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FY 2011-2012 Final Budget.  The District prepared a 2011-2012 budget projection following release of the Governor’s initial budget proposal in January.

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Presentation on theme: "FY 2011-2012 Final Budget.  The District prepared a 2011-2012 budget projection following release of the Governor’s initial budget proposal in January."— Presentation transcript:

1 FY Final Budget

2  The District prepared a budget projection following release of the Governor’s initial budget proposal in January  That projection reflected a budget problem, composed of both reduced revenues and increased costs, in the amount of $18.4 million.  A plan for addressing this problem was then developed and discussed in a variety of forums, including a presentation to the Board of Trustees in February Riverside Community College District FY Final Budget

3 FY Budget Problem$ (18.41) Proposed Budget Adjustments/Strategies 1.Contingency Drawdown to 5% Reserve Level (July 1, 2011)$ FY P1 Apportionment Adjustment DSPS Revenue Adjustment/Categorical Backfill Reduction PERS Rate Increase Adjustment from 14.0% to 13.3% No Additional BCTC Sheriff Academy Payoff Major Gifts Campaign Receivable and Eliminate Performance Riverside Accumulated Deficit Outsource Safety & Police Dispatch Operation0.25 Riverside Community College District FY Final Budget

4 Proposed Budget Adjustments/Strategies (continued) 8.Eliminate March Dental & March Education Center Rent Reduce New Facility Operating Cost Estimates Reduce Printing of Class Schedule & Catalog Positive Budget Variance Enrollment/Schedule Reductions Compensation Adjustment Short-Term Temporary & Student Employees - 20% Reduction Reduce 5% Contingency Reserve to 3.0% Interfund Borrowing from Resource 4130 (La Sierra Capital) 1.12 FY Remaining Budget Problem$ - Riverside Community College District FY Final Budget

5 Although there are some differences in the detail, our early analysis of the State budget situation was on target. Thus, the proposed RCCD budget is based on the plan we developed several months ago. The plan for addressing the FY budget shortfall included a loan of $1.12 million from Resource 4130 (La Sierra Capital). Since the contingency/reserve balance is projected to be above the 3% level, the additional loan was not included in this budget proposal. FY Reserve Requirement 3%$ 4.47 Contingency/Reserve Balance 5.84 Amount Above 3%$ 1.37 Riverside Community College District FY Final Budget

6 Risks The District faces the very real possibility of mid-year general apportionment reductions if State revenue projections are not realized. The reductions will be “triggered” in two phases referred to as Tier 1 and Tier 2. In addition, it is likely that the State has overestimated the amount of student enrollment fees by a approximately $25 million. Mid-Year Reduction ScenarioDistrict Tier 1 ($30 Million Systemwide)$ 0.73 Tier 2 ($72 Million Systemwide)1.75 Enrollment Fee Shortfall ($25 million Systemwide) 0.61 Total$ 3.09 Possible Solutions to Mid-Year Reductions in FY December 31, 2011 Retirees Estimated Golden Handshake Savings$ 1.00 Contingency/Reserve Amount Above 3% 1.37 Total$ 2.37 Riverside Community College District FY Final Budget

7 Enrollment For fiscal ’12, the District will face a 6.21% workload reduction directed by the State, which equates to 1,666 credit FTES. Significant enrollment risk exists within the State adopted budget. If certain revenue projections fail to materialize, the two mid-year revenue reductions mentioned previously could be triggered, resulting in additional workload reductions. Tier 1 could result in a workload reduction of 160 credit FTES. Tier 2 could result in an additional workload reduction of 383 credit FTES. Riverside Community College District FY Final Budget

8 Mid-Year Reductions Budget Possible Possible Proposal Tier 1 Tier 2 Credit FTES Beginning Funded Base Credit FTES 26,811 26,811 26,811 Less, Workload Reduction (1,666) (1,826) (2,209) Ending Funded Credit FTES 25,145 24,985 24,602 Colleges Target Credit FTES 26,357 26,357 26,357 Unfunded Credit FTES (1,212) (1,372) (1,755) Unfunded Percentage -4.82% -5.49% -7.13% Riverside Community College District FY Final Budget

9 Looking Ahead – FY The prospects for the FY budget picture are not good. It is likely the State’s budget situation will deteriorate. Our budgetary problems are three fold:  Decreasing budgets from the State.  Built-in cost escalation in our expenditure budgets.  A budgetary imbalance whereby ongoing budget issues are being addressed by one- time budget solutions. A “Solutions Sustainability Analysis” was prepared several months ago to assist the District in assessing this situation (see the following page).  $8.30 million of our $18.41 million budget problem for FY was solved via the use of one-time funding.  Interfund borrowing was used to solve one-time budget problems for fiscal ’12 and fiscal ‘11. The combination of one-time solutions, interfund loan repayments, annual State budget cutting and cost escalation factors (e.g. new space to maintain, contractual agreements, etcetera), have created an overall budget problem for RCCD that requires that we focus our attention beyond the annual budget. Riverside Community College District FY Final Budget

10 Solutions Sustainability Analysis* FY Projection Best Middle Worst Case Case Case Revised Projection$ (1.88) 1 $ (5.77) 2 $ (7.43) 3 Prior-Year One-Time Solutions (8.30) (8.30) (8.30) Projected Budget Problem, Fiscal Year $(10.18) $(14.07) $(15.73) 1 Assumes $5.94m in New State Funding 2 Assumes $1.67m in New State Funding 3 Assumes No New State Funding *Presented to the Board of Trustees and to college and District groups in Spring 2011 Riverside Community College District FY Final Budget


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