TENTATIVE BUDGET

OVERVIEW GCC BUDGET STATUS STATE BUDGET GCC BUDGET DEVELOPMENT GCC REVENUE ADJUSTMENTS GCC EXPENDITURE ADJUSTMENTS GCC BUDGET STATUS PENDING COLLEGE ISSUES CONCLUSION

GCC BUDGET STATUS

Enrollment (at P2) Category Actual FTE’s Funded at P1 Unfunded Enrollment Unfunded Revenue CREDIT14,44912,6961,753$8.00M CAREER DEVELOPMENT COLLEGE PREP 2,6132,53677$0.25M NONCREDIT1, $1.71M TOTAL18,09515,5612,534$9.96M

GCC Revenues CategoryBudgetProjectedDifference Base$75,352K $ 0 Growth 0$ 0 Prior Year Adj. 0$ 0 Prop. Tax Deficit$(2,210K)$ (2,538K)$( 328K) Part Time Faculty$ 519K$ 509K $( 10K) Lottery$ 1,950K 0 Other State$ 62K$ 65K$ 3K

GCC Revenues (Page 2) CategoryBudgetProjectedDifference Interest$ 250K$ 310K$ 60K Non-Resident$ 3,800K$ 3,200K$( 600K) Other Student Fees $ 528K $ 0 Other Local$ 77K $ 0 Federal$ 549K $ 0 Interfund$ 265K $ 0___ Total$ 81,142K$ 80,267K$ ( 875K)

GCC Expenditures CategoryBudgetProjectionDifference Certificated Salaries$37,015K$36,704K$ 311K Classified Salaries$19,112K$19,288K$ (176K) Benefits$15,171K$14,952K$ 219K Supplies$ 633K$ 552K$ 81K Services$ 6,749K$ 6,179K$ 570K Equipment$ 97K$ 42K$ 55K Other/Interfund$ 3,908K$ 3,914K$ (6K) Reserve$ 4,848K 0____$ 4,848K Total$87,533K$81,631K$ 5,902K

GCC Ending Balance Beginning Fund Balance (7/1/09) $ 6,391K Projected Revenues $80,267K Projected Expenses ($81,631K) Ending Fund Balance (6/30/10) $ 5,027K* *Equivalent to 6.16% of expenditures

STATE BUDGET

State Budget On January 8, 2010, Governor released his proposed budget for  $19.9 billion State deficit  Cuts to health and welfare programs  Extensive Cuts to Corrections  Assumed $6.9 billion in federal aid  Extension of temporary tax increases adopted as part of the State Budget  Delay in implementation of tax breaks adopted as part of the State Budget

State Budget Effect on Community Colleges Overall Community Colleges fared well  2.2% enrollment growth  -0.38% COLA  $39.9 million property tax adjustment  Suspension of mandated cost claims  $20 million transfer to Career Tech Education; $10 million from EOPS and $10 million from Part Time Faculty Parity  Adds EOP&S, Funds for Student Success and Basic Skills to programs subject to categorical flexibility  Suspension of new competitive Cal Grant awards

May Revise State Revenues were almost $3 billion over projections from December through March In April, income tax receipts were significantly lower due to 12+% unemployment eliminating surplus State deficit now at $19.1 billion $6.9 billion federal aid was not realistic Eliminate CalWORKs Welfare to Work program and Child Care programs

May Revise Highlights Community College Budget virtually unchanged from Governor’s budget Governor made a public statement that he would veto any budget that provided less funding for higher education 2.2 Percent growth remained in budget -0.38% COLA remained in budget $6 million additional property tax backfill funds Eliminated proposal to suspend competitive Cal Grants Redirects $26.7 million in State funding for CalWORKs

State Budget Status Both the Assembly and Senate budget subcommittees have developed proposals Assembly Proposal  Adds $3 million more for enrollment growth  Adds $35 million for categorical backfill  Provides $100 million for Economic and Workforce development  Adds $22 million to eliminate negative COLA  Rejects $10 million transfer from EOP&S and Part Time Faculty Compensation to Career Tech Ed  No fee increase

State Budget Status (cont.) Senate Proposal  Adds $22 million to eliminate negative COLA  Rejects $10 million transfers from EOP&S and Part Time Faculty Compensation program  No fee increase Both Assembly and Senate versions require tax increases Joint Budget Conference Committee has been formed to reconcile and consolidate two legislative proposals Entire Assembly and Senate must approve with a 2/3rds vote

