GAVILAN JOINT COMMUNITY COLLEGE DISTRICT BUDGET WORKSHOP Board of Trustees Laura Perry - Esq., – President Mark Dover - Vice President Lois Locci, ED D. – Clerk Jonathan Brusco - Trustee Tom Breen, Esq.– Trustee Kent Child - Trustee Walt Glines – Trustee Adrian Lopez - Student Trustee Administration Dr. Kathleen A. Rose — Superintendent/President

 Adopted State Budget Summary  Local Fund Budgets & Challenges  st & 2nd Principle Apportionment  Advanced Principle Apportionment  Enrollment Stability for  50% Law and Calculation GAVILAN COLLEGE BUDGET WORKSHOP TOPICS OF DISCUSSION 2

GAVILAN COLLEGE BUDGET WORKSHOP STATE BUDGET SUMMARY  January Budget – Used for Preliminary Budget.  May Revise – Used for Tentative Budget.  Final Budget – Passed on time June 15 th (Sixth Year) – Due to Proposition 25. State Budget passed $71.9 Billion, funding increases by $288 Million over last year. This gives us the information to complete our local budgets: Unrestricted General Fund - General College/District Operations. Restricted Categorical Funds – e.g. EOPS/DSPS/SSSP/Student Equity. - Specific Outcomes with Reporting Requirements 3

GAVILAN COLLEGE BUDGET WORKSHOP STATE BUDGET UPDATE Great Year Restricted/Categorical Programs:  Student Success and Support Program (SSSSP) $100.0 M  Student Equity $100.0 M  Strong Workforce Program $200.0 M  Basic Skills (increase) $30.0 M  CTE Pathways Program $48.0 M  Telecommunication & Technology $12.0 M  Deferred Maintenance/Instructional Equipment $184.6 M *  Energy Efficiency projects & workforce development $49.2 M *  Innovation Awards $25.0 M *  Online Education Initiative $20.0 M *  California Promise Program $15.0 M *  CalWORKS $8.7 M  EEO program $2.0 M 4

GAVILAN COLLEGE BUDGET WORKSHOP LOCAL BUDGET UPDATE Gavilan College Highlights Cost of Living Adjustment (COLA).00% - $000,000 Enrollment Restoration/Growth.51% - $128,678 Base Increase $350,000 Education Protection Account (Prop 30) - $4.4 million Block Grant (One-Time) – $476,865 Schedule Maintenance/Instr. Equipment - $834,373 Prop 39, Energy Efficiency Projects - $189,306 5

GAVILAN COLLEGE BUDGET WORKSHOP GOVERNMENTAL FUNDS GROUP Resources used or available for use in conducting a district’s educational objectives are included in the Governmental Funds Group. Gavilan College has established the following funds that are within the group of governmental funds:  General Fund – Unrestricted - Used to account for resources available for the general purpose of the district’s operations and support of its educational program. 6

GAVILAN COLLEGE BUDGET WORKSHOP GOVERNMENTAL FUNDS GROUP  General Fund – Restricted - Used to account for resources available for the operation and support of the educational programs of the district that are specifically restricted by laws, regulations, donors, or other outside agencies as to their expenditures. The majority of these funds must be expended within the fiscal year. Unexpended funds are returned to the funding agency. The primary difference between restricted funds and unrestricted funds is the fact that externally imposed restrictions will not allow use of funds for any purpose other than that specified. In contrast, unrestricted funds may be used for any legal purpose deemed necessary. 7

GAVILAN COLLEGE BUDGET WORKSHOP GOVERNMENTAL FUNDS GROUP  Special Revenue Funds - Used to account for the proceeds of specific revenue resources whose expenditures are legally restricted. These funds are not directly related to the educational program of the district but provide a service to students. Gavilan College has two special revenue funds: the Parking Fund and the Child Development Center Fund.  Capital Projects Fund, Other - Used to account for financial resources used for the acquisition or construction of capital outlay projects such as buildings, sites, site improvements, library books and equipment. Gavilan College uses this fund primarily each year for scheduled maintenance projects funded in part by the state as well as for new building construction. 8

GAVILAN COLLEGE BUDGET WORKSHOP GOVERNMENTAL FUNDS GROUP  Capital Projects Funds, Bond – Used to account for financial resources secured through voter approved general obligation bonds and the associated expenditures.  Debt Service Fund - Used to account for the accumulation of funds for payment of long-term debt obligations. Gavilan College’s long term debts are obligations of the general fund. Funds are transferred from the General Fund to the Debt Service Fund for accounting and payment purposes. 9

GAVILAN COLLEGE BUDGET WORKSHOP FIDUCIARY FUNDS GROUP The Fiduciary Funds Group is used to account for assets held by the district in a trustee or agency capacity.  The Financial Aid Fund is an agency fund. Gavilan College accounts for the disbursement of federally funded PELL Grants and serves as fiscal agent for that purpose. The Financial Aid Fund is an agency fund.  Gavilan College also utilizes two trust funds: Associated Student Body or ASGC and the Student Center Fund. A trust fund is one where a district recognizes revenues and expenditures related to trust activities and does exercise some discretion in the expenditure of those funds. 10

GAVILAN COLLEGE BUDGET WORKSHOP SCHEDULE OF RESOURCES AVAILABLE TO OPERATE Tentative Budget Fiscal Year Unrestricted General Fund $32,449, % Instructional Equipment 107, % Parking Fund 104, % Restricted General Fund 13,224, % Child Development Center Fund -0.00% Capital Projects Fund 10,817, % Measure E Debt Service Fund 6,060, % Measure E Construction Fund 365,557.52% Long Term Debt Fund % Associated Students ASGC Fund 402, % Financial Aid Fund 6,494, % Student Center Fund 117, % Total Expenditures $ 70,143, % 11

GAVILAN COLLEGE BUDGET WORKSHOP GROWTH ALLOCATION FORMULA New formula effective last year  “Primary factors” to include individuals under/over 25 within district boundaries without a college degree (50% factor)  Number of unemployed (25% factor)  Households below the poverty line (25% Factor)  Pell Grant award annual percentage (new this year) Focus on “primary missions of the segment” (i.e., credit and noncredit courses excluding NC courses for older adults, home economics, and health & safety education) Out of a possible 2% the most we can earn is.51% 12

GAVILAN COLLEGE BUDGET WORKSHOP CHALLENGES FOR OUR DISTRICT 13

GAVILAN COLLEGE BUDGET WORKSHOP BUDGET COMMITTEE The Budget Committee provides a lot of time and effort to the District Budget Process. Thank You!! 14

GAVILAN COLLEGE BUDGET WORKSHOP UNRESTRICTED GENERAL FUND SUMMARY Unrestricted General Fund 10 CurrentTentative ActualBudget FY14/15FY15/16FY16/17 Revenue Description Federal 12,605 $ - State 11,863,928 15,068,850 13,713,690 Local 18,298,513 19,175,501 20,334,637 Total $ 30,175,046 $ 34,244,351 $ 34,048,327 Expenditures: 1000: Academic Salaries $ 11,333,348 $ 12,205,495 $ 11,866, : Non-Instructional Salaries 5,279,005 5,608,951 6,059, : Employee Benefits 5,957,424 6,458,064 7,482, : Books and Supplies 464, , , : Services and Other Operating Expenses 5,039,790 6,090,183 5,859, : Capital Outlay 160, , : Financial Aid & Scholarships & Debt Svc Total Expenditures $ 28,234,924 $ 31,470,547 $ 32,449,367 Excess of Revenues Over Expenditures Prior to Intra/Interfund Transfers 1,940,122 2,773,804 1,598,960 Intra/Interfund Transfers Out 1,812,274 1,625,988 1,598,960 Intra/Interfund Transfers In Net Change in Ending Fund Balance $ 127,848 $ 1,147,816 $ - Beginning Fund Balance 2,705,860 2,833,708 Ending Fund Balance $ 2,833,708 $ 3,981, %12.03%11.69% 15

GAVILAN COLLEGE BUDGET WORKSHOP GENERAL FUND EXPENDITURE ASSUMPTIONS 16

GAVILAN COLLEGE BUDGET WORKSHOP FIRST PRINCIPAL APPORTIONMENT 17

GAVILAN COLLEGE BUDGET WORKSHOP SECOND PRINCIPAL APPORTIONMENT 18

GAVILAN COLLEGE BUDGET WORKSHOP ADVANCE PRINCIPAL APPORTIONMENT 19

GAVILAN COLLEGE BUDGET WORKSHOP APPORTIONMENT RECAP 20

GAVILAN COLLEGE BUDGET WORKSHOP FULL TIME EQUIVALENT STUDENTS 21

GAVILAN COLLEGE BUDGET WORKSHOP TOTAL COMPUTATIONAL REVENUE 22

Education Code (d):Put In Place in 1961 “There shall be expended during each fiscal year for payment of salaries of classroom instructors by a community college district, 50 percent of the district's current expense of education.” Title 5 Section (a): a)“Salaries of classroom instructors” as used in Education Code Section means: (1) that portion of salaries paid for purposes of instruction of students by full-time and part- time instructors employed by the district, and GAVILAN COLLEGE BUDGET WORKSHOP 50% LAW & CALCULATION 23

(2) all salaries paid to district classified employees who are: (A) assigned the basic title of “Instructional Aide” or other appropriate title designated by the governing board which denotes that the employees’ duties include instructional tasks, and (B) employed to assist instructors in the performance of their duties, in the supervision of students, and in the performance of instructional tasks... An employee shall be deemed to be under the supervision of an instructor for the purpose of Education Code Section if the employee performs duties under the general direction of an instructor. In addition, salaries of classroom instructors shall include the cost of all benefits provided such instructors and instructional aides. GAVILAN COLLEGE BUDGET WORKSHOP 50% LAW & CALCULATION 24

 50% Law - Original Intent: Legislative history demonstrates that the objective was to decrease class size in California’s public schools. Current Problems with Law: 1.Any release time to engage in collective bargaining counts against 50% Law, because it takes faculty out of the classroom; thereby reducing instructional costs. 2.Expenditures for classroom technology, hardware and software needed to offer online/distance education, instructional designers, and online tutors are not considered costs of instruction under 50% Law model. GAVILAN COLLEGE BUDGET WORKSHOP 50% LAW & CALCULATION 25

GAVILAN COLLEGE BUDGET WORKSHOP 50% LAW INFORMATION Exemptions to Fifty Percent Law: 1.Rents and Leases 2.Lottery Expenditures 3.Fixed Assets 4.Community Support Expenditures 26

GAVILAN COLLEGE BUDGET WORKSHOP 50% LAW INFORMATION Unanticipated Expenditures. Unanticipated, unbudgeted, and necessary expenditures can result in the district’s inability to comply with the Fifty Percent Law. Litigation, arbitration, costs of energy, facilities maintenance, employee benefits, property insurance and security costs are among some of the items causing concern. 27

GAVILAN COLLEGE BUDGET WORKSHOP 50% LAW INFORMATION The District reports the 50% Calculation on the Annual Form CCFC Year Calculation Was 51.81% Growing Costs that the District has no control over currently are causing this percentage to reduce.  Health Benefits increases  STRS & PERS increases 28

GAVILAN COLLEGE BUDGET WORKSHOP WHY BOTHER TO BUDGET? 29

GAVILAN JOINT COMMUNITY COLLEGE DISTRICT BUDGET WORKSHOP Board of Trustees Walt Glines - President Laura Perry, Esq. – Vice President Mark Dover - Clerk Jonathan Brusco - Trustee Tom Breen, Esq.– Trustee Ken Child - Trustee Lois Locci, ED D. – Trustee Adrian Lopez - Student Trustee Administration Dr. Steven M. Kinsella, C.P.A. — Superintendent/President