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Board of Trustees Presentation Budget Update December 7, 2009 Mike Brandy, Interim Chancellor FHDA.

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Presentation on theme: "Board of Trustees Presentation Budget Update December 7, 2009 Mike Brandy, Interim Chancellor FHDA."— Presentation transcript:

1 Board of Trustees Presentation Budget Update December 7, 2009 Mike Brandy, Interim Chancellor FHDA

2 Before the governor’s 09/10 budget was signed into law… Foothill-De Anza’s internal deficit was estimated at $6.7M (January 2009 estimates)

3 When the 09/10 budget was passed… The following increased Foothill-DeAnza’s deficit: Cuts to base apportionment Zero COLA Cash deferrals resulting in a reduction to interest earnings

4 FY 09/10 reductions that have been implemented: $6.7M has already been eliminated from 09/10 operating expenses: 68 filled/vacant positions eliminated (escrow funds were set aside to cover 35 positions through 6/30/10) Funding for 16 positions reduced or reassigned to different funding sources - Categorical Programs (Fund 121), Self-Sustaining (Fund 115) or Measure C (Fund 400) 4 positions restructured/reorganized due to retirement $312,655 in “B” budget reductions $200,000 reduction in faculty reassigned time funding $2.6M in part-time faculty costs reduced due to workload reduction (5%)

5 Where were we in July 2009? (Adopted Budget)

6 2010/11 budget projections as of July 2009… IncomeExpenses $3.8M Existing Deficit $4.3M Step, Column, Benefits $7.9M Cuts to Categoricals Enrollment

7 Budget Challenges… Following needed to be addressed in November: How would we reduce the general fund by $8.1 million effective 7/1/10? ($3.8 current ongoing deficit plus $4.3M in anticipated fiscal year 10/11 expense increases) How would we reduce categorical programs by $7.9 million effective 7/1/10? How will FH, DA and CS use their ending balances to buffer expense reductions?

8 What are the results of this analysis? De Anza report (Brian) Foothill report (Judy) Central Services report (Andy)

9 What other changes do we know of at this point? Probable agreement on benefit restructuring to reduce our 2010/11 expenses by $5.3 million (remember, our last estimate for our 10/11 deficit without further state reductions and other operating cost increases is $8.1 million) Probable loss of about $1 million this year due to FTES audit, statewide recalculation of growth for last year and a slight shortfall in non-resident revenue Cover the cost of part-time faculty equity, office hours and health benefits payments for 09/10 due to the loss of categorical funding … approximately $1 million

10 What do these changes mean? We are trying to solve a $8.1 million deficit for 2010/11 Good news is that we will probably reduce our medical benefit expenses by $5.3 million Bad news is that our 10/11 deficit will increase by approximately $1 million since there is no agreement yet to modify the part-time faculty equity program In addition, our revenue estimates for 09/10 and 10/11 may have to be adjusted for lower than anticipated non-resident revenue ($350,000) In summary, our recalibrated unresolved General Fund deficit for 10/11 is currently estimated at approximately $4.1 million (assuming negotiated benefits change implementation)

11 What about the “staff protection reserve” for 10/11 of $7 million? In 09/10 this $7M will probably be reduced by $1 million in revenue reductions noted earlier, and $1 million in expense increases for part-time faculty equity expenses Maybe only leaving $5 million for FY 10/11 Many things will continue to change throughout the year staff protection fund could increase if we have float dollars available at year end or benefit savings staff protection fund could decrease further if there are mid-year cuts from the state

12 Key Points General Fund Even with a negotiated change to benefits we still have an internal deficit of approximately $4.1M estimated for 10/11 Best case scenario – no more cuts to state revenue in 10/11 Worst case scenario – additional cuts $??? Categorical Programs There will be no backfill (such as one-time ARRA funds) from the federal government, resulting in true a reduction for 10/11 of up to $7.9M Total combined projected deficit $12M (assuming negotiated benefits change implementation, no other revenue reductions, and no other expense increases)

13 Plan of Action for January 2010 General Fund Work on solutions to balancing $4.1M deficit Categorical Programs Colleges to finalize analysis of programs to evaluate impact of cuts on students and staff

14 Distribution of cuts (est. as of December 2009) De AnzaFoothill Central ServicesDistrict WideTotal General Fund (Fund 14)$ 1,742,020$ 1,049,112$ 1,368,867$ 4,160,000 Categorical Programs$3,075,796$3,424,936$1,323,860$7,824,591 Total Deficit$ 4,817,816$ 4,474,048$ 1,368,867$ 1,323,860$ 11,984,591

15 Many thanks to everyone for making it possible for our students to receive their education in these trying fiscal times

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