BUDGET DEVELOPMENT PROCESS & TENTATIVE BUDGET BOARD OF TRUSTEES MEETING JUNE 25, 2007

June 25, Resource Allocation DRAC – District Resource Allocation Council DRAC – District Resource Allocation Council Current process established by Board of Trustees’ action May 1997 Current process established by Board of Trustees’ action May 1997 Charged with the development and oversight of the allocation process Charged with the development and oversight of the allocation process Makes recommendations to the Chancellor Makes recommendations to the Chancellor

June 25, Council Composition Nine voting members: Nine voting members: –2 Academic Senate Presidents or designee –2 Academic Senate faculty appointments –2 Directors of College Fiscal Services –2 Vice Presidents of Instruction –1 District representative appointed by Chancellor Chaired by Deputy Chancellor (non-voting) Chaired by Deputy Chancellor (non-voting)

June 25, DRAC Revenue Allocation Model Location prior year ending balances carried forward Location prior year ending balances carried forward Revenue calculations based on SB 361 Revenue calculations based on SB 361 FTES is updated according to attendance reports (CCFS-320) submitted to the State FTES is updated according to attendance reports (CCFS-320) submitted to the State State Budget Act State Budget Act –COLA –Growth –Other Local College-based Revenue Local College-based Revenue –Non-resident tuition, facilities use fees, student materials fees

June 25, Allocations DRAC Model Distribution : DRAC Model Distribution : –Colleges = 81.2% (split according to FTES) –District = 9.8% fixed –General Expenses = 2.5% (legal fees, audit fees, IT priority projects, retiree benefits, property & liability insurance, election costs, etc.) –Contingency = 6.5% fixed according to Board of Trustees’ budget development guidelines

June 25, Expenditure Budget Process District Fiscal Services updates all salaries & benefits: District Fiscal Services updates all salaries & benefits: –Step and Column movement –Apply annual contractual increases –Update Health Benefit Budget –Update OPEB (Retiree Liability Costs) –Revise Payroll Expense Rates STRS, PERS, Unemployment Insurance, Worker’s Comp, etc.STRS, PERS, Unemployment Insurance, Worker’s Comp, etc. Revise General Expense Budget Items Revise General Expense Budget Items

June 25, District Services & ATEP Expense Budget Budget Worksheets are Distributed to Departments via the Vice Chancellor and Provost offices Budget Worksheets are Distributed to Departments via the Vice Chancellor and Provost offices Departments: Departments: –Review Budgets for Personnel Position Accuracy –Allocate Supply and Operating Funds to Accounts –Consult with Director of Fiscal Services and Deputy Chancellor as appropriate

June 25, District Services & ATEP Expense Budget, cont’d. Budgets are Updated for Rising Costs Budgets are Updated for Rising Costs –Memberships Commission on Athletics, Community College LeagueCommission on Athletics, Community College League –New Employee Fingerprinting –Maintenance agreements for equipment & software Copiers, Mail Machines, Fusion System (for Capital Projects)Copiers, Mail Machines, Fusion System (for Capital Projects) Deputy Chancellor & Director of Fiscal Services make recommendations to the Chancellor for all district services Deputy Chancellor & Director of Fiscal Services make recommendations to the Chancellor for all district services

June 25, Irvine Valley College Expense Budget Total Allocation established by DRAC model Total Allocation established by DRAC model Budget Worksheets are Distributed to Departments Budget Worksheets are Distributed to Departments Departments: Departments: –Review Budgets for Personnel Position Accuracy –Propose Budgets for Discretionary Expenditures: SuppliesSupplies ContractsContracts –Propose Budgets for Mandatory Expenditures: Maintenance agreements for equipment & softwareMaintenance agreements for equipment & software UtilitiesUtilities

