PBIM SUMMIT August 29, 2014

TODAYS INFORMATION  State Budget Highlights  Peralta’s Final Budget  Funding Sources  Unrestricted General Fund  Parcel Tax Fund

STATE BUDGET  4th Consecutive Year the budget passed on time  Based on the Governor’s conservative forecast  Progress made toward paying down deferrals  Down to $94 million from $592 million before passage of Prop 30  Governor has clearly laid out his path  Protect against boom and bust cycles  Retire Debt  Focus new money on education  Includes a reserve of $1.4 million  Includes a Rainy Day Fund

STATE BUDGET  Wall of Debt  Budget eliminates $10 Billion in debt  Mid year positive trigger would further reduce deferrals to schools and colleges  Rain Day Fund on November Ballot  When capital gains exceed 8% of GF revenues, a deposit to the RDF is required  Half used to pay off debt and liabilities for the first 15 years  Allows for withdrawal for disasters or if spending is at or below highest level of spending of the prior 3 years  CalSTRS – 30 Year obligation of $74.4 billion  State GF contribution increase from 3% to 6.3% in  Employee rate increase from 8% to 10.25% as of  Employer rate increase from 8.25% to 19.1% as of 2021

STATE BUDGET The Budget Bill contained the following community college provisions:  Access funds (growth) of $140.4 million (2.75%)  Cost of Living Adjustment (COLA) of $47.3 million (.85%)  $100 million for Student Success and Support (SSSP)  Match of 2:1 on entire amount  $30 million increase for DSPS  $70 million increase for Student Equity Plans  $50 million one time increase for the Economic and Workforce Development program  $49.5 million to pay down mandates  $148 million for deferred maintenance and instructional equipment. Flexible locally and specified as one-time.

COMMUNITY COLLEGE WHAT’S NEW  Technical Assistance for Chancellors Office  $1.1 million and 9 positions for goal setting and monitoring of institutional effectiveness  $2.5 million for technical assistance to support implementation of effective practices at college  State funding for Career Development and College Program (CDCP) Rate per FTES to be increased to be equal to Credit Rate as of  Positive Trigger –  Department of Finance can pay down deferrals during the year if Proposition 98 guarantee is higher than estimated  New formula for Growth allocation is effective in  Proposal to be out late summer/early fall

CAUTIONS AND CONCERNS  Proposition 30 is temporary  Sales tax increase terminates at the end of 2016  (Approximately 21% of Prop 30 revenues)  Income tax increase terminates at end of 2018  STRS obligation  Deficits  Continued exposure to shortfalls in property taxes and fees

OUR DISTRICT - PCCD  Access funds (growth) $2.2 million (increase in funded FTES of 430)  Cost of Living Adjustment (COLA) $846,989 (.085%)  Categorical increases – awaiting on allocations from the State Chancellors Office  $2,366,996 for scheduled maintenance/instructional equipment  Flexible locally and specified as one-time  No match except if the funds are used for Architectural Barrier Removal  State Retirement increases to employer rates:  STRS.63% increase ; $198,600  PERS.329% increase ; $73,563  Increase in Medical Premiums $979,893  Kaiser 0%;  Traditional PPO 26%  Lite PPO 24.9%  Traditional PPO (Local 39) 22.1%  Lite PPO (Local 39) 17.5%  Increase in Workers Compensation rate of.1% estimated cost of $54,500  Increase in OPEB Debt service payment of $1,642,666

ADDITIONAL ASSUMPTIONS USED TO DEVELOP THE BUDGET  FTES – Target of 19,355 Residence FTES with funded FTES from the state of 19,055  Productivity level of 17.5  Unrestricted Lottery dollars funded at $ per funded FTES  State Apportionment deficit factor of 2%  Parcel Tax revenue estimated to be $8,053,385

