1. Budget Development & Issues 2007-2008 & 2008-2009
San Diego Community College District
Budget Development & Issues &
CAMPUS FORUMS
Dr. Constance M. Carroll
Chancellor
Terry Davis
Vice Chancellor, Business Services

2. California Community Colleges Budget Process
State Budget - Proposition 98
Governor - Legislature
State Board of Governors & System
Local Boards of Trustees & Districts 72
Districts
Federal &
Special Funds
109
Colleges
Allocations
San Diego Community College District

3. Governor’s Budget (January 10, 2008)
DEFICIT OF $14.5 BILLION
STRATEGIES:
Reduce Expenditures
Align Expenditures/Revenue
Enhance/Restructure Revenue
COMPONENTS:
Zero COLA
1% Growth
10% Across-the-Board Cuts
Categorical Program Cuts
No Increase in Student Enrollment Fee
Mid-Year Cuts
($40 Million for CCC)

4. Legislative Analyst’s Office
DEFICIT HAS GROWN TO $16+ BILLION
RECOMMENDATIONS:
Zero COLA
1.5% Growth
Categorical Block Grants
“Student Success” ($430 Million)
“Faculty Support” ($60 Million)
No Mid-Year Cuts
Increase in Student Enrollment Fee
(Back to $26 per unit)
BREAKING NEWS:
Property Tax Shortfall ($76-80 Million)
In Current Year ( )
Projected for Budget Year ( )

5. San Diego Community College District
PROCESS:
Broad Consultation & Participation
Board of Trustees
Chancellor’s Cabinet
District Governance Council (DGC)
District Budget Committee
Colleges/CE Shared Governance Groups
Campus Forums
VALUES & GOALS:
Avoid Negative Impact on Contract Faculty/Staff
Maintain Sufficient Classes & Services for Students
Increase FTES Revenue
Increase Average Class Size
Enact Cost-Containment Measures

6. San Diego Community College District
Preliminary Budget
General Fund Unrestricted Only

7. Preliminary Budget 2008-09 is based on the Governor’s initial budget proposals:
Reductions that range from 3.62 % to % in Categorical Programs (Loss of $266,000 in GFU)
No COLA in (Normal inflationary costs = $3M-$4M)
1 % maximum growth (Restricts our revenue options)
Assumes no Mid-year cuts of $1.4 million
Does not include loss due to Property Tax Shortfall (Potential loss of $2.8M)
In addition, the Preliminary Budget includes the following:
A roll forward of budgets plus inflationary costs to selected operating expense accounts such as utilities and maintenance contracts
Employee class and step advance costs
$1.78 million in supplemental funding for additional class sections so campuses are funded at the same FTEF level in as in (Budget Model FTEF plus Supplemental FTEF)
- Budgeted annual FTEF in :
City = 677 FTEF Mesa = 931 FTEF Miramar = 395 FTEF

8. 2008-2009 Budget Model FTEF Allocations
Total FTEF Used in (Ex. Academies)
2,160.54
Total FTEF Funded (Ex. Academies)
1,988.13
FTEF Reduction below
172.41
Pro-rating the FTEF reduction to Colleges results in FTEF Allocations as follows :
City
Mesa
Miramar
Total
FTEF Used
735.21
995.74
429.59
2,160.54
% of Total
34.029%
46.088%
19.883%
100.00%
Share of 172 Reduction
58.67
79.46
34.28
172.41
Total FTEF to be Funded
676.54
916.28
395.31
1,988.13
Final Budget (Per Model Formula)
631.42
889.56
370.90
1,891.88
FTEF Increase for Final
45.12
26.72
24.41
96.25
Total FTEF Funded
Total FTEF Funded
Note: Total reflects minimum FTEF funding levels if no other funds or budget savings are used to pay for additional class sections.

9. 2008-2009 Preliminary Budget General Fund Unrestricted Only
Continuous Revenue
Adjusted Budget
Preliminary Budget
Changes Over/Under
Apportionment Allocation
190,687,672
190,885,712
198,040
Other State Funds
8,799,266
8,233,027
(566,239)
Other Funds
7,728,935
7,305,737
(423,198)
Incoming Transfers
1,797,900
Total Continuous Revenue
209,013,773
208,222,376
(791,397)
Continuous Expenses
Reserves & Set Asides
13,686,175
12,518,513
(1,167,662)
Campus Allocations
139,716,344
142,375,876
2,659,532
Districtwide Support
47,924,805
50,091,935
2,167,130
District Offices
17,623,787
18,370,808
747,021
Total Continuous Expenses
218,951,111
223,357,132
4,406,021
Continuous Expenses (over) Revenue
9,937,338
15,134,756
5,197,418
(Reliance on one-time funds)

10. Reserves and Set Asides
Set Aside to cover remaining RAF
4,959,894 *
District's 50% share of RAF mandated benefits
434,209
Set Aside for RAF POA
116,055
Set Aside for RAF POA
83,664
Classified reclassifications
150,000
Set Aside to fill Contract Faculty Positions
987,685
Set Aside from for Potential Growth Distribution in RAF
344,096
Set Aside for Equalization Benefit Reserve (Out Years)
3,386,652
Balance of Set Aside for Prop S per Docket #890 8/25/2005
1,399,552
Balance of Set Aside for Prop N per Docket #892 3/22/2007
656,706
Total Reserves and Set Asides
12,518,513
* Budget items that should be fully allocated by June 30, 2008

11. Revenue and Expense Projections
Continuous Revenue vs. Expenses Summary Preliminary:
Total Projected Continuous Allocations:
Campus Allocations
142,375,876
Districtwide Support Allocations
50,091,935
District Office Allocations
18,370,808
Reserves and Set Asides
12,518,513
Total Continuous Allocations
223,357,132
Total Projected Continuous Revenue:
State
199,118,739
Local
7,305,737
Transfers
1,797,900
Total Continuous Revenue
208,222,376
Projected Continuous Expenses (Over) Under Revenue
(15,134,756)

12. Revenue and Expense Projections (cont.)
Projected Continuous Expenses (Over) Under Revenue
(15,134,756)
Use of One-Time Resources: Projected Ending Balance
14,148,713
One-Time Allocation
To Balance GFU Continuous Operating Budget
15,134,756
Reserve for Economic Uncertainty ( and )
2,000,000
Prior Year Encumbrances
950,000
Permanent Records Conversion
128,485
Holding Accounts - AFT (Computer Loan)
40,000
Holding Accounts - Risk Management
572,630
Campus Carryforward One-Time Ending Balance Reserves
1,376,030
Advertising - Districtwide
325,000
Total Funding Required
20,526,901
Adjustments Required to Balance Budget
(6,378,188)

13. Reduce Continuous Costs
Reduce or eliminate programs or services, maintenance agreements or contracts, professional service agreements, etc.
Eliminate vacant positions (86 % of Districtwide expenses in in General Fund Unrestricted was for salaries and benefits).
Implement hiring delays and cost containment procedures.
But there is an easier and more permanent way to balance continuous costs and continuous revenue …

14. Impact of Average Class Size on Funding Requirements
Campus Ending Balances
Campus Ending Balances
Based on Budget Model Funding Only
2,558,495
(6,370,378)
Funding for Supplemental Class Sections
5,520,138
Transfers to Basic Skills
644,146
Transfers to Prop 20 Lottery
206,094
Adjusted Ending Balance
Average Class Size 34 28

15. Result of Lower Class Size
Revenue Change Due to Class Size ($28,120,000)
5.6 students per class x 1100 FTES per 1.0 student increase above
28.4 per class x $4,565 per credit FTES = $28,120,000
Note: 1.0 student increase above an average of 28.4 students in every class will generate 1100 FTES, or $5 million in credit apportionment revenue.
Solution:
Reduce number of class sections to stay within funding provided through the Budget Model formulas, while increasing average class size to maintain FTES base or to grow in FTES.

16. Distribute New Revenue to Cover all Current and Future Increasing Costs
As new continuous revenue is received, it needs to be allocated to address several issues such as …
Economic improvements for employees
Eliminate structural budget problem and reduce reliance on one-time funds
Provide funds to cover $13.1 million (today’s dollars) in Proposition S & N continuous costs
Improve both academic and non-academic permanent staffing levels
Any issues not addressed at least in part from new revenue sources will become more difficult to solve in the future. 12

17. Summary
Based on the Governor’s initial budget proposal, a roll forward of the budget to , and a potential “deficit factor”, requires $10.1 million in budget “adjustments” that need to be made between the Preliminary Budget (February) and the Tentative Budget (June).
Adjustments need to be made in both continuous costs and one-time costs to balance the budget and address the structural budget problem and reduce reliance on one-time funds.
How the budget issues are resolved will impact the magnitude of the budget challenges in
Class schedules need to continue to be adjusted to bring costs in line with Budget Model funding formulas, and increase average class size back to levels.
Future revenue needs to be allocated in such a way that all budget requirements are addressed.

18. Proposed Budget Adjustment Plan1.
Adjustments to Preliminary to Balance Budget
6,378,188 2.
Additional Adjustments to Reduce Structural Budget Problem
1,000,000 3.
Increase to Cover Potential 1.33% Deficit Factor in due to Property Tax Shortfall
2,800,000 4.
Total Adjustment Goal
10,178,188 5.
Summer 08 Roll to Grow 254 Credit and 300 Non-Credit FTES for 1.34% Total Growth (2-Year Total Revenue).
(4,258,220) 6.
Growth of 1.0% in (210 Credit and 210 CDCP Non-Credit)
(1,637,370) 7.
Savings from Delay in Hiring Vacant Academic Positions (28.04 positions)
(867,937) 8.
Savings from Delay in Hiring Vacant District Classified Positions (Non-campus staff)
(519,057) 9.
GFU Offset from Basic Skills
(719,310)
10.
Eliminate Scheduled Maintenance Matching Funds
(451,247)
11.
Remaining Budget Adjustment Required
1,725,047