FINAL BUDGET September 9, 2014

AGENDA  State Budget Highlights  Peralta’s Final Budget  Funding Sources  Unrestricted General Fund  Parcel Tax Fund  Budget Allocation Model Summary

STATE BUDGET  4 th Consecutive Year the budget passed on time  Includes a reserve of $1.4 billion  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 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

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

GENERAL FUND REVENUE SOURCES

COMPUTATIONAL REVENUE SOURCES

GENERAL FUND EXPENDITURES

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

IMPLEMENTATION OF THE BUDGET ALLOCATION MODEL  In August of 2010, the Planning and Budgeting Council began working on the creation of and recommendation to the Chancellor a Budget Allocation Model (BAM)  Purpose to:  Move from the existing model to a model that would better serve the Colleges and District  Fully respond to previous Accreditation recommendations  Core Principles:  Provide financial stability  Consistent with the State’s SB361 funding model  Simple and easy to understand  Provide for a reserve in accordance with Peralta’s Board Policy  Maintain autonomous decision making at the college level  Responsive to the District’s and Colleges’ planning processes

BUDGET ALLOCATION MODEL Budget Allocation Model Worksheet Base Allocation: Total Revenue Allocation $ 128,791,119 Total Exclusions (18,754,797) Applicable Revenue $ 110,036,322 AlamedaBerkeley LaneyMerritt Three Year FTE Rolling Averages 3, , , , Percentage19.36%19.54%40.66%20.44% Revenue Allocation by College $ 20,994,479 $ 21,876,414 $ 44,689,920 $ 22,475,510 Out of State and International Allocation 679,8561,538,3211,847, ,754 DO Service Center Budgets (4,050,934) (4,221,105) (8,623,024) (4,336,702) Centralized Services Budgets (1,181,076) (1,230,690) (2,514,098) (1,264,393) Net Revenue Allocation by College $ 16,442,326 $ 17,962,939 $ 35,400,036 $ 17,399,168 Unrestricted Expenditure Budgets $ 15,523,535 $ 15,684,256 $ 30,961,345 $ 17,475,512 Parcel Tax expenditure budgets $ 1,448,823 $ 1,464,996 $ 2,777,320 $ 1,442,750 Total Expenditures $ 16,972,358 $ 17,149,252 $ 33,738,665 $ 18,918,262 Expenditures (over)/under Net Revenue Allocations by College (530,032)813,687 1,661,371 (1,519,094)

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