Adopted Budget2011-12
August 22, 2011
1
Overview
State Budget Overview
Board Goals
BAC Planning Assumption Highlights
FTES History and Projection
List of All District Funds – Expenditures & Other Outgo
Expenditure Reductions
Adopted Budget
2011-12
August 22, 2011
2
Overview (continued)
Unrestricted General Fund Details
Overall Summary
Revenue Summary
Major Revenue Changes in 2011-12
Expenditure Summary
Major Expenditure Changes in 2011-12
Reserves
Breakdown between Fixed and Discretionary Budgets
8-Year Trends
Future Budget Challenges3
Adopted Budget
2011-12
August 22, 2011
State Budget Overview
Zero COLA (0%)
No growth funding
Student fees increased $10 to $36 per unit
$290 million net reduction to apportionment
$5.9 million cut to Long Beach City College
No restoration of 2009-10 categorical fund cuts
Increased deferrals $129 million to $961 million - $24.6 million for LBCC
Issued Tax Revenue Anticipation Notes (TRANS)4
Adopted Budget
2011-12
August 22, 2011
Board GoalMeasure & Improve Fiscal & Infrastructure Stability
Commitment to Reduce Deficit Spending
$8,141,755 deficit spending to maintain service levels to students
$4,643,566 million surplus for 2010-11
Maintain 5.0% General Fund Reserve
Total reserves equal $10,003,926 (9.1%)
5% reserve $5,491,729
5
Adopted Budget
2011-12
August 22, 2011
Board GoalMeasure & Improve Fiscal & Infrastructure Stability (continued)
Focus on Advancement of Student Success Plan
$2,134,717 Unrestricted General Fund
$713,177 Restricted General Fund
Reserve to fund campus maintenance & IT functions
$225,213 budgeted reserve in the Unrestricted General Fund (carried over from prior year) for Technology Master Plan
6
Adopted Budget
2011-12
August 22, 2011
BAC Planning AssumptionHighlights
There will be budget redirections and potential reductions in response to both the State’s budget impact and the priorities as identified by the College Planning Committee (CPC)
Maintain a 5.0% unrestricted reserve for contingencies
Deficit spending will be minimized
Carryover will only exist for the Technology Master Plan and Facilities Improvement Funds.
7
Adopted Budget
2011-12
August 22, 2011
BAC Planning Assumption Highlights (Continued)
Zero (0%) COLA is budgeted
No Growth is budgeted. Target FTES is 19,618
A 1% deficit factor will be included to offset possible short fall from apportionment revenues.
Load Banking Reserve
Budgeted the $2.3 million liability
Vacation Liability Reserve
Budgeted $330,125 liability
8
Adopted Budget
2011-12
August 22, 2011
BAC Planning Assumption Highlights (Continued)
Benefit costs continue to increase:
Health and welfare costs increased by $1.3 millionOffset by plan changes and increased employee contributions
PERS rate increased 0.2%
SUI increased 0.9%
Workers’ Compensation increased 0.06%
Part-time hourly budget will contain sufficient dollars to meet the FTES target in accordance with class schedules
9
Adopted Budget
2011-12
August 22, 2011
20,923
18,806
21,268
21,499 21,499
20,457
20,931
19,618
30
705105
17,000
17,500
18,000
18,500
19,000
19,500
20,000
20,500
21,000
21,500
22,000
04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12
Unfunded FTES
Funded FTES
10
FTES History and Projection
Total21,529
Total21,162
BudgetAnnualTotal
21,036
List of Funds – Expenditures & Other Outgo (in millions)
11
Adopted Budget2010-11
UnauditedActual
2010-11
AdoptedBudget 2011-12
Unrestricted General Fund $ 109.8 $ 104.5 $ 109.8
Restricted General Fund 18.2 21.5 20.4
Capital Projects Fund 11.2 5.1 7.6Child & Adult Development Fund 1.6 1.4 1.6
Contract/Community Education Fund 0.7 0.4 0.7
General Obligation Bond Funds 472.7 56.8 461.3
Retiree Benefits Fund 2.3 2.2 2.4Self-Insurance Fund 1.0 0.9 1.0Student Financial Aid 50.9 54.5 56.8Vet Stadium Operations 1.0 1.0 1.2
Total $ 669.4 $ 248.3 $ 662.8
Expenditure Reductions - $5.5 Million
Management Team Furloughs of 3.08% - $339,000
Management Team Evening dean duties continue - $86,000
Health benefit plan changes and employee contribution increases:
Faculty $543,000
Classified $573,000
Management $210,000
12
Adopted Budget
2011-12
August 22, 2011
Expenditure Reductions - $5.5 Million (continued)
Classified reduction in force and reorganization - $1,563,000
Management reduction in force and reorganization - $760,000
Suspending three sports - $74,000
Reduction to part-time faculty - $500,000
Cut discretionary budgets approximately 20% - $887,000
13
Adopted Budget
2011-12
August 22, 2011
Unrestricted General FundOverall Summary
14
UnauditedActual
2010-11
AdoptedBudget 2011-12
Change Increase/
(Decrease)
Revenues and Other Financing Sources
$ 109,145,155 $ 101,692,834 $ (7,452,321)
Expenditures and Other Outgo 104,501,589 109,834,589 5,333,000
Surplus/(Deficit) 4,643,566 (8,141,755) (12,785,321)
Fund Balance $ 18,145,681 $ 10,003,926 $ (8,141,755)
Unrestricted General Fund Revenue Summary
15
UnauditedActual
2010-11
AdoptedBudget 2011-12
Change Increase/
(Decrease)
Federal $ 120,349 $ 120,000 $ (349)
Apportionment 101,226,573 94,856,819 (6,369,754)
Other State 3,955,133 3,107,386 (847,747)
Local 2,520,232 2,524,920 4,688
Other Sources 1,322,868 1,083,709 (239,159)
Total $109,145,155 $101,692,834 $(7,452,321)
Major Revenue Changesin 2011-12
Apportionment - $6.4 million decrease includes a $5.9 million decrease in current year apportionment due to reduced FTES targets caused by state funding reductions and a $0.5 million decrease due to prior year apportionment revenue in 2010-11.
Other State Revenues - $0.8 million decrease consists mainly of decreases in mandated cost reimbursements since future funding is uncertain and a decrease in lottery revenue due to reduced FTES targets.
16
Adopted Budget
2011-12
August 22, 2011
Unrestricted General Fund Expenditure Summary
17
UnauditedActual
2010-11
Adopted Budget 2011-12
Change Increase/
(Decrease)
Academic Salaries $ 43,743,146 $ 44,889,737 $ 1,146,591
Classified Salaries 23,614,430 24,992,138 1,377,708
Benefits 24,940,372 25,680,115 739,743
Supplies 457,915 603,475 145,560
Services 8,783,261 10,625,906 1,842,645
Capital Outlay 545,242 515,595 (29,647)
Other Outgo 2,417,223 2,527,623 110,400
Total $ 104,501,589 $109,834,589 $ 5,333,000
Major Expenditure Changesin 2011-12
Academic Salaries – overall $1.1 million increase is due to hiring 15 new faculty, and the expiration of the 2.3075% furlough. Administrator salaries decreased ≈ $300,000.
Classified Salaries - $1.4 million increase is due to the reduction of management furloughs (3.08%) and expiration of classified furloughs (5.77%) and step freeze less the classified and management reduction in force and reorganization.
Benefits - $0.7 million increase mainly due to salary and rate increases. Health insurance increases were offset by plan changes and increased employee contributions. 18
Adopted Budget
2011-12
August 22, 2011
Major Expenditure Changesin 2011-12 (continued)
Services – overall $1.8 million increase primarily due to rollover budgets and cost conscious measures during 2010-11 by all departments. Major increase related to Election Costs estimated at $450,000
19
Adopted Budget
2011-12
August 22, 2011
20
Salaries & Benefits 87.0%
Unrestricted General Fund Budgeted Expenditures 2011-12
Academic Salaries, 40.9%
Classified Salaries, 22.7%
Benefits, 23.4%
Supplies; 0.5%
Services; 9.7%
Capital Outlay; 0.5%Other Outgo; 2.3%
Unrestricted General Fund Reserves
21
Adopted Budget
Unassigned Reserves
Board Mandated Reserve – 5.0% $ 5,491,729
Economic Uncertainties 1,692,433
Assigned Reserves
Technology Master Plan 225,213
Vacation and Load Banking Reserve 2,594,551
Total $ 10,003,926
Unrestricted General Fund Breakdown Between Fixed & Discretionary Budgets
Adopted Budget2011-12
Percentage of Total Adopted
Budget
Fixed Costs:
Academic Salaries $27,622,830 25.15% Academic Administrator Salaries 3,603,101 3.28% Manager/Supervisor Salaries 5,232,895 4.77% Confidential Salaries 1,135,995 1.03% Classified Salaries 17,897,538 16.30% Benefits 25,680,115 23.38%
Total Salary & Benefit Costs $81,172,474 73.91%
Other Fixed Costs: Professional Services (LBPD) $2,842,845 2.59% Material Fees 86,802 0.08% Software & Online Software Licensing 832,086 0.76% Contracts for Higher One, Actuarial Study, etc. 59,550 0.05% AQMD Fees 35,000 0.03% Utilities 2,694,881 2.45%
22
Adopted Budget
2011-12
August 22, 2011
Unrestricted General Fund Breakdown Between Fixed & Discretionary Budgets (cont.)
Adopted Budget
2011-12Percentage of Total
Adopted Budget
Other Fixed Costs: Copier Maintenance 72,000 0.07% Building Maintenance 387,334 0.35% Rental 133,331 0.12% LACOE Contracts 49,054 0.05% Environmental Health Fees 930 0.00% Election 450,000 0.41% Audit, TRANs & Legal Services 666,330 0.61% Student Services Credit Card Fees 200,000 0.18% Instructional Services (Police & Fire Science) 415,000 0.38%
Lease/Purchase 256,000 0.23% Interfund Transfer Out (Required Match) 1,562,252 1.42%
Total Other Fixed Costs $10,743,395 9.78%
Total Fixed Costs $91,915,869 83.69%
23
Adopted Budget
2011-12
August 22, 2011
Adopted Budget2011-12
Percentage of Total Adopted Budget
Discretionary Costs: Academic Hourly Salaries $ 13,663,806 12.44% Classified Hourly Salaries 725,710 0.66%
Total Hourly Salaries $14,389,516 13.10%
Other Supplies $437,438 0.40% Fuel 59,440 0.05% Professional Services 527,550 0.48% Travel & Conference 142,910 0.13% Staff Development 20,853 0.02% Dues & Memberships 149,243 0.14% Equipment Repairs 245,945 0.22% Postage 151,127 0.14% Other Services & Expenses 542,937 0.49% Capital Outlay 221,797 0.20% Other Discretionary Costs 64,593 0.06% Interfund Transfers Out – Other 965,371 0.88%
Total All Other Discretionary Costs 3,529,204 3.21%Total Discretionary Costs $17,918,720 16.31%
24
Unrestricted General Fund Breakdown Between Fixed & Discretionary Budgets (cont.)
Adopted Budget
2011-12
August 22, 2011
Unrestricted General Fund Breakdown Between Fixed & Discretionary Budgets
(Summary)
Adopted Budget2011-12
Percentage of Total Adopted Budget
Fixed Costs: Academic Salaries $31,225,931 28.43% Classified Salaries 24,266,428 22.10% Benefits 25,680,115 23.38% Other Fixed Costs 10,743,395 9.78%
Total Fixed Costs $91,915,869 83.69%
Discretionary Costs: Discretionary Hourly Salaries $14,389,516 13.10% Other Discretionary Costs 3,529,204 3.21%
Total Discretionary Costs $17,918,720 16.31%
Total Expenditures $109,834,589 100.00%
25
Adopted Budget
2011-12
August 22, 2011
Unrestricted General Fund Breakdown Between Fixed & Discretionary Budgets
(Summary Multiyear Comparison – Total Costs)
Adopted Budget2009-10
Adopted Budget2010-11
Adopted Budget2011-12
Fixed Costs: Academic Salaries $32,702,246 $30,805,108 $31,225,931 Classified Salaries 24,959,575 23,623,469 24,266,428 Benefits 24,055,863 25,517,818 25,680,115 Total Other Fixed Costs 11,615,744 11,170,226 10,743,395
Total Fixed Costs $93,333,428 $91,116,621 $91,915,86982.40% 82.99% 83.69%
Discretionary Costs: Discretionary Hourly Salaries $15,253,912 $15,095,267 $14,389,516 Other Discretionary Costs 4,678,078 3,575,267 3,529,204
Total Discretionary Costs $19,931,990 $18,670,534 $17,918,72017.60% 17.01% 16.31%
Total Expenditures $113,265,418 $109,787,155 $109,834,589
26
Adopted Budget
2011-12
August 22, 2011
27
04-05 Actual
05-06 Actual
06-07 Actual
07-08 Actual
08-09 Actual
09-10Actual
10-11Unaudited
Actual
11-12Adopