1. Comparing the AFT and District budget scenarios
Douglas Orr, Ph.D., Economics

2. The District claims that the AFT salary proposal will bankrupt the district. That is definitely not the case. This presentation will show why that is true. One of the most frustrating aspects of the current bargaining process has been the constantly changing budget numbers presented by the District. This presentation walks through those numbers and demonstrates that the District does, in fact, have the revenues necessary to pay for the AFT salary proposal. On December 7, 2015, the District presented the following table. It reflects class schedule “alignment,” which means reducing the number of class sections offered by 26% and downsizing the number of FTEF faculty to correspond to the “new equilibrium” of smaller enrollments.

4. This table appeared to show that the fund balance would go to zero by the 2018/19 academic year. Our first response, was that both the starting and ending fund balances in 2015/16 were incorrect. The starting fund balance ignored carry over funds from the previous year and the ending fund balance ignored a expenditure line item that added to the fund balance.

5. .

6. This District recognized the error and presented the following table on January 26, The starting fund balance was now correct, but they continued to ignore the line item that added to the balance. But the biggest change in this table is that the numbers for revenues and expenses for the current year are totally different. It is difficult to negotiate over budget numbers that keep changing.

8. We again pointed out they neglected to include the line item amount for reserves, $7.7M, in the 2015/16 adopted budget. The District has continued to ignore this amount. In the following analysis, we will also ignore it We have noted that “alignment” has already begun, so we turn to the effects of “alignment” on various budget scenarios. It should be noted that “alignment” is a code word for laying-off faculty, to align the number of faculty to the “new equilibrium” of smaller enrollments.

10. One the first day of fact-finding, the District presented and discussed budget scenarios as Exhibits 28 and 29. The date for both revenues and expenditures for 2015/16 are different, yet again, from the numbers they have been presenting during negotiations. In the following, we will focus only on Exhibit 29, which the District claims reflects the results of implementing the AFT salary proposal. The first table reflects a scenario of flat enrollments for the next six years. The table presented by the District does not include any information about the number of FTEF. That information has been added.

12. As part of Exhibits 29, the District provides a scenario that projects enrollment growth of 2,500 FTES. According to the District’s Enrollment Management Plan, this increase can be achieved very easily. In this scenario, both revenues and expenditures are very different than in the flat enrolment scenario.

14. It is easy to get lost in the weeds of tables of numbers
It is easy to get lost in the weeds of tables of numbers. The following table trying to generate some clarity. This table compares just the revenue and expenditure numbers for the two scenarios. Doing this raises some very puzzling questions.

15. It is easy to get lost in the weeds of tables of numbers
It is easy to get lost in the weeds of tables of numbers. The following table trying to generate some clarity. This table compares just the revenue and expenditure numbers for the two scenarios. Doing this raises some very puzzling questions. The stated goal of the district is to increase “productivity.” With that number currently at 11.1, it is unclear why there would be any increase in the number of FTEF in order to handle just 2,500 more FTES. In fact, if “productivity” rose to just 12.3, no additional faculty would be needed. Yet, the growth scenario seems to indicate a significant increase in academic salaries. (Remember, salary increases have already been factored into both scenarios.)

17. The following table adjusts the previous one, assuming no increase in the number of FTEF, and therefore, not additional increase in academic salaries to cover the increase in enrollment.

19. The previous table illustrates the point the AFT has been making throughout the negotiating process. The solution to all of the District’s problems lies in increasing enrollments, and not by trying to increase “productivity” by cutting class sections. The Enrollment Management Plan lays out a clear path to increasing enrollments by as much as 7,500 over the next five years. The following table demonstrates the impacts of increasing enrollments by just 5,000. It is true that fund balances would decrease in the next two years, but they would then increase in the following years. At no point does the fund balance fall below 16%. This is the true purpose of reserves: use them to invest in the future of the college, not prepare for its ultimate collapse.