Budget Proposal Summary Item May Revise Assembly Proposal Senate Proposal COLA($22.1M)- - Enrollment Growth $126M$129M$126M EOP&S $54M$64.3M Economic Development 22.9M$100M$22.9M Part Time Faculty Compensation $14.9M$24.9M Categorical Backfill-$35.0M-

TENTATIVE BUDGET DEVELOPMENT

GCC Budget Development Process Unrestricted General Fund Tentative Budget is based on May Revise  $1.86M budget cut/new revenue still required  Tentative Budget balanced by: Eliminating Winter intersession “Must Do” requests for funded Additional Categorical support not funded SUI increase not funded  Includes: 5% General Reserve established - $4.2M $500K Contingency Reserve (On-going) Use of Ending Fund balance over 5% to balance

Board Budget Preparation Resolution Strive to reach growth enrollment FTEs Strive to avoid reductions through layoffs of permanent employees Establish a five percent (5%) General Reserve Establish a $500K Contingency Reserve

Rollover Budget $6.7 million deficit in Rollover Budget  All vacant positions put back in budget  1%/1.5% pay cut restored  Exempt Cost augmentations included  $225K augmentation for Winter intersession  $700K budgeted for categorical support  $127K reserve set up for amount employee groups contributed in over required amount

Projected Revenue Changes Loss of federal funds ($0.548M) -0.38% COLA($0.277M) Apportionment Adjust.($0.328M) Part Time Faculty Programs ($0.159M) None Resident Tuition($0.600M) Blue Shield Rebate($0.215M) Total New Revenue ($2.127M)

Expenditure Adjustments Step and Column ($ 838K) Health (10% inc)* ($ 297K) Dental $ 25K Utilities $ 226K Postage$ 42K Legal$ 32K PERS Retirement ($ 100K) Other Benefits ($ 25K) Winter Intersession ($ 225K) Total Expenditure Adjustments ($1,160K) *Estimate

Budget Actions Taken Hiring Freeze $2.043M Eliminate second summer $0.845M Over $10K account review$0.279M 2.2% growth revenues$1.500M Reserves over 5%$0.700M credit from emp. Groups$0.126M 3% pay cut from managers$0.248M Total Actions Taken$5.741M

Enrollment Projection (in FTE’s) Credit $4,565 Noncredit $2,745 CDCP $3,232 Total Base12, , , Target (+2.2%)12, , , P2 Report14,448.71,033.62, ,094.8 Block Schedule (8% red.)(1,155.9) Eliminate 2 nd Summer (40% reduction) (577.1)(59.3)(149.8)(786.2) Projection12, , ,152.7 Unfunded(259.3)555.0(129.5)166.2 Revenue($1.18M)$1.52M($0.42M)($0.08M)

Additional Needs Identified “Must Do” Requests $0.170M Additional categorical support$0.380M State Unemployment Insurance$0.236M (0.3% to 0.72%) Full Time Faculty Obligation*$0.080M Total Additional Needs$0.866M *Four hires

“Must Do” Requests Oracle License $55.0K Software license fees$75.4K Copier maintenance agreements$ 5.8K Bank Fees$ 6.0K Student transportation$14.2K International student recruitment$14.0K Total “Must Do”$170.4K

Budget Status Rollover Budget Deficit($6.737M) Budget Actions Taken $5.741M Additional Needs Identified($0.864M) Total Cuts Still Needed ($1.860M)

Budget Cut Options Across the Board Cuts on non-personnel line items Class reductions/backfill of vacancies Classified hourly employees Student Workers Hourly librarians/counselors Overtime Equipment Staff Development, Study Abroad, Baja, Fire Academy

Budget Cut Principles Minimize impact on students Proportionate cuts to all Divisions (Instruction, Student Services, Admin.) Proportionate cuts to all employee groups (Guild, CSEA, Management) Budget cuts evaluated with Master Plan Permanent Employee layoffs only as a last resort Strive to meet growth cap Minimize impact of main semesters Protect 5% reserve

Pending College Issues Adoption of State Budget  2.2% Growth funding $1.86M Budget Cut Required 2011 Health Insurance Premium Increase  10% increase budgeted Additional “Must Do” request funding Ending Balance in excess of 5 percent Collective Bargaining

Conclusion State’s fiscal problems continue to impact College budget College understood would be a challenging budget College will continue to have budget difficulties until COLA or new discretionary revenues are received