June 25, Irvine Valley College Expense Budget, cont’d. Director of College Fiscal Services reviews departmental budgets in consultation with Vice Presidents, Deans, and Directors Director of College Fiscal Services reviews departmental budgets in consultation with Vice Presidents, Deans, and Directors Significant new expenditure items are discussed within various shared governance groups and recommendations are made to the President Significant new expenditure items are discussed within various shared governance groups and recommendations are made to the President –Strategic Planning Process Comprehensive report submitted to the Board of Trustees in May 2007Comprehensive report submitted to the Board of Trustees in May 2007 Involves Academic Senate, ASIVC, Classified Management, Classified Senate, CSEA, Deans, and Faculty AssociationInvolves Academic Senate, ASIVC, Classified Management, Classified Senate, CSEA, Deans, and Faculty Association

June 25, Irvine Valley College Expense Budget, cont’d. –Budget Committee Makes recommendations to the President on fiscal mattersMakes recommendations to the President on fiscal matters Involves Academic Senate, ASIVC, Classified Management, Classified Senate, CSEA, Deans and Faculty AssociationInvolves Academic Senate, ASIVC, Classified Management, Classified Senate, CSEA, Deans and Faculty Association Vice Presidents & Director of College Fiscal Services make final recommendations to the President for all departmental budgets Vice Presidents & Director of College Fiscal Services make final recommendations to the President for all departmental budgets President makes final decisions on budgetary matters President makes final decisions on budgetary matters

June 25, Saddleback College Budget Process Revised Budget Allocation Process Two Years ago: Revised Budget Allocation Process Two Years ago: –Previously - Planning and Budget Committees Separate –Currently - Integrated Planning and Budget Process – Planning and Budget Council (PBC) Membership: Membership: – Academic Senate (4) – Deans Cabinet (2) – ASG (2) – Director of College Fiscal Svcs (1) – Classified Staff (2) – Vice Presidents (2) – Classified Mgmt (1) – College President (non-voting)

June 25, Saddleback College Budget Process Four Strategic Planning Committees: Four Strategic Planning Committees: Governance & Planning Groups provide input, plans, recommendations: Governance & Planning Groups provide input, plans, recommendations: – Student Success – Institutional Effectiveness – Campus Environment – Enrollment Management – Equipment Committee – Academic Senate – Technology Committee – Classified Senate – Hiring Committee – Student Government – Program Review – Deans Cabinet – Maintenance Plan – Student Services Council

June 25, Saddleback College Budget Process Process: Process: –PBC reviews all planning documents –PBC establishes College Strategic Plan –Director of College Fiscal Services provides budget data –PBC reviews budget status –PBC makes recommendations to College President –President makes decision and informs College Community Overriding Planning and Budget Parameters: Overriding Planning and Budget Parameters: –Increase enrollment –Safe and well maintained facilities and grounds –Increase Student retention and persistence –Culture of institutional effectiveness based on assessment outcomes –Fiscal Stability (Strategic Plan, SB 361 impact)

June 25, Saddleback College Budget Process College wide allocations established by Fiscal Office College wide allocations established by Fiscal Office Associate Faculty/overload allocations established by Office of Instruction Associate Faculty/overload allocations established by Office of Instruction Deans/Directors provided with allocation amounts for operations Deans/Directors provided with allocation amounts for operations Deans/Directors manage and distribute operational funds based on Division plans Deans/Directors manage and distribute operational funds based on Division plans Fiscal Office approves all budget revisions; projects and monitors expenditures for fiscal stability Fiscal Office approves all budget revisions; projects and monitors expenditures for fiscal stability

June 25, Saddleback College Budget Process Planning and budget revision: Planning and budget revision: – PBC regularly makes recommendations to College President in accordance with Strategic Plan – State allocation revisions – Local income adjustments – Grants and contracts – All budget adjustments coordinated through Fiscal Office Planning & budget is a continual year round process Planning & budget is a continual year round process President manages College budget process and is President manages College budget process and is responsible for College fiscal stability responsible for College fiscal stability

