College of the Sequoias Final Budget September 14, 2015

Budget Process 1.Tentative Budget is created based on May Revise 2.Approval of Tentative Budget by Board in June authorizes expenditures over summer 4.Summer - Legislature proposes adjustments to state allocations, and Governor negotiates 5.State Budget is adopted by June 15th (legislature); Governor approves by June 30th 6.Staff account for final changes to income & expenditures 7.Final Budget is adopted by Board in September

Final Budget - Assumptions: 5.72% Access Funding (Growth) $2.4M available –Budget only includes 140 FTES, or 1.5% growth, due to third session summer 2015 (120 FTES) and small growth (20 FTES) = appx $650, % COLA = $474,000 COS (per-FTES, and base) $2.2M increased “base allocation” ongoing, but first/only 3.1% H&W cap increase (50% of PPO-4 RX-A increase) for COSTA $76,752, CSEA $71,340, & Mgt/Conf $23,616.

Final Budget - Assumptions: Student Success/SSSP- additional $750K ongoing Student Equity/SEP – additional $850K ongoing Scheduled Maintenance –May Revise = $577K allocation (zero match required) Instructional Equipment –May Revise = $577K allocation –COS budgets $277K per year for annual computer refresh - $150K extra refresh/$150K for other allocations –Full Time Temp placeholders – 3 FTT filled, 1 open

Final Budget - Assumptions: Increased STRS by $370K (GF Unrestricted) – employer contribution rate increased from 8.88% (14-15) to 10.73% (15-16) Increased PERS by $98K - Employer contribution rate increased from % (GF budget) to 11.84% Now includes $491,169 revenue for increased full-time faculty hiring State is allocating based on FTES. COS will need to use this to hire additional faculty in fall 2016 to meet FON. Does not include $4.9 million in one-time mandate cost reimbursements – will budget when received in December

Final Budget - Assumptions: CSEA settlement 170.6K for Unrestricted General Fund: One-year-only stipends for 50% medical premium increase One-year-only 6% PERS contribution (50 ee’s only hired after 1/1/13) Small ongoing increase in dental/vision coverage Management/Confidential small ongoing increase in dental/vision $2500 GFU Switched carriers for P&L insurance, netting the District $160K annually in savings (but not in final budget yet!)

Final Budget – Major Changes in Budget Assumptions: General Fund Unrestricted Surplus/Deficit Estimated at January Governor’s Budget 1.58% COLA 235,727 Surplus/Deficit at District Budget Forums (after COSTA settlement) (72,273) + $975K Increase in Base Allocation & other small misc. incr1,043,923 Surplus/Deficit at May Revise and Tentative Budget adoption 1.02% COLA $971,650 + $136K addt’l Base Allocation + $491K new FON allocation, - 2 additional FTT positions budgeted - CSEA settlement $387,222 Surplus/Deficit at Final Budget Adoption$1,358,872

Description GFU Combined State Allocation$50,187,193 Federal Revenues$ 7,000$2,330,906 Other Income$ 2,367,909$12,595,294 Total Revenues$52,562,102$65,113,393 Certificated$22,180,384$23,606,263 Classified$ 9,534,973$13,177,575 Benefits$11,751,075$13,814,251 Materials & Supplies$ 957,834$ 2,415,137 Contracted Services$ 5,592,513$ 7,127,672 Capital Expenditures$ 929,964$ 2,505,582 Transfer Out/Other Outgo$ 256,487$ 1,108,041 Total Expenditures$51,203,230$63,754,521 Surplus/(Deficit)$ 1,358,872

Description Beginning Fund Balance$7,115, % (13.1% after designated carryover) Surplus/(Deficit)$1,358,872 (Does not include mandate reimb funds) Ending Fund Balance$8,473, % 6% Reserve for Economic Uncertainties$3,072,194Board Policy 6% Additional Fund Balance$5,401,724 = Projected 6/30/16 Gen Fund Balance$8,473,918Board Priority 10% (~16.5%) Note 1: Additional funds expected to fall to fund balance at close of each year Note 2: 1 month of GF expenditures$4,300, % state average-CC Fund Balance$8,700,00017%

