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

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all college budget forum

All CollegeBudget Forum

Mission College

October 11, 2013

overview
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
overview1
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
fy 12 13 budget r ecap
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
basic aid
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.
the bucket analogy
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
revenue impact of basic aid
Revenue Impact of Basic Aid
  • District’s Core Funding is notaffected by issues at the state level
    • State budget shortfalls
    • Community College system shortfall
    • Deferrals
revenue impact of basic aid1
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
greater impact of basic aid
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
fiscal stability planning
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
fy 13 14 district budget
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
fiscal stability planning1
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
constraints on reductions
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
it s bigger than us
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
structural deficit
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
fy 14 15 budget planning
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
re cap how did we get here
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)
next steps
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
looking to the future
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
basic aid districts
Basic Aid Districts
  • Marin
  • Mira Costa
  • San Mateo
  • South Orange County
  • San Jose-Evergreen
  • West Valley-Mission
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