1. All College Budget Forum Mission College October 11, 2013

2. Overview  The national and state economic recession and recovery has a long-term impact  Not meeting FTES targets and efficiency targets impacts our revenue generation  Both colleges and the district have balanced budgets through a combination of one-time cuts and contributions from the Land Corporation

3. Overview  Decline in student enrollment results in lowered ongoing revenue  To balance the budget all entities must identify ongoing, permanent reductions  MC=$1.35 Million  District=$630,000  WVC= $1.5 Million  Basic Aid provides glimpse of hope from future revenue growth

4. Background

5. Decline from Peak (-2769)

6. FTES FY 13/14 Target @ 15,898 6 yr. decline of 1846 FTES

7. MC-Total Budget 2009-2013

8. FY 12/13 Budget Recap  Adopted budget was balanced  Prop. 30 passed – no mid-year “trigger” cuts  Missed out on growth funding (177 FTES )  Create EPA account (Prop 30 $ at $100/FTES)  District foregoes $50M in restoration funding  WVC and MC missed their FTES targets by 250 FTES each  On State “stability”, but entered Locally Funded Basic Aid

9. Basic Aid Definition  Basic aid occurs when local property tax revenue exceeds total funding that the State provides as calculated by SB 361 apportionment.  Local property taxes and enrollment fees are primary source of revenues.

10. The Bucket Analogy  2012/13 funding formula, District received $5.4M in state apportionment  Local property tax/student fees exceeded $5.4 in apportionment, entered Basic Aid

11. Revenue Impact of Basic Aid  District’s Core Funding is not affected by issues at the state level  State budget shortfalls  Community College system shortfall  Deferrals

12. Revenue Impact of Basic Aid  District continues to receive funding for:  Student Categorical Funds  EOPS, DSPS, Financial Aid, Student Success  Lottery  Mandated Costs  EPA  Other grants  Funding dependent on # of students/FTES

13. Greater Impact of Basic Aid  Better planning  More stability in revenue  Less impact from the ups and downs of state funding  Potential for incremental growth  Slow growth dependent on Santa Clara County tax revenues

14. Multi-Year Basic Aid Projections

15. Fiscal Stability Planning  2013-2014  One Time Budget Reduction ($578K MC)  Reductions recommended by GAP Spring 2013  Basic Aid Status  Revenues from property taxes  Potential Slow Growth  One time funds  Participatory Task Force to determine use

16. FY 13/14 District Budget Budget development approach  Balance with one-time funds for FY 13/14  Estimated shortfall – $4.5 million  Available revenues  $3.0 million from the Land Corporation  $1.5 million District Services/Colleges  $578,000 from Mission College

17. One Time Reductions 13/14 Item #Position / DescriptionAccount Number Total Reduction 1 Fall 13/14 Salary Savings Reassign Time C Harrison 120-280950/280976-6840-51227-464 $ 42,800 2 Fall 13/14 Fringe/Health Benefits C Harrison 120-280950/280976-6840-53xxx-464 $ 14,150 3 Spring 13/14 Salary Savings Reassign Time C Harrison 120-280950/280976-6840-51227-464 $ 42,800 4 Spring 13/14 Fringe/Health Benefits C Harrison 120-280950/280976-6840-53xxx-464 $ 14,150 5 Fall 13/14 Salary Saving from RT supported by Grants 120-280950/280976-6840-51227-464 $ 7,500 $ 121,400 6 Reduction from Interest Income from various Funds--carryover funding from FY12/13 591-261200-7310-57300-000 $ 64,224 7 Reduction from Graphics / Printing 100-230200-6010-55300-000 $ 10,000 8 Reduction from Community Education Department's Revenue 591-260000-7310-57300-000 $ 10,000 9 Reduction from Research & Planning 100-200500-6600-55160-000 $ 5,000 10 Budget offset from Lottery Supplies to HM 100-232600-1300-54110-000 $ 50,700 11 Reduction from Evening Administration 100-221000-6700-51450-000 $ 4,000 12 Reduction from Health Services Fund Balance 121-255100-7310-57300-000 $ 50,000 13 Reduction from Campus Center Fund Balance 732-200600-7310-57300-000 $ 20,000 14 Reduction from President Office 597-200600-7310-57300-000 $ 5,000 15 Reduction from Admin Services - Duplicating Center 597-220300-7310-57300-000 $ 25,000 16 Reduction from Admin Services - Facility Rental 597-220600-7310-57300-000 $ 10,000 17 Reduction from Hospitality Mangement Revenue 597-232600-7310-57300-000 $ 15,000 18 Reduction from Library Revenue 597-271210-7310-57300-000 $ 9,900 19 Reduction from IIS Revenue 591-260100-7310-57300-000 $ 15,000 20 Reduction from FY13/14 Interest projection 591-261200-7310-57300-000 $ 35,000 21 Reduction from Child Development 330-281230-7310-57300-000 $ 2,000 22 Reduction from Land Corp 120-220900-7310-57300-831 $ 125,776 Target after CBO meeting on July 16, 2013 $ 578,000

