On Tuesday, September 9th, we will hold a special Board study session on the final 2014-2015 District Budget.  The Board will then consider approval of the final budget at the regular Board meeting on September 11th.  I would like to share with you some of the highlights from this year's budget.

Enrollments 

• SBCCD had one of the highest enrollment growths in the state last year and we are one of the few districts to have unfunded FTES. Many districts across the state were not able to meet the growth target for last year.  I am still hopeful that we can gain additional funding for FTES at the January recalculation.
• Since we began 2014-2015 with more than 800 unfunded FTES, we will use the 2014-2015 growth funding of 3.43% to pay down some of the unfunded FTES and leave about 338 unfunded FTES in the district wide budget. 
• The district will pay for the unfunded FTES on a one-time basis, from reserve funds since the colleges are not funded for these classes.
• We are also hopeful that the large demand for services and our unfunded FTES will help to develop an argument for SBCCD being a "district of greatest need" in the new budget model being developed based on the Governor's recommendation and California Senate Bill 860 approved in July 2014. The new funding formula will be based on each district's potential demand for courses, local economic conditions such as poverty and employment rates, and other factors specified in SB860.

 Budget Assumptions

• 0.85% Cost of Living Adjustment
• Funded growth of 3.43 %
• No actual growth in FTES since funds will be used to pay down unfunded FTES from 804 to 338.
• No further assessments to the colleges for current and retiree benefits costs and future costs for current employees. The liability was paid from district reserves in 2013-2014 to provide for additional funds to colleges.
• KVCR supplement will be paid on a one-time basis from the general fund reserve and will not be assessed to the colleges.
• Economic Development and Corporate Training will reduce the cost of their remaining general fund expense by 20%.
• The selective hiring freeze as directed by the Board of Trustees will remain in place; and all positions to be recruited will require the approval of Chancellor's Cabinet, except the initial positions already approved for recruitment as part of the 2014-2015 final budget development process.
• Each college and the District Office will have a "savings factor" built into their budget. This requires savings during the year from personnel changes or non-personnel areas of the budget.
• The district will provide one-time funds for student success initiatives from reserve funds. While this has been done in prior years the funding is always considered one-time and there is no guarantee of ongoing funding.

 Implications

• The budget is very, very tight.  We provided over $6 million in long overdue and well deserved salary increases in 2013-2014 and 2014-2015.
• Employee health benefits have increased by about 11%.
• STRS contributions have increased by almost 1% and will continue to increase until 2021 to fund a multi-billion dollar shortfall.
• The state has provided lump-sum funds for certain initiatives such as student success, student equity plans, disabled student services, workforce development, energy efficiency, and increased CalGrants.

A Word about Staffing

I am deeply committed to hiring as many faculty and staff that our budget can afford.  I recognize the need for full-time faculty replacements and classified support staff. However, what I cannot do as Chancellor is dictate to the colleges how to prioritize their budgetary needs within the available resources.  Each campus has a process that relies on collegial consultation to identify its strategic plans and highest priority needs.

50% Law and FON 

Maintaining the legal requirements of the 50% law and the Faculty Obligation Number is very important to me.  Currently, we project that the 2014-2015 budget will give us a small increase in the 50% law percentages (about 50.51%) and as of fall 2013 we are doing very well with our FON which was 193 and our full-time faculty was at 223.  We will receive our new FON from the state sometime this fall. 

In Conclusion

We are presenting a balanced budget to the Board of Trustees.  However, the budget is balanced by limiting the filling of vacant positions, imposing a savings factor, supporting unfunded FTES and student success on a one-time basis from the reserves, and by focusing expenditures on our highest priorities as supported by  strategic plans and program reviews at Valley College, Crafton Hills College and all District departments.