2014-15 Final Budget September 9, 2014

Agenda State Budget Highlights Peralta’s 2014-15 Final Budget Funding Sources Unrestricted General Fund Parcel Tax Fund 2014-15 Budget Allocation Model Summary

2014-15 State Budget 4th Consecutive Year the budget passed on time Includes a reserve of $1.4 billion Based on the Governor’s conservative forecast Progress made toward paying down deferrals Down to $94 million from $592 million before passage of Prop 30 Governor has clearly laid out his path Protect against boom and bust cycles Retire Debt Focus new money on education Includes a Rainy Day Fund

2014-15 State Budget Wall of Debt Rain Day Fund on November Ballot Budget eliminates $10 Billion in debt Mid year positive trigger would further reduce deferrals to schools and colleges Rain Day Fund on November Ballot When capital gains exceed 8% of GF revenues, a deposit to the RDF is required Half used to pay off debt and liabilities for the first 15 years Allows for withdrawal for disasters or if spending is at or below highest level of spending of the prior 3 years CalSTRS – 30 Year obligation of $74.4 billion State GF contribution increase from 3% to 6.3% in 2016-17 Employee rate increase from 8% to 10.25% as of 2016-17 Employer rate increase from 8.25% to 19.1% as of 2021

2014-15 State Budget The Budget Bill contained the following community college provisions: Access funds (growth) of $140.4 million (2.75%) Cost of Living Adjustment (COLA) of $47.3 million (.85%) $100 million for Student Success and Support (SSSP) Match of 2:1 on entire amount $30 million increase for DSPS $70 million increase for Student Equity Plans $50 million one time increase for the Economic and Workforce Development program $49.5 million to pay down mandates $148 million for deferred maintenance and instructional equipment. Flexible locally and specified as one-time.

COMMUNITY COLLEGE what’s new Technical Assistance for Chancellors Office $1.1 million and 9 positions for goal setting and monitoring of institutional effectiveness $2.5 million for technical assistance to support implementation of effective practices at college State funding for Career Development and College Program (CDCP) Rate per FTES to be increased to be equal to Credit Rate as of 2015-16 Positive Trigger – Department of Finance can pay down deferrals during the year if Proposition 98 guarantee is higher than estimated New formula for Growth allocation is effective in 15-16 Proposal to be out late summer/early fall

Cautions and concerns Proposition 30 is temporary Sales tax increase terminates at the end of 2016 (Approximately 21% of Prop 30 revenues) Income tax increase terminates at end of 2018 STRS obligation Deficits Continued exposure to shortfalls in property taxes and fees

Our district - PCCD Access funds (growth) $2.2 million (increase in funded FTES of 430) Cost of Living Adjustment (COLA) $846,989 (.085%) Categorical increases – awaiting on allocations from the State Chancellors Office $2,366,996 for scheduled maintenance/instructional equipment Flexible locally and specified as one-time No match except if the funds are used for Architectural Barrier Removal State Retirement increases to employer rates: STRS .63% increase ; $198,600 PERS .329% increase ; $73,563 Increase in Medical Premiums $979,893 Kaiser 0%; Traditional PPO 26% Lite PPO 24.9% Traditional PPO (Local 39) 22.1% Lite PPO (Local 39) 17.5% Increase in Workers Compensation rate of .1% estimated cost of $54,500 Increase in OPEB Debt service payment of $1,642,666

Additional assumptions used to develop the budget FTES – Target of 19,355 Residence FTES with funded FTES from the state of 19,055 Productivity level of 17.5 Unrestricted Lottery dollars funded at $124.25 per funded FTES State Apportionment deficit factor of 2% Parcel Tax revenue estimated to be $8,053,385

