California Community College Leadership Academy 3CLA September 21 2017 Kathy Blackwood Executive Vice Chancellor San Mateo County Community College District Student Learning Outcomes SLOs Acquire better understanding of ID: 712533
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Community College Funding: How it works and why it matters
California Community College Leadership Academy (3CLA)
September 21, 2017
Kathy Blackwood, Executive Vice Chancellor, San Mateo County Community College DistrictSlide2
Student Learning Outcomes (SLOs)
Acquire better understanding of:
How K-14 education is funded in California
How CCC districts are funded
Acquire a working knowledge of:
The basics of FTES/WSCH
The very basics of fund accounting and the BAM
Where to look for CCC fiscal information
Understand where we’re going from here:
New initiatives: Strong Workforce, Guided Pathways, Promise Programs
New funding formulaSlide3
California Public Education Structure
University of California (UC)
California State University (CSU)
K-14 education in California
Proposition 98 – passed in Nov. 1988
K-12, the big dog – why?Community collegesPolitical strengths/Political weaknessesProp 98 “share”Slide4
California Community Colleges
2016-2017
How many districts?
72
How many colleges?
114Newest –
Compton College
How many centers?
76+
Grandfathered - 37
State Approved - 39
Newest – Rancho Cordoba Education Center
Los Rios CCD
March 2016Slide5
California Community Colleges2017-2018
Total
system-wide budget
Approximately $7
billion
Community Supported (Basic Aid) DistrictsHow can you tell they’re community supported? Aren’t we all?Nine districts as of P2 2016-2017
Mira
Costa, South Orange, Marin, San Mateo, San Jose-Evergreen and West
Valley-Mission
In as of 16/17 (P2) – Napa College, San Luis Obispo, Sierra College
But they were in at 15/16 P2 and out by 15/16
RecalcSlide6
Funding Rates
2016-2017
UC -
$26,391
270,000
students10 collegesCSU - $14,723480,000
students
23 colleges
K-12 -
$11,601
6,227,000 students
10,453 schools
CCC - $7,949*2,127,000 students1,186,000 FTES* - includes state GF, property taxes, student fee revenue and unrestricted lottery funds – source CCLCSlide7
Review of the CCCCO Organization
Structure –
BOG
1102 Q Street
Appointments
State AgencyNew Chancellor!Eloy Ortiz Oakley of LBCC
Power compared to UC & CSU?
Governance StructuresSlide8
How California Funds K-14 Education
Proposition 98
Passed by voters in November 1988
K-14 receives a share of state
revenues
collectedMinimum funding guaranteed by formulaThree “tests”Community college system receives
approximately
11% share of Prop 98 revenues
Minimum guarantee percentage of Prop 98 -10.92%
However, not a guarantee…
Legislature can suspend to fund at a lower level
Minimum guarantee has also become maximum guarantee
Funding follows state economyWhen economy is good, increases in fundingWhen economy is poor, decreases in fundingWhat’s wrong with this reality for our colleges and students?Slide9
How the CCCCO Funds the Districts
Unrestricted General Fund
Principal Apportionment process – Exhibit C
Becomes Exhibit E once final recalculated certification (R1)
Eight months after close of fiscal year (Feb P1)
SB361 Funding Allocation Model - 2006Replaced Program Based Funding from AB1725Differences of SB361 methodology compared to Program Based Funding formula
Other CC District source of Funds
Categorical program entitlements (SSSP, DSPS, Student Equity, BFAP),competitive grants, regional grants (SBDC), regional collaborative (adult ed), Economic Development, special purpose funds, etc.
More often based on FTES counts and students served
counts as well as Pell grants, unemployment, etc.Slide10
SB361 Funding Formula
Equalized
FTES
marginal
funding ratesCredit FTES - $5,151.24 (17/18)6 districts grandfathered base rate is higherEx.- West Kern = $6,766,65/cr. FTESNon-credit - $3,097,58 (17/18)
Career Development/College Prep – CDCP - $5,151.24 (17/18)
Old “non-credit enhanced”
Now equalized with credit rate
Base Allocations for colleges and centers based on size
Acknowledges economies of scale
Minimum level of service to operate a college
Acknowledges rural (small) district funding need/supportSlide11
SB361 Funding Formula Challenges
Large recent state investment in specialized programs
Categorically funded
That’s great for our targeted student needs
Declining support for core funding for unrestricted general funds
Cost of Living Allowance (COLA)Growth/Access (earned)
Base Augmentations
Budget
c
hallenges for district’s unrestricted general funds due to state primarily investing new Prop 98 funds for CC’s in new Categorical Programs
Small or no COLAs in the foreseeable future
Implicit Price Deflator formula
New Growth/Access ModelConstrains many districts to miniscule growth opportunities regardless of unfunded FTES and actually serving more studentsSlide12
What are budgets?
Authorization to spend
Approved by Board of Trustees
Estimate of revenues and expenditures
Salaries & benefits
Other expensesAllocation of resourcesSlide13
What are Budgets?
Maximum amount that can be spent in a major classification
Transfers and revisions must be approved by a 2/3 majority of the board
This includes transfers from contingency
Title V 58307Slide14
Budget Calendar
On or before the 15th day of September of each year the governing board of each community college district shall prepare and keep on file for public inspection a statement of all receipts and expenditures of the district for the preceding fiscal year and a statement of the estimated total expenses for the district for the current fiscal year.
Title V 58300Slide15
Budget Calendar
Jan. 10: Governor’s Budget
May 15: Revised Governor’s Budget
June 30: District Tentative Budget
June 30: State Budget
Sept 15: District Final BudgetSlide16
Common Budget Builders
COLA
Deficit factor
Growth/Decline in FTES (impacts categorical, lottery, and
adjunct
budget)InterestLottery
Compensation settlements
Productivity
Benefits
Utilities
Supplies/equipment
Other operating
Reserves for contingencySlide17
Common Differences
Redevelopment funds
Bonds/other debt
Contract education
Leased space revenue
Farms/other industriesCapital constructionDebt paymentsContract instruction
Leased space costs
Golden HandshakesSlide18
Budget Cuts
Personnel:
Hiring freeze
Managed hiring
No OT/Comp time
Productivity/GrowthIncrease class sizeGrow – where?Eliminate low performing programs
Operations
Utilities
Conference/travel
Renegotiate contracts
Increase revenue
What are you no longer going to do?Slide19
Building Blocks: Adjunct Budget
Definition of FTES
One Full Time Equivalent Student is defined as 525 contact hours over an academic year
An academic year is defined as 35 weeks
525 hours per year / 35 weeks per year means that a FT student is in class 15 hours a week
One Weekly Student Contact Hour (WSCH) is one student in class one hour per week for 35 weeks Slide20
Building Blocks: Adjunct Budget
Definition of
Productivity or Load
– Weekly Student Contact Hours per Full Time Equivalent
Faculty (some use FTES/FTEF)
One full time faculty teaching 15 hours per week with 35 students in each class is generating 525 WSCH/FTEFSlide21
Projecting Costs
16/17 Hourly teaching budget development model
FTES
WSCH
Prod Target
FTEF Needed
FT FTE Available
Hourly FTE Needed
Average Cost per FTE
Budget Needed
6,867
103,005
500
206.01
118.67
87.35
$62,885
$5,492,747 Slide22
Communicating
FTES
WSCH
Prod
Target
FTEF Needed
FT FTE Available
Hourly FTE Needed
Average Cost per FTE
Budget Needed
6,867
103,005
500
206.01
118.67
87.35
$62,885
$5,492,747
6,867
103,005
510
201.97
118.67
83.31
$62,885
$5,238,727
6,867
103,005
525
196.20
118.67
77.54
$62,885
$4,875,842
6,867
103,005
490
210.22
118.67
91.55
$62,885
$5,757,134
6,867
103,005
480
214.59
118.67
95.93
$62,885
$6,032,538 Slide23
Communicating = Changing
What is the difference between 525 and 535?
525 WSCH per FTEF is a class size of 35.
535 WSCH per FTEF is a class size of 35 ⅔.
Take 1 more student -- NO!!Slide24
Communicating = Changing
SIMPLY KEEP EVERY STUDENT THAT SHOWS UP ON THE FIRST DAY OF CLASSES!Slide25
Budget and Accounting Manual (BAM) Basics
You need to know the basics of Fund Accounting (the BAM) to
Read and understand the CCFS 311
Understand district account
codes
Chart of accountsThe BasicsFundProgram – source of fundsActivity – where spent
Object – for what?Slide26
BAM Fund Accounting
General Fund
Unrestricted
Restricted
Special Revenue Fund
Child Care CentersParcel TaxCapital Projects FundGeneral Obligation BondsScheduled MaintenanceDebt Service
Payment for General Obligation Bonds
Enterprise Fund
Bookstore, Cafeteria, Fitness Center, Copy Shop, Farm, etc.
Internal Service Fund
Self-Insurance
Trust Funds
Financial AidStudent BodySlide27
Fund
2017-18 Budget
% of Total
Unrestricted General Fund
$177,330,818
42.58%
Restricted General Fund
48,185,039
11.57%
Child Development Fund
1,269,697
0.30%
Capital Projects Fund
98,296,552
23.60%
Debt Service Fund
54,369,200
13.05%
Bookstore Fund
7,693,000
1.85%
Cafeteria Fund
289,000
0.07%
San Mateo Athletic Club (SMAC)
3,940,000
0.95%
Community, Continuing, and Corp Ed
1,391,000
0.33%
Self-Insurance Fund
1,566,330
0.38%
Trust Funds (Financial Aid)
17,942,178
4.31%
Reserve for Post-Retirement Benefits
4,200,000
1.01%
TOTAL
$416,472,814
100.00%Slide28
Unrestricted General Fund
Revenue
1
Federal Revenue
0
2
State Revenue
9,927,904
3
Local Revenue
167,402,914
4
Total Revenue
177,330,818 Slide29
Expenses
5
Cost of Sales
0
6
Certificated Salaries
71,177,060
7
Classified Salaries
38,719,695
8
Employee Benefits
41,477,136
9
Materials & Supplies
7,777,026
10
Operating Expenses
23,857,604
11
Capital Outlay
385,042
12
Total Expenses
183,393,563 Slide30
Transfers & Other
13
Transfers In
0
14
Other Sources
0
15
Transfers out
(4,683,407)
16
Contingency/Deficit
(83,627)
17
Other Out Go
0
18
Total Transfers/Other
(4,767,034)
Fund Balance
19
Net Change in Fund Balance
(10,829,780)
20
Beginning Balance, July 1
33,882,785
21
Adjustments to Beginning Balance
0
22
Net Fund Balance, 6/30
23,053,006 Slide31
Where to Find Additional Budget and Fiscal Information
Chancellor’s Office Website
cccco.edu
Community College League of California
ccleague.org
Association of California Community College Administrators accca.orgAssociation of Chief Business Officials acbo.org
Academic Senate for California Community Colleges (glossary)
asccc.org/glossary
Calif. Dept.
of
Finance (state budget)
ebudget.ca.govSlide32
New Inititatives
Guided Pathways:
$150M - $15M goes to the CO off the top
Remainder takes each college from where they are to the next step in implementing the pathways
Strong Workforce:
CTE fundingBased regionallyIntegrated Planning:Basic Skills, Equity and SSSP funding to be integratedSlide33
New Funding Formula
Chancellor’s Task Force on Fiscal Affairs
Same group (more or less) developed SB361 10 years ago
Looking at outcomes based funding
Reviewing other state models – successes and failures
Proposal will be vetted through state governance processesSlide34
Questions?
Kathy Blackwood blackwoodk@smccd.edu