BUDGET DEVELOPMENT PROCESS

1
BUDGET DEVELOPMENTPROCESS TENTATIVE
BUDGET

• BOARD OF TRUSTEES MEETING
• JUNE 25, 2007

2
Resource Allocation

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

3
Council Composition

• 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)

4
DRAC Revenue Allocation Model

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

5
Allocations

• DRAC Model Distribution 2007-08
• 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

6
Expenditure Budget Process

• 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, Workers
  Comp, etc.
• Revise General Expense Budget Items

7
District Services ATEP Expense Budget

• Budget Worksheets are Distributed to Departments
  via the Vice Chancellor and Provost offices
• 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

8
District Services ATEP Expense Budget, contd.

• Budgets are Updated for Rising Costs
• Memberships
• Commission on Athletics, Community College League
• New Employee Fingerprinting
• Maintenance agreements for equipment software
• Copiers, Mail Machines, Fusion System (for
  Capital Projects)
• Deputy Chancellor Director of Fiscal Services
  make recommendations to the Chancellor for all
  district services

9
Irvine Valley College Expense Budget

• Total Allocation established by DRAC model
• Budget Worksheets are Distributed to Departments
• Departments
• Review Budgets for Personnel Position Accuracy
• Propose Budgets for Discretionary Expenditures
• Supplies
• Contracts
• Propose Budgets for Mandatory Expenditures
• Maintenance agreements for equipment software
• Utilities

June 25, 2007
9
10
Irvine Valley College Expense Budget, contd.

• 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
• Strategic Planning Process
• Comprehensive report submitted to the Board of
  Trustees in May 2007
• Involves Academic Senate, ASIVC, Classified
  Management, Classified Senate, CSEA, Deans, and
  Faculty Association

June 25, 2007
10
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Irvine Valley College Expense Budget, contd.

• Budget Committee
• Makes recommendations to the President on fiscal
  matters
• Involves 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
• President makes final decisions on budgetary
  matters

June 25, 2007
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Saddleback College Budget Process

• 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

13
Saddleback College Budget Process

• Four Strategic Planning Committees
• Governance Planning Groups provide input,
  plans, recommendations

14
Saddleback College Budget 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
• 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)

15
Saddleback College Budget Process

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

16
Saddleback College Budget Process

• 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
• President manages College budget process and
  is
• responsible for College fiscal stability

17
SOCCCD2007-08 Tentative Budget
18
2007-08 Tentative Budget Assumptions

• Net SB361 Revenue Increase of 12.3 Million
• 7.5M 2006-07 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 2006-07
• 5.4M GF Unrestricted Ending Balance carried
  forward from 2006-07

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Assumptions Continued

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

20
SOCCCD Overview of Fund Structure2007-08
Tentative Budget

• General Fund (GF) 200.4 Million, Including
• Unrestricted GF 179.9 Million
• Restricted GF 20.5 Million
• Other Funds 163.2 Million
• Total All Funds 363.6 Million
• Other Funds Include Community Education, Child
  Development,
• Capital Outlay (Including Basic Aid Projects),
  Debt Service,
• Self-Insurance, Retiree Benefit Funds

21
COPS Debt Retirement

• 1996 Issue 18.9M
• Will Be Retired June 1, 2008
• Sufficient funds are available from prior year
  Basic Aid allocations to retire the debt

22
OPEB (Retiree Benefits Liability)

• Actuarial Study performed in May 2006
• Total obligation 80.2M
• Unfunded Liability is 58.3M
• 2007-08 Contribution to the Obligation is 5.1M
• Current Year Service 3.3M
• Past Service 1.8M
• Funded with Basic Aid
• Additional contributions 6.8M
• 5.0M formerly used to retire COPS debt
• 1.8M income from Promenade apartments

23
Basic Aid Receipts

• 1999-2000 5,676,800
• 2000-2001 9,192,300
• 2001-2002 13,719,277
• 2002-2003 18,419,919
• 2003-2004 27,356,952
• 2004-2005 40,162,878
• 2005-2006 46,899,203
• 2006-2007 50,566,203
• 2007-2008 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
• 2006-07, 7 in 2007-08, and 5 thereafter. A
  15 decline in Supplemental Taxes is
• projected for 2007-08.
• Decline due to recovery of FTES at colleges in
  2006-07

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Basic Aid Funds Included In Budget

• 10.1M OPEB (Retiree Benefits) Contribution
• 1.9M ATEP Operating Budget
• 3.8M Phase II for Student Information System
• 26k for Legislative Advocacy for Basic Aid
  issues
• 51.1M Currently Undesignated