Board Study Session on Student Services Funding

December 7, 2010

Fiscal Year 2009-10

• State addressing a $24 billion budget deficit

• $157 million in cuts to general apportionment

• $106 million local property tax shortfall

• $276 million in cuts to categorical programs

• $703 million in cash deferrals

Cuts to Selected Categoricals

Program 2008-09 2009-10 % 2010-11

Basic Skills 450,929 362,293 -19.66% 362,295 EOPS 3,120,741 1,876,052 -39.88% 1,780,708 CARE 631,675 379,598 -39.91% 360,619 DSPS 2,516,071 1,573,201 -37.47% 1,170,368 Matriculation 1,874,660 907,329 -51.60% 861,948 CalWorks 855,040 533,417 -37.61% 608,706 TANF 203,048 187,491 -7.66% 131,702

Funding

DISTRICT BUDGET – FUND BALANCE

Changes in Unrestricted Balances

Year Beg Balance Revenue & Trans. Expend. & Trans. Balance  

2008 15,481,521 114,266,043 115,840,026 13,907,538 actual

2009 13,907,538 120,640,551 122,089,271 12,458,818 actual

2010 12,458,818 116,707,385 123,128,200 6,038,003 estimate

2011 6,038,003 114,996,940 114,675,587 6,359,356 budget

• During fiscal year 2009-10 the District deficit spent approximately $6.4 million. Of this amount, $3.5 million is attributed to deficit spending on employee

benefits.

Benefit Budget• Past practice was to use average benefit rates

of:• 34.34% for academic employees• 41.72% for classified employees

• These rates were intended to cover all required employer statutory benefits as well as negotiated health and welfare benefits.

• In hindsight, practice did not adequately provide for sufficient budget to pay for 100% of employer benefits.

Benefit Budgets (continued)

• Beginning 7/01/10 benefits are budgeted by benefit cost and per position.

• For every employer paid benefit, a unique account code has been created and the annual cost budgeted for by program.

• Accounting Advisory – GASB 45 – Accounting for OPEB

• “OPEB costs for active eligible employees are a direct cost to programs and grants where employees are currently charged.”

Benefit Budgets (continued)

Description Academic Classified Object Code(s)

Full-timeStatutory RatesSTRS 8.25% NA 3110PERS NA 10.71% 3220FICA NA 6.20% 3320MEDICARE 1.45% 1.45% 3340/3350STATE UNEMPLOY. INS. 0.72% 0.72% 3510/3520WORKERS' COMP 1.20% 1.20% 3610/3620 Total 11.62% 20.28%

Retirement Benefits for Current EmployeesActuarial Study 12.50% 12.50% 3712/3722

HEALTH BENEFITS Employee Employee + familyCoresource 7,997$ 26,843$ 3411/3421Kaiser 6,731$ 19,049$ 3411/3421Dental 315$ 2,073$ 3412/3422EAP 27$ 27$ 3411/3422Disability Insurance $ .17 per $100 of compensation 3415/3425Life Insurance $ .21 per $1,000 of compensation 3415/3425

Benefit Budgets (continued)

Rates using old model

Coresource Percentage -

Employee + 1 *Kaiser Percentage -

Employee + 1 *

Classified Average Salary* 46,250$ 41.72% 73.98% 64.45%Academic Average Salary* 80,500$ 34.34% 47.61% 42.14%

* Per Actuarial Study completed by Bartel & Associates dated 5/18/2009

ESTIMATED TOTAL BENEFIT COST PER EMPLOYEE

Study Session on Student Services Budgets

• Questions?