Board of Trustees Meeting September 14, 2015 2015-2016 Adopted Budget Board of Trustees Meeting September 14, 2015 The mission of the Rancho Santiago Community College District is to provide quality educational programs and services that address the needs of our diverse students and communities

Outline of Presentation District Budget Assumptions Update RSCCD 2015-2016 Proposed Adopted Budget What’s Next? Recommendation

District Budget Assumptions Update

Budget Assumptions 2015-2016 is the best California Community Colleges budget in the history of the system. Proposition 98 minimum funding guarantee formula has provided huge increases to K-14 education Some funds are ongoing Some funds are one-time Prop 98 prior year settle up funds

Budget Assumptions Budget Assumptions begin on page 107 of Adopted Budget document Includes latest information from enacted State Budget Includes June 30, 2015 fiscal year end closing balances Actual revenues Actual expenditures

FTES Analysis and Targets (p. 106) District Update - FTES FTES Analysis and Targets (p. 106) Growth = the most important driver of new unrestricted funding for our budget

Budget Assumptions Recap – page 109

2014/2015 Deficit Spending Reconciliation 2014/15 Adopted Budget was expected to deficit spend by approximately $5 million Mid fiscal year increased expenditure estimates increased deficit spending estimates to $8 million Due primarily to increased prior year Prop 98 settle up revenues attributable to the 2013/14 and 2014/15 fiscal year and other adjustments, actual deficit spend down of Budget Stabilization Fund was $1.4 million in 2014/15 Budget Stabilization Fund balance projected in 2014/15 Adopted Budget was $10.8 million Actual Budget Stabilization Fund balance, as of July 1, 2015 is $13.7 million

Budget Stabilization Fund Major Changes to Budget Stabilization Fund 2014/15 2014/15 Budgeted Ending Budget Stabilization Fund $10,800,000 + Reduction in Deficit Factor $ 1,950,000 + Additional PY Apportionment Settleup $ 3,100,000 + Additional Local Revenue $ 1,400,000 - Deferral of RDA Revenue $ (1,170,000) - Increase in Board Policy Contingency $ (1,500,000) - Transfer to Cap Outlay for OEC/SCC-ADA $ (1,500,000) + Net Change in Other $ 610,000 2015/16 Beginning Budget Stabilization Fund $13,690,000

RSCCD 2015-2016 Proposed Adopted Budget

Proposed Adopted Budget Includes Board approved Budget Assumptions for the Adopted Budget Approved at August 17th Board meeting Both FRC and District Council recommended the Proposed Adopted Budget Fourth fiscal year using the District’s SB 361 Budget Allocation Model (BAM) Revenue allocation model Adopted Budget document includes Multi-Year Projections (p. 110-113), Budget Allocation Model (p. 114-129) and STRS and PERS expected cost increases (p. 136)

Proposed Adopted Budget Includes Prop 30 Education Protection Account (EPA) budget (p. 138) EPA funding are temporary revenues 1/4% sales tax increment expires December 2016 Personal income tax increment expires December 2018 EPA is not additional revenue, but rather a component of state apportionment Must be accounted for separately and not be spent on administrative costs RSCCD = $23,946,110 in 2015/16 to be spent 100% on instructional salaries Page 138 of Adopted Budget document includes required annual Prop 30 EPA Expenditure Plan certification on how funds will be spent

Recap of Revenues and Expenditures General Fund (Combined 11, 12 & 13)

Proposed Adopted Budget

Proposed Adopted Budget

Proposed Adopted Budget Reserves and Carryovers Board Policy Contingency Reserve of 5% $8,944,553 Increase of approximately $1.5 million due to increased budgeted expenditures Other Designated Reserves Restricted Program Reserves & Revolving Cash - $1,333,343 COLA $1,468,618 & Restoration/Access/Growth -0- Budget Center Carryover Funds - $2,732,089 Santa Ana College - $2,457,949 Santiago Canyon College - -0- District Services - $274,140 Beginning balance of the Budget Stabilization Fund - $13,690,485 Projected ending balance – same, no projected spend down in 2015/16 Balanced budget as appropriated in Adopted Budget

List of all District Funds Budgeted

What’s Next?

What’s Next? District’s ability to earn any Growth funding? System-wide structural deficit unresolved Closely monitor expenditures Prop 30 tax revenue is temporary and will start to expire in December 2016 Decreasing Budget Stabilization Fund balance Due to new ongoing costs projected to increase at a greater pace than new unrestricted revenues Multi-Year Projections: Budget Forecasting is the art of saying what will happen, and then explaining why it didn’t! MYP’s are based on what we know now

Multi-year Projections Multi-Year budget projections (pages 110 - 113) Best, worst and baseline modeling Potential large out-year issues STRS, PERS, H/W premium increases, step/column movements, utilities, etc. Yearly cost increases outpacing revenue increases Expiration of Prop 30 EPA funds starting in 2016/17 Only unrestricted revenues available to offset expenditure increases are COLA and Growth funds, absent any additional unrestricted base allocations Regardless of which assumption model chosen, Budget Stabilization Fund is estimated to be exhausted by the 2017/18 budget year

Multi-year Projections

Multi-year Projections

Recommendation

Adopted Budget Recommendation Recommend approval of the proposed 2015-2016 Adopted Budget, as presented