Annual Ongoing Increases GFU GFU Step & Column$345,000$360,000 H&W Benefits$0 PERS (11.847%, %, 16.6%) $150,000$448,000 STRS (10.73%, 12.58%, 14.43%) $416,000$419,000 Utilities 3% Increase$50,000 Solar Savings ($119K FY16 + $131K FY17) ($131,000) CSEA 1-year stipends eliminated(164,000) P&L Insurance change savings(160,000) Insurance (WC/P&L) 4% Increase$40,000 Add FTF –Estimated FON$400,000$200,000 Total Increased Expenditures$946,000$1,517,000 FTES Growth <1.75% 100 FTES $ 472,400 1% COLA$ 501,872$ 511,615 FISCAL SOLVENCY PROJECTIONS

Fiscal Solvency Projection GFU GFU GFU State Allocation$50,187,193 Federal Revenues$ 7,000 Other Income$ 2,367,909 Total Revenues$52,562,102 Certificated$22,180,384$22,744,486$23,117,286 Classified$ 9,534,973$ 9,500,587$ 9,637,387 Benefits$11,751,075$12,368,359$13,285,759 Materials & Supplies$ 957,834 Contracted Services$ 5,592,513$ 5,391,513$ 5,481,513 Capital Expenditures$ 929,964 Transfer Out/Other Outgo$ 256,487 Total Expenditures$51,203,230$52,149,230$53,666,230 Surplus/(Deficit)$ 1,358,872$ 412,872$ (1,104,128) Assumed 0% COLA and no growth & 17-18

Fiscal Solvency Projection GFU GFU GFU State Allocation$50,187,193$51,161,465$52,145,480 Federal Revenues$ 7,000 Other Income$ 2,367,909 Total Revenues$52,562,102$53,536,374$54,520,389 Certificated$22,180,384$22,744,486$23,117,286 Classified$ 9,534,973$ 9,500,587$ 9,637,387 Benefits$11,751,075$12,368,359$13,285,759 Materials & Supplies$ 957,834 Contracted Services$ 5,592,513$ 5,391,513$ 5,481,513 Capital Expenditures$ 929,964 Transfer Out/Other Outgo$ 256,487 Total Expenditures$51,203,230$52,149,230$53,666,230 Surplus/(Deficit)$ 1,358,872$ 1,387,144$ 854,159 Assumed 1% COLA and 100 FTES growth & 17-18

Items to watch for future years: Note: COS may earn more Access Funding; projecting +180 FTES : Loss of Prop 30 (EPA).25% sales tax - 12/31/16 expiration = appx $1.2M to $1.5M for COS annually Increased PERS & STRS costs of $566,000 annually : Increased PERS & STRS costs of $867,000 annually : Increased PERS & STRS costs of $625,500 annually Loss of Prop 30 (EPA) increased high-earner income tax 12/31/18 expiration = appx $5M for COS annually COS may wish to set aside ongoing funds to cover PERS/STRS in future years.

FTES Update Historical Perspective 14 YearActual FTESFunded FTES , , , , , , , , , , , , , , , , , , , , , , , , , ,870Fdd/8,986cap ,010.00? ? Funded/9431 cap

Major Categorical Program Revenues Revenues Basic Skills$116,692 BFAP Financial Aid$417,634$437,634 EOP&S$859,235$1,165,763 CARE$127,487$213,239 DRC$1,200,564$1,212,810 CalWorks$362,388$366,084 Student Success$1,262,102$2,012,102 Student Equity$692,650$1,542,650 Adjunct Parity$172,899$234,336 TANF$ 84,311$80,095 Scheduled Maintenance$911,872$577,364 Instructional Equipment$276,873$577,364 Total$6,484,707$8,536,133

Mandate Reimbursement Funds for COS: The large “one-time” reimbursement (not the annual block grant) is currently estimated at $4.931M for COS in The District never budgets mandate reimbursement funds until they are actually received – should be received in December 2015 Further discussion and research will be presented to the board, including detailed information of possible funding needs. When received, options for possible board direction follow. Board direction will be sought in January 2016 Pay toward General Fund 2004 COP $3M balance (student center trust, health center, and District)

Questions or Comments? For Board Approval