2013-14 Unrestricted General Fund final budget Summary Revenue 2014-15 Final Budget 2013-14 Estimated Actuals 2012-13 Actuals   Federal Revenue $ - $ - $ - State Revenue $ 67,396,913 $ 65,270,981 $ 64,346,744 Local Revenue $ 46,682,083 $ 45,137,518 $ 47,174,459 Transfer In Revenue $ 13,128,094 $ 11,691,939 $ 9,152,116 Revenue Total $ 127,207,090 $ 122,100,438 $ 120,673,319 Expenses Full Time Academic $ 21,353,690 $ 18,252,185 $ 16,233,586 Academic Admin $ 4,864,416 $ 4,214,079 $ 3,466,038 Other Faculty $ 5,679,831 $ 5,388,306 $ 4,002,127 Part Time Academic $ 8,226,114 $ 12,310,320 $ 13,723,964 Classified Salary $ 24,469,094 $ 21,974,337 $ 20,070,280 Fringe Benefits $ 38,598,080 $ 36,409,122 $ 37,216,997 Books, Supplies, Services $ 15,954,977 $ 14,561,377 $ 12,576,388 Equipment Capital Outlay $ 175,836 $ 327,151 $ 148,456 Debt Service / Transfers $ 7,885,052 $ 7,053,604 $ 9,613,258 Expense Total $ 120,490,481 $ 117,051,094 Revenue over Expenditures $ 1,609,957 $ 3,622,225 Beginning Fund Balance $ 14,209,208 $ 12,599,251 $ 10,017,896 Audit Adjustments $ - $ -1,040,870 Ending Fund Balance $ 14,209,208 $ 12,599,251

General Fund Revenue Sources

Computational revenue sources

2013-14 General Fund expenditures

Measure B – Parcel Tax Revenue 2014-15 Final Budget 2013-14 Estimated Actuals 2012-13 Actuals   Local Revenue $ 8,055,785 $ 8,056,883 $ 7,683,197 Revenue Total $ 7,683,197 Expenses Full Time Academic $ - $ - $ - Academic Admin Other Faculty Part Time Academic $ 6,500,000 $ 5,586,364 $ 3,222,024 Classified Salary $ 369,702 $ 747,079 $ 247,511 Fringe Benefits $ 624,511 $ 738,164 $ 610,737 Books, Supplies, Services $ $ 369,470 $ 1,372,129 Equipment Capital Outlay $ 135,600 $ 55,156 Expense Total $ 7,494,213 $ 7,576,677 $ 5,507,567 Beginning Fund Balance $ 2,655,836 $ 2,175,630 Revenue over Expenditures $ 561,572 $ 480,206 $ 2,175,630 Ending Fund Balance $ 3,217,408 $ 2,655,836

Implementation of the budget allocation model In August of 2010, the Planning and Budgeting Council began working on the creation of and recommendation to the Chancellor a Budget Allocation Model (BAM) Purpose to: Move from the existing model to a model that would better serve the Colleges and District Fully respond to previous Accreditation recommendations Core Principles: Provide financial stability Consistent with the State’s SB361 funding model Simple and easy to understand Provide for a reserve in accordance with Peralta’s Board Policy Maintain autonomous decision making at the college level Responsive to the District’s and Colleges’ planning processes

Budget Allocation Model 2014-15 Budget Allocation Model Worksheet Base Allocation: Total Revenue Allocation $ 128,791,119 Total Exclusions (18,754,797) Applicable Revenue $ 110,036,322 Alameda Berkeley Laney Merritt Three Year FTE Rolling Averages 3,534.73 3,683.22 7,524.21 3,784.08 Percentage 19.36% 19.54% 40.66% 20.44% Revenue Allocation by College $ 20,994,479 $ 21,876,414 $ 44,689,920 $ 22,475,510 Out of State and International Allocation 679,856 1,538,321 1,847,239 524,754 DO Service Center Budgets (4,050,934) (4,221,105) (8,623,024) (4,336,702) Centralized Services Budgets (1,181,076) (1,230,690) (2,514,098) (1,264,393) Net Revenue Allocation by College $ 16,442,326 $ 17,962,939 $ 35,400,036 $ 17,399,168 Unrestricted Expenditure Budgets $ 15,523,535 $ 15,684,256 $ 30,961,345 $ 17,475,512 Parcel Tax expenditure budgets $ 1,448,823 $ 1,464,996 $ 2,777,320 $ 1,442,750 Total Expenditures $ 16,972,358 $ 17,149,252 $ 33,738,665 $ 18,918,262 Expenditures (over)/under Net Revenue Allocations by College (530,032) 813,687 1,661,371 (1,519,094)

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