18. Fiscal Stability Planning  Ongoing Structural Deficit  Living year-to-year with  One time cuts  Land Corp infusions of dollars  14/15  Ongoing Permanent Budget Reduction  District – approximately $3.5M  MC portion – approximately $1.35M

19. Constraints on Reductions  50% Law  Full Time Obligation Number (FON)  Required to be 311 based on state requirements  Fine from State is significant  Timing is awkward  Likely will be hiring for Fiscal Year 2014-15 to meet this obligation

20. It’s Bigger Than Us  Structural and Economic Changes  End of the wave of Baby Boomer children  Improving Silicon Valley economy  We are not alone in this, but we still have to adjust to this new environment  Our only growth will come from attracting new students with new and refreshed programs and higher retention

21. Structural Deficit  Reliance on Land Corporation and One Time Cuts to balance budget each year  Smaller FTES & Headcount = Loss of Revenue  12-13 Target missed by 250 FTES  83 FTES from Prop 30  Restoration not restored (based on Growth)  Missing Efficiency Targets 550-555.  10 points = $400K

22. FY 14/15 Budget Planning  On-going budget reductions for FY 14/15  Estimated shortfall – $5.0 million  Available revenues for 14/15  $3.5 million budget reduction  $1.5 million from the Land Corporation  On-going budget reductions continue beyond FY 14/15

23. Re Cap--How did we get here?  Past 4 budgets have been balanced with one time funding—Not Sustainable  Combination of one-time cuts and Land Corp Stability Funding  Enrollment decrease=revenue decrease  12/13 FTES target—MC short by 250 ($1.2M)  Prop 30 District short by177 FTES-MC =83 ($400K)  Serving almost 3000 less students  Non Peak Efficiency  Target short by 20 points ($800K)

24. Next Steps  Colleges Develop Budget Reduction Plans for FY 2014/15 and beyond  District develops Board policy for Basic Aid Funds Allocation  Based Participatory Governance  District Council Task Force recommendations

25. Looking to the Future  Financial stability in short term  Reductions address structural factors  Greater stability due to Basic Aid  Never a guarantee, but should not face cuts in the immediate future  Potential for growth  Basic Aid provides opportunity for growth in revenue in future years

26. Questions and Discussion

28. Reference Slides for Q&A Follow This Slide

29. Basic Aid Districts  Marin  Mira Costa  San Mateo  South Orange County  San Jose-Evergreen  West Valley-Mission

30. FY 13/14 State Budget for Community Colleges ItemJanuary ProposalMay ReviseFinal Budget Apportionment$196.9M$87.5M COLA $89.4M Growth $87.5M COLA $89.4M Growth Student Success$50M On-line Education$16.9M Adult Education$315.7M$30M for 2 years $500M for FY 15/16 $25M for 2 years $500M for FY 15/16 Deferral buy- down $179M$179.9M for FY 12/13 $64.5M for FY 13/14 $179.9M for FY 12/13 $30M for FY 13/14 90-unit capProposedWithdrawnDeleted

31. 2011/122012/132013/142014/15 (projected) Shortfall$2.9M$6.0M$4.5M$5.0M Revenues -On-going budget reduction$3.0M$3.5M -One-time budget reduction$2.9M$1.5M -Bargaining concessions$1.5M -Land Corp stability funding$1.5M -Land Corp additional funding$1.5M TOTAL REVENUES$2.9M$6.0M$4.5M$5.0M Additional -Possible mid-year trigger cuts (covered by Land Corp) $1.56M$5.3M -Workload reduction$4.8M (6.2%) -Workload restoration$0.75M (waived) $1.7M (waived) -Health Benefit Cap-- -RDA dissolution--

32. Full-time Faculty Obligation Fall 2010Fall 2011 Fall 2012 Fall 2013 Fall 2014 FON Obligation323.1 315.1 311 Actual (or projected)306305309306 Reported (or projected) 312310 311 FT Faculty #68.02%68.23%68.43%