1. 2013-14 TENTATIVE BUDGET 1

2. OVERVIEW 2012-13 GCC BUDGET PROJECTION 2013-14 STATE BUDGET 2013-14 GCC BUDGET DEVELOPMENT  REVENUE ADJUSTMENTS  EXPENDITURE ADJUSTMENTS  PENDING COLLEGE ISSUES  BUDGET RISKS CONCLUSION 2

3. 2012-13 GCC BUDGET PROJECTION 3

4. 2012-13 Enrollment (at P2) Category Actual FTE’s Base FTE’s* Growth/ Unfunded FTE’s Growth Revenue to Date CREDIT12,06912,232(163)($744K) CAREER DEVELOPMENT COLLEGE PREP 2,6062,276330$1,066K NONCREDIT37142554$148K TOTAL15,04614,933113$174K *Includes workload restoration 4

5. 2012-13 GCC Revenues CategoryBudgetProjectedDifference Base$69,297K$69,867K$ 570K Prior Year Adj.$ 0$ 285K Fee/Tax Deficit$ 0 Part Time Faculty$ 467K $ 0 Lottery$ 1,950K $ 0 Other State$ 466K$ 649K$ 183K 5

6. 2012-13 GCC Revenues (Page 2) CategoryBudgetProjectedDifference Interest$ 200K$ 491K$ 291K Non-Resident$ 2,600K$ 2,776K$ 176K Other Student Fees $ 363K$ 366K$ 3K Other Local$ 62K$ 65K$ 3K Interfund$ 403K $ 0___ Total$ 75,808K$ 77,319K$ 1,511K 6

7. 2012-13 GCC Expenditures CategoryBudgetProjectionDifference Certificated Salaries$32,679K$33,184K$ (505K) Classified Salaries$17,220K$17,188K$ 32K Benefits$16,531K$16,131K$ 400K Supplies$ 592K$ 530K$ 62K Services$ 6,081K$ 6,623K$ (542K) Equipment$ 173K$ 182K$ (9K) Other/Interfund$ 3,655K $ 0K Reserve$ 3,772K 0____$ 3,772K Total$80,703K$77,493K$ 3,210K 7

8. 2012-13 Projected Ending Balance Beginning Fund Balance (7/1/12) $ 4,895K Projected 2011-12 Revenues $77,320K Projected 2011-12 Expenses ($77,493K) Ending Fund Balance (6/30/13) $ 4,721K* *Equivalent to 6.09% of expenditures 8

9. 2013-14 STATE BUDGET 9

10. 2013-14 State Budget On January 10, 2013, Governor released his proposed budget for 2013-14 With the passage of Proposition 30 and improvements in the economy, State no longer has a structural budget deficit For the first time in five years, Governor’s January budget has augmentations for community colleges. 10

11. 2013-14 State Budget - continued $579 million in additional funding for community colleges  $196.7m in increased apportionment funding. BOG to develop recommendation  $315.7m to transfer adult education and apprenticeship programs from K-12 to community colleges  $49.5m to support energy efficiency efforts  $16.9m to enhance online education  $179m to buy down existing apportionment deferral 11

12. 2013-14 State Budget - continued Policy changes  Five year phase in for changing apportionment funding from a census date model to one based on course completion  90 unit cap on students for apportionment funding  FAFSA completion required for BOG fee waiver 12

13. May Revise Governor released May Revise on May 14th $227m augmentation of funding for community colleges an increase of $30m from January  $87.5m for COLA (1.57%)  $89.4m to restore enrollment (1.63%)  $50m for matriculation services to implement Student Success Task Force recommendations Policy changes withdrawn  Census date funding formula  90 unit cap  Shift of adult education to community colleges Additional $64.5m to buy down deferral 13

14. State Budget Effect on Community Colleges 1.57% COLA - $1.097 million 1.63% enrollment restoration - $1.16 million $50 million for Student Success - $650K $49.5 million for energy efficiency efforts (Prop 39) - $692K 14

15. Status of State Budget Legislative Analyst Office (LAO) has projected a $4.5 billion surplus in tax revenues for 2012-13. LAO estimates that May Revise revenue assumptions are understated by $3.2 billion Assembly and Senate Budget Subcommittees have developed proposals to augment budget with additional funds Conference Committee has reconciled the two legislative proposals and is presenting their proposal to legislature for a vote 15

16. State Budget Proposals ItemMay ReviseSenateAssemblyConference COLA1.57% Enrollment Restoration1.63% 1.61%1.63% 2012-13 Deferral Buy Down $180m$248m$220m$180m 2013-14 Deferral Buy Down $64m$116m$20m$30m Instructional Equipment-$12m- Scheduled Maintenance-$12m-$30m Professional Development -$6m- 16

17. State Budget Proposals - continued ItemMay ReviseSenateAssemblyConference Categorical Programs: Basic Skills$20.0m $33.6m$20.0m Student Financial Aid$67.5m$68.1m$72.1m$67.5m EOP&S$64.3m$89.3m$117.2m$79.3m CARE$9.3m$10.6m$17.0m$9.3m DSP&S$69.2m$94.2m$126.8m$84.2m CAlWORKS$26.7m$34.5m$44.3m$34.7m Matriculation$99.2m $127.7m$99.2m PT Health$480k$823k$1,016k$480k PT Parity$24.9m $51.6m$24.9m PT Office$3.5m$5.9m$7.3m$3.5m Nursing$13.4m $22.4m$13.4m 17

18. 2013-14 TENTATIVE BUDGET DEVELOPMENT 18

19. GCC Budget Development Process Unrestricted General Fund Tentative Budget is based on May Revise Assumes ending balance at same level as 2011-12 Assumes a 1.57% COLA Assumes $50m augmentation in Matriculation Does not include 1% deferred pay raise 19

20. 2013-14 Rollover Budget $1.90 million deficit in Rollover Budget  Only vacant positions approved for filling put in budget.  Hourly backfill amounts budgeted for positions not approved for filling  1.25% employee pay cut in 2012-13 restored  2012-13 Budget Reallocation committee cuts restored  2013-14 Exempt Cost augmentations included ($359K augmentation)  5% General Reserve established ($4.0 million)  $400K Contingency Reserve restored 20

21. 2013-14 Projected Revenue Changes State apportionment $1.668M Other State Income$0.167M Interest($0.125M) Non-Resident Tuition$0.200M Other Revenue$0.018M Blue Shield Rebate($0.353M) Total Revenue Augmentation$1.575M 21

22. 2013-14 Exempt Cost Augmentations Utilities $ 20K Postage ($ 20K) Insurance$ 55K Audit$ 10K Health (10% inc)* ($ 103K) State Unemployment Insurance ($ 483K) Step and Column $ 665K Reallocation Reserve $ 50K Retiree Benefits ($ 35K) Five Full-time Faculty $ 200K Total Exempt Cost Augmentations $ 359K *Estimate 22

23. Budget Actions Taken Rollover Budget Deficit ($1.900M) 2008 Retirement Incentive $0.534M Matriculation backfill $0.401M Restore one month reduction ($0.266M) Budget Reallocation Committee $1.215M Total Actions Taken$1.884M 23

24. Reserves ReserveAmountPercent General Reserve$4.000M5.11% Contingency Reserve$0.400M0.51% Reallocation Reserve$0.100M N/A__ Total$4.500M5.62% 24

25. Pending College Issues Adoption of State Budget 1% deferred pay raise 2013-14 New Budget Requests  Instructional Equipment  Deferred Maintenance  Technology Additional classes to meet growth target Collective Bargaining  Health plan changes  Use of 2012 Blue Shield rebate ($716K) 25

26. Budget Risks 2012-13 Statewide deficit  Education Protection Act Revenue  Redevelopment Agency Funds One percent deferred pay raise 26

27. Conclusion State economy is improving and with the passage of Prop 30, community colleges are beginning to see additional funding Community colleges in a better fiscal position with the withdrawal of the Governor’s proposed policy changes (Adult Ed., 90 unit cap, and funding formula) Economy will need to continue to improve once Prop 30 tax increases expire 27