State Center Community College District Empowering through Educational Excellence May 5, 2020 Budget Update 2018-19 Budget Update • Anticipated additional funding of $1.2 M for last year’s funding • Actually funded for $3.6 M Empowering through Educational Excellence 2 Review of the March 311Q Revenu e   86 State Revenue 88 Local Revenue Other Financial Sources 89 Total Revenue Expens es   91 92 93 Budget Actual $ $ 154,490,746 119,977,656 $ $ 65,467,043 42,390,345 $ $ 15,000 $ $ 219,972,789 162,368,001 Budget Actual $ Academic Salaries $ 87,245,113 67,736,444 $ Classified Salaries $ 39,872,164 29,331,847 $ Benefits $ 51,276,722 32,638,234 Empowering through Educational Excellence $  PCT Received 78% 65% 0% 74% PCT Used  78% 74% 64% 3 2019-20 Formula Update (SCFF) • Community College Chancellor’s Office will set rates based off of the First Apportionment (P1) • Originally was going to be set on Second Apportionment (P2) Empowering through Educational Excellence 4 2020-21 Budget Update Department of Finance, Plan for 3 Scenarios For Tentative 1. Work Load Budget with COLA 2. Work Load Budget without COLA 3. Work Load Budget with cuts up to 15% Empowering through Educational Excellence 5 2020-21 Budget Update Expect at best a “Work Load Budget”: A Budget with no new revenues: • May include COLA, but unlikely • Programs originally proposed will be eliminated Empowering through Educational Excellence 6 2020-21 Tentative Budget SCCCD Work Load Budget with No COLA Major Budget Adjustments Amount s Step and Column + $ 2.1 M Retirement Savings - $ 1.2 M STRS/PERS Increases + $ 2.2 M SCFT Salary Increases + $ 866 K Positions added or on hold - $ 672 K Bus Pass + $193 K Empowering through Educational Excellence 7 2020-21 Tentative Budget STATE CENTER COMMUNITY COLLEGE DISTRICT UNRESTRICTED GENERAL FUND ALLOCATION 2020-21 TENTATIVE BUDGET Clovis District Office 2019-20 Base Allocation Salary Adjustments Fixed Cost Adjustments Positions Districtwide Initiatives 2020-21 Unrestricted Base Allocation $ One-Time Revenue Allocation Reserve Expenditures Lottery Allocation Total 2020-21 Unrestricted Allocation $ $ $ Fresno City College 45,296,076 555,277 (391,582) 45,459,771 $ 6,797,056 3,000,000 55,256,827 $ $ $ Reedley College 91,848,166 1,683,307 (153,000) (902,700) 92,475,773 $ 69,793 465,595 93,011,161 $ $ $ Community College 32,543,686 616,627 199,389 33,359,702 $ 21,576 197,540 33,578,818 $ $ $ Madera Comm College & Oakhurst Centers 24,237,623 737,474 (14,600) 402,160 25,362,657 $ 20,664 193,422 25,576,743 $ Empowering through Educational Excellence $ $ TOTAL DISTRICT 13,425,475 389,443 (600) 20,827 13,835,145 $ 207,351,026 3,982,128 (168,200) (671,906) $ 210,493,048 9,598 143,443 13,988,186 $ 6,918,687 4,000,000 $ 221,411,735 8 2020-21 Budget Update New Timeline for Budget May Mid-month—May Revise June 2—SCCCD Tentative Budget June 30—Governor signs “balanced budget” July 15—Tax revenues due August—Legislators/Governor take additional action September 1—SCCCD “Final Budget”—based on June Empowering through Educational Excellence 9 Rainy Day Fund—Public Policy Institute of California https://www.ppic.org/blog/the-coronavirus-pandemic-will-test-the-states-budget-reserves/ Empowering through Educational Excellence 10 2020-21 Budget Update https://www.cnn.com/2020/04/23/economy/unemployment-benefits-coronavirus/index.html Empowering through Educational Excellence 11 2020-21 Budget Update Economic Projections V U 2 Years Empowering through Educational Excellence L 10 Years 12 2020-21 Unofficial Projections SCCCD AMT Percent LA Times Report (from LAO) $35 B in lost Revenue -$48 M - 22.6% Rainy Day Fund 17.9 B (6 B used for COVID response, expected to be reimbursed from FEMA/CARES) • Planning to use over 3 years • Assuming that he uses 50% to backfill this year +$12 M + 6% Estimated Cut to Revenue -$36 M - 16.6% Reedley’s Budget is $33.4M, Clovis is $25.3M and Madera is $13.8M $36M would be the cost of 313 new faculty members Empowering through Educational Excellence 13 Emergency Funding FEMA—Only Reimbursing 75% of our emergency purchases • • • • Laptops/mifis