1. Budget Update Town Hall Meeting Diana Keelen November 27, 2012 “While the California budget is uncertain, there is one thing that is certain, it will change.”

2. PROPOSITION 30 PASSED!!! – But we’re not out of the woods, yet…

3. Now What? Not a permanent solution. Only prevents extreme cuts, not a bunch of new revenue. Expires in 2016- 2017 Not a permanent solution. Only prevents extreme cuts, not a bunch of new revenue. Expires in 2016- 2017 Prevents $338 million (7.3%) workload reduction Prevents $338 million (7.3%) workload reduction Plan to buy down $159M of $961M deferral. AVC’s deferral goes from $14 mil to $11.7 mil first year Plan to buy down $159M of $961M deferral. AVC’s deferral goes from $14 mil to $11.7 mil first year $50 million in growth or $426K for AVC. $50 million in growth or $426K for AVC. Details of Education Protection Account (EPA) still being worked out. Details of Education Protection Account (EPA) still being worked out. Prop 98 is still subject to manipulation by the legislature Prop 98 is still subject to manipulation by the legislature

4. Education Protection Account Revenues earned for Prop 30 will go into a reserve account that cannot be touched by the legistlature Revenues earned for Prop 30 will go into a reserve account that cannot be touched by the legistlature 11% goes to CCCs and 89% goes to K-12 11% goes to CCCs and 89% goes to K-12 Cannot be used for “administrative salaries” or “audits” Cannot be used for “administrative salaries” or “audits” Definitions being worked out. Restricted or unrestricted??? Definitions being worked out. Restricted or unrestricted??? P1 not yet issued…a lot of unknowns P1 not yet issued…a lot of unknowns

5. Reminder of What Happened in 2011-2012 Reductions That Have Been Implemented Fiscal Year Workoad % ApportionmentBaseFTES New Base Head Count Initial Workload Reduction 2011- 2012 -6.21%($3,223,949)11,371(706)10,665(1,484) Additional Deficit due to $23 mil in base funding increase from 2009-2010 and 2010-2011 with no state funding increase (2 new colleges, several new centers and natural increases to basic allocation) ($129,285) Tier 1 Deficit Co-Efficent ($309,085) Tier 2 Additional Workload Reduction -1.52%($741,526) (162)10,502(341) Student Fee Deficit Co-Efficient/P-Tax Shortfall ($1,389,460) 2011-2012 Total Reductions -7.74%($5,793,305) (869) (1,825) AVC Deferrals 2007-2008$2,769,936 2008-2009$7,560,021 2009-2010$9,856,368 2010-2011$11,892,686 2011-2012$14,165,447

6. 2012-2013 Adopted Budget vs. Prop 30 Passing As of 11-14-12 PRELIMINARY-FOR PLANNING PURPOSES ONLY 2012-2013 Adopted Budget 2012-2013 Prop 30 Passed 2012-2013 Prop 30 Passing Difference from Adopted Budget BEGINNING FUND BALANCE 7,502,546 REVENUE 8100-8200Federal21,883 0 8600-8700State43,138,16947,219,8614,081,692 8800Local8,763,4838,789,05125,568 Total Revenue51,923,53556,030,7954,107,260 REVENUE PLUS BEGINNING FUND BALANCE 59,426,08163,533,341 EXPENDITURES 1100-1400Academic Salaries24,421,85125,572,8211,150,970 2100-2400Classified Salaries10,790,31510,743,736(46,579) 3100-3800Employee Benefits11,101,56311,077,516(24,047) 4100-4700Supplies832,9271,032,927200,000 5100-5800Other Operating Costs5,492,3725,612,372120,000 6100-6700Capital Expenditures264,593 0 Total Expenditures52,903,62154,303,9651,400,344 7100-7600Other Outgo2,117,0581,944,058 Total Expenditures & Other Outgo55,020,67956,248,023 Ending Fund Balance4,405,4027,285,318 Surplus/(Deficit)(3,097,144)(217,228) Reserve % 8.01%12.95% Funded FTES Assumptions ( Includes growth) 9,73210,593861 Targeted FTES Assumptions 1% above funded 9,82910,699870

7. 2012-2013 Difference Between Expenditures Adopted Budget and Prop 30 Passage ChangeIncreaseDecreaseTotal Workload Reduction Added Back in of 7.33%-767 FTES $ 1,025,313 94 FTES Growth $ 125,658 Reduced Outreach Services $70,627 TRAN Borrowing Increase$120,000 Classroom Materials Increase$100,000 Facilities Materials Increase$100,000 Total Increase (Decrease)$1,470,970$70,627$1,400,343

8. Assumptions to Out-Year Projections Assumptions: Property Tax shortfall in 2012-2013 - Roughly $780K Flat revenue in 2013-2014 through 2015-2016 Risk: No increase to benefits in the outyears above what is tied to step & column increases Eliminated outreach program specialist starting in mid 2012-2013 Other Post Employment Benefits (OPEB) trust not established until 2013-2014 2015-2016 projected deficit mainly due to Election costs that year 20% reduction in Security Contract starting in 2013-2014 Increase in 2012-2013 interest expense by $120K Reduced interest expense starting in 2013-2014 due to deferral buydown $100K increase in instructional supplies starting in 2012-2013 $100K increase in facilities supplies starting in 2012-2013

9. 2012-2013 Estimates and 3 Year Projection As of 11-14-12 PRELIMINARY-FOR PLANNING PURPOSES ONLY 2012-2013 Prop 30 Passed 2013-2014 Projected Budget 2014-2015 Projected Budget 2015-2016 Projected Budget BEGINNING FUND BALANCE 7,502,5467,285,3187,304,6387,449,651 REVENUE 8100-8200Federal21,88320,930 8600-8700State47,219,86147,987,753 8800Local8,789,0518,890,397 8,957,805 Total Revenue56,030,79556,899,080 56,966,488 REVENUE PLUS BEGINNING FUND BALANCE 63,533,34164,184,39864,203,71864,416,139 EXPENDITURES 1100-1400Academic Salaries25,572,82125,731,19825,891,15926,052,719 2100-2400Classified Salaries10,743,73610,841,56510,940,37111,040,166 3100-3800Employee Benefits11,077,51611,133,64311,190,33111,247,586 4100-4700Supplies1,032,927 5100-5800Other Operating Costs5,612,3725,784,2645,276,2255,761,064 6100-6700Capital Expenditures264,593284,593286,927289,330 Total Expenditures54,303,96554,808,18954,617,94055,423,793 7100-7600Other Outgo1,944,0582,071,5712,136,1272,200,802 Total Expenditures & Other Outgo56,248,02356,879,76056,754,06757,624,595 Ending Fund Balance7,285,3187,304,6387,449,6516,791,544 Surplus/(Deficit)(217,228)19,320145,013(658,107) Reserve % 12.95%12.84%13.13%11.79% Funded FTES Assumptions ( Includes growth)10,593 Targeted FTES Assumptions 1% above funded10,699

10. Questions?