SOCCCD Tentative Budget

June 25, Tentative Budget Assumptions Net SB361 Revenue Increase of $12.3 Million Net SB361 Revenue Increase of $12.3 Million – $7.5M FTES Increase to Base funding – $4.9M Increase Based on 4.53% SB361 COLA – $1.7M Increase Based on 1.50% Growth estimate –($1.8M) One time block grant in $5.4M GF Unrestricted Ending Balance carried forward from $5.4M GF Unrestricted Ending Balance carried forward from

June 25, Assumptions Continued 6.5% Reserve for Economic Uncertainties 6.5% Reserve for Economic Uncertainties 10.0% Estimated Increase for Health & Welfare Benefits and Property & Liability coverage 10.0% Estimated Increase for Health & Welfare Benefits and Property & Liability coverage Salary Increases: Salary Increases: –CSEA : 4.53% per existing contract –Faculty, Classified Managers, Academic Administrators, Police Officers Association – to be determined by negotiations & board actions

June 25, SOCCCD: Overview of Fund Structure Tentative Budget General Fund (GF):$200.4 Million, Including: General Fund (GF):$200.4 Million, Including: –Unrestricted GF: $179.9 Million –Restricted GF: $ 20.5 Million Other Funds*: $163.2 Million Other Funds*: $163.2 Million Total All Funds: $363.6 Million Total All Funds: $363.6 Million * Other Funds Include: Community Education, Child Development, Capital Outlay (Including Basic Aid Projects), Debt Service, Capital Outlay (Including Basic Aid Projects), Debt Service, Self-Insurance, & Retiree Benefit Funds Self-Insurance, & Retiree Benefit Funds

June 25, COPS Debt Retirement 1996 Issue = $18.9M 1996 Issue = $18.9M Will Be Retired June 1, 2008 Will Be Retired June 1, 2008 Sufficient funds are available from prior year Basic Aid allocations to retire the debt Sufficient funds are available from prior year Basic Aid allocations to retire the debt

June 25, OPEB (Retiree Benefits Liability) Actuarial Study performed in May 2006 Actuarial Study performed in May 2006 –Total obligation $80.2M –Unfunded Liability is $58.3M – Contribution to the Obligation is $5.1M Current Year Service = $3.3MCurrent Year Service = $3.3M Past Service = $1.8MPast Service = $1.8M Funded with Basic AidFunded with Basic Aid –Additional contributions $6.8M $5.0M formerly used to retire COPS debt$5.0M formerly used to retire COPS debt $1.8M income from Promenade apartments$1.8M income from Promenade apartments

June 25, “Basic Aid” Receipts $ 5,676, $ 5,676, $ 9,192, $ 9,192, $13,719, $13,719, $18,419, $18,419, $27,356, $27,356, $40,162, $40,162, $46,899, $46,899, * $50,566, * $50,566, * **$41,976, * **$41,976,293 * Estimated (Exact Amounts Will not Be Available Until the End of Each Fiscal Year). Per OC Tax Assessor, Secured Property Taxes were estimated to increase 9% in Per OC Tax Assessor, Secured Property Taxes were estimated to increase 9% in , 7% in , and 5% thereafter. A 15% decline in Supplemental Taxes is , 7% in , and 5% thereafter. A 15% decline in Supplemental Taxes is projected for projected for ** Decline due to recovery of FTES at colleges in

June 25, Basic Aid Funds Included In Budget $10.1M OPEB (Retiree Benefits) Contribution$10.1M OPEB (Retiree Benefits) Contribution $ 1.9M ATEP Operating Budget$ 1.9M ATEP Operating Budget $ 3.8M Phase II for Student Information System$ 3.8M Phase II for Student Information System $26k for Legislative Advocacy for Basic Aid issues$26k for Legislative Advocacy for Basic Aid issues $51.1M Currently Undesignated$51.1M Currently Undesignated