allocation adjustment (less than 10,000 FTES)

Multi-Year Basic Aid Analysis

Fiscal Stability Planning2013-2014

One Time Budget Reduction ($578K MC)Reductions recommended by GAP

Spring 2013 Basic Aid Status

Revenues from property taxesPotential Slow GrowthOne time fundsParticipatory Task Force to determine

use

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

One Time Reductions 13/14Item # Position / Description Account Number Total Reduction

1Fall 13/14 Salary Savings Reassign Time C Harrison

120-280950/280976-6840-51227-464 $ 42,800

2Fall 13/14 Fringe/Health Benefits C Harrison

120-280950/280976-6840-53xxx-464 $ 14,150

3Spring 13/14 Salary Savings Reassign Time C Harrison

120-280950/280976-6840-51227-464 $ 42,800

4Spring 13/14 Fringe/Health Benefits C Harrison

120-280950/280976-6840-53xxx-464 $ 14,150

5Fall 13/14 Salary Saving from RT supported by Grants

120-280950/280976-6840-51227-464 $ 7,500 $ 121,400

6 Reduction from Interest Income from various Funds--carryover funding from FY12/13 591-261200-7310-57300-000 $ 64,224 7 Reduction from Graphics / Printing 100-230200-6010-55300-000 $ 10,000 8 Reduction from Community Education Department's Revenue 591-260000-7310-57300-000 $ 10,000

9Reduction from Research & Planning

100-200500-6600-55160-000 $ 5,000

10 Budget offset from Lottery Supplies to HM 100-232600-1300-54110-000 $ 50,700

11Reduction from Evening Administration

100-221000-6700-51450-000 $ 4,000

12 Reduction from Health Services Fund Balance 121-255100-7310-57300-000 $ 50,000 13 Reduction from Campus Center Fund Balance 732-200600-7310-57300-000 $ 20,000

14Reduction from President Office

597-200600-7310-57300-000 $ 5,000

15 Reduction from Admin Services - Duplicating Center 597-220300-7310-57300-000 $ 25,000 16 Reduction from Admin Services - Facility Rental 597-220600-7310-57300-000 $ 10,000 17 Reduction from Hospitality Mangement Revenue 597-232600-7310-57300-000 $ 15,000

18Reduction from Library Revenue

597-271210-7310-57300-000 $ 9,900

19 Reduction from IIS Revenue 591-260100-7310-57300-000 $ 15,000 20 Reduction from FY13/14 Interest projection 591-261200-7310-57300-000 $ 35,000

21Reduction from Child Development

330-281230-7310-57300-000 $ 2,000

22 Reduction from Land Corp 120-220900-7310-57300-831 $ 125,776 Target after CBO meeting on July 16, 2013 $ 578,000

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

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

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

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

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

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)

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

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

Questions and Discussion

Reference Slides for Q&A Follow This Slide

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

FY 13/14 State Budget for Community Colleges

Item January Proposal

May Revise Final Budget

Apportionment $196.9M $87.5M COLA$89.4M Growth

$87.5M COLA$89.4M Growth

Student Success $50M $50M

On-line Education $16.9M $16.9M $16.9M

Adult Education $315.7M $30M for 2 years$500M for FY 15/16

$25M for 2 years$500M for FY 15/16

Deferral buy-down

$179M $179.9M for FY 12/13$64.5M for FY 13/14

$179.9M for FY 12/13$30M for FY 13/14

90-unit cap Proposed Withdrawn Deleted

2011/12 2012/13 2013/14

2014/15 (projecte

d)

Shortfall $2.9M $6.0M $4.5M $5.0M

Revenues

-On-going budget reduction $3.0M $3.5M

-One-time budget reduction $2.9M $1.5M

-Bargaining concessions $1.5M

-Land Corp stability funding $1.5M $1.5M $1.5M

-Land Corp additional funding $1.5M

TOTAL REVENUES $2.9M $6.0M $4.5M $5.0M

Additional

-Possible mid-year trigger cuts (covered by Land Corp)

$1.56M $5.3M

-Workload reduction $4.8M (6.2%)

-Workload restoration $0.75M (waived)

$1.7M (waived)

-Health Benefit Cap --

-RDA dissolution --

Full-time Faculty Obligation

Fall 2010

Fall 2011

Fall 2012

Fall 2013

Fall 2014

FON Obligation 323.1 323.1 315.1 315.1 311

Actual (or projected) 306 305 309 306

Reported (or projected)

312 310 310 311

FT Faculty # 68.02% 68.23% 68.43%