STATE APPORTIONMENT REVENUE State Apportionment Revenue is calculated in the following manner:  Basic Allocation  Based on the type and size of your college  We have 4 colleges with less than 9,375 FTES and therefore our basic allocation is $13,286,180 ($3,321,545 per college)  Funded Base Full Time Equivalent Students (FTES)  Prior year funded FTES  Funded FTES  Prior year funded FTES times the growth percentage passed in the State Budget

STATE APPORTIONMENT CALCULATION  Funding per FTES  Base Funding  Amount per FTES from prior year ($4, for credit FTES; $2, for non- credit FTES)  Marginal Funding  Base funding multiplied by the Cost of Living Adjustment (COLA)  COLA for is.85% (%4, for credit FTES; $2, for non-credit FTES)  Multiply the Marginal Funding times the number of funded FTES reported  Add the Basic Allocation plus the Funding Per FTES to calculate your State apportionment revenue, also referred to as the computational revenue.

FUNDING FOR COMPUTATIONAL REVENUE  Sources are  Local Property Tax  98% of Student Enrollment Fees  State Aid  State General Fund Apportionment  Prop 30 Education Protection Account (EPA)  Deficit  Computational Revenue accounts for approximately 80% of our General fund operating budget each year

COMPUTATIONAL REVENUE SOURCES

UNRESTRICTED GENERAL FUND FINAL BUDGET SUMMARY Revenue Final Budget Estimated Actuals Actuals Federal Revenue $ - State Revenue $ 67,396,913 $ 65,270,981 $ 64,346,744 Local Revenue $ 46,682,083 $ 45,137,518 $ 47,174,459 Transfer In Revenue $ 13,128,094 $ 11,691,939 $ 9,152,116 Revenue Total $ 127,207,090 $ 122,100,438 $ 120,673,319 Expenses Full Time Academic $ 21,353,690 $ 18,252,185 $ 16,233,586 Academic Admin $ 4,864,416 $ 4,214,079 $ 3,466,038 Other Faculty $ 5,679,831 $ 5,388,306 $ 4,002,127 Part Time Academic $ 8,226,114 $ 12,310,320 $ 13,723,964 Classified Salary $ 24,469,094 $ 21,974,337 $ 20,070,280 Fringe Benefits $ 38,598,080 $ 36,409,122 $ 37,216,997 Books, Supplies, Services $ 15,954,977 $ 14,561,377 $ 12,576,388 Equipment Capital Outlay $ 175,836 $ 327,151 $ 148,456 Debt Service / Transfers $ 7,885,052 $ 7,053,604 $ 9,613,258 Expense Total $ 127,207,090 $ 120,490,481 $ 117,051,094 Revenue over Expenditures $ 1,609,957 $ 3,622,225 Beginning Fund Balance $ 14,209,208 $ 12,599,251 $ 10,017,896 Audit Adjustments $ - $ -1,040,870 Ending Fund Balance $ 14,209,208 $ 12,599,251

MEASURE B – PARCEL TAX Revenue Final Budget Estimated Actuals Actuals Local Revenue $ 8,055,785 $ 8,056,883 $ 7,683,197 Revenue Total $ 8,055,785 $ 8,056,883 $ 7,683,197 Expenses Full Time Academic $ - Academic Admin $ - Other Faculty $ - Part Time Academic $ 6,500,000 $ 5,586,364 $ 3,222,024 Classified Salary $ 369,702 $ 747,079 $ 247,511 Fringe Benefits $ 624,511 $ 738,164 $ 610,737 Books, Supplies, Services $ $ 369,470 $ 1,372,129 Equipment Capital Outlay $ - $ 135,600 $ 55,156 Expense Total $ 7,494,213 $ 7,576,677 $ 5,507,567 Beginning Fund Balance $ 2,655,836 $ 2,175,630 Revenue over Expenditures $ 561,572 $ 480,206 $ 2,175,630 Ending Fund Balance $ 3,217,408 $ 2,655,836 $ 2,175,630

Questions