Cleaning Supplies OT due to cleaning Donated PPE CARES Funding • CARES • 50% to students that experienced issues due to COVID • Only US Residents • Only those that qualify for IV funding • Has to be due to need for Technology, Housing, loss of income Location Fresno City Clovis Reedley College Allocation ST and Inst. $11,224,898 $2,870,984 $5,612,449 $1,435,492 $4,243,892 $2,121,946 • 50% to institution • Expenses for transitioning to online instruction Empowering through Educational Excellence 14 2020-21 Factors Factor Cost-of-living adjustment (COLA) Employer pension contribution rates Public Employees' Retirement System (CalPERS)  State Teachers' Retirement System (CalSTRS)  2020-21 January 2020-21 Est. April Most Likely Funded At 2.29% 1.9% 0%   22.80% 22.68% 18.40% 18.4% Empowering through Educational Excellence 15 Pension Reform EMPLOYER RATE 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% PROJECTED PENSION RATES BY PLAN 28.200% 26.500% 25.500% 24.800% 22.080 1 8.082% 15 531 10.10034. 10.10094. 10.10094. 10.10094 17.10014. 1 6.280% 1 2.580% 8.880% 8.250% 2013-14 2014-15 2015-16 2016-1? 201?-18 2013-19 2019-20 2020-21 PROPOSED PROPOSED PROPOSED PROPOSED 21-22 22-23 23-24 24-25 Empowering through Educational Excellence 16 Deferrals & Deficits • Department of Finance is already asking about how we would sustain a 1 month deferral. Nothing is planned at this time. A deferral would be preferable to a deficit. • Deferral gets paid, just late • Deficit just gets cut • Deferrals in the Great Recession were up to 25%. Empowering through Educational Excellence 17 Reserves Year 1—2020-21 % of Fund General Fund   Revenue Cut Projected       Reserves 11--General Fund XX0-17% LT0     Co Curricular 41--Capital Outlay** 53--Bookstore   62--Retiree Benefit Fund (STRS/PERS)       Cuts On-Going Operational Capital Outlay Transfer Technology   OPEB         $   $ $ $ $ $ $   37,803,000 7,365,000 783,000 46,505,000 5,000,000 19,480,000 Subtotal Reserves needed less Use of Reserves     217,411,735* 36,000,000* 16.6%   Need it for Deferrals   $ 6,976,000 $ 5,000,000 $ 5,844,000 $ 17,820,000 $ 18,180,000   $ 3,000,000 $ 2,000,000 $ 1,900,000 Subtotal $ 6,900,000 Amount Not Covered 11,280,000 *Assumptions, **Most of the funding is committed to existing projects Empowering through Educational Excellence   15.0% 100.0% 30.0%   8.4%       5.2%   18 Reserves Year 2—2021-22 % of Fund General Fund   $ 217,411,735*   Revenue Cut Projected         Reserves 11--General Fund XX0-17% $ LT0 $     Co Curricular $ 41--Capital Outlay** $ 62--Retiree Benefit Fund (STRS/PERS) $ 36,000,000*   37,803,000 7,365,000 783,000 39,529,000 13,636,000 Subtotal Reserves 16.6%   Need it for Deferrals   $ 5,929,000 $ 5,863,000 $ 11,792,000 $ Cuts needed less Use of Reserves 24,208,000 On-Going Operational Capital Outlay Transfer   $ 3,000,000 Technology $ 2,000,000 OPEB       $ 1,900,000 Subtotal on-going $ 6,900,000 Amount Not Covered 17,308,000 Increase from Prior Year *Assumptions, **Most of the funding is committed to existing projects Empowering through Educational Excellence   15.0% 43.0% 11.1%     8.0% 2.8% 19 Reserves Year 3—2022-23 General Fund     Revenue Cut Projected         Reserve 11--General Fund XX0 $ LT0 $     Co Curricular $ 41--Capital Outlay** $ 62--Retiree Benefit Fund (STRS/PERS) $ Cuts needed less Use of Reserves   On-Going Operational Capital Outlay Transfer Technology   OPEB           $ 217,411,735 36,000,000   % of Fund   16.6%   37,803,000 Need it for Deferrals 7,365,000 783,000     33,600,000 $ 0.0% 7,773,000 $ 3,887,000 50.0% $ 3,887,000 $ 32,113,000 14.8%   $ $ $ Subtotal on-going $   3,000,000 2,000,000 1,900,000 6,900,000 Amount Not Covered 25,213,000 Increase from Prior Year   *Assumptions, **Most of the funding is committed to existing projects Empowering through Educational Excellence     11.6% 3.6% 20 Capital Outlay Projects • At this point, we still anticipate the state capital outlay funding our three projects • Economic Stimulus • Bond Funds Empowering through Educational Excellence 21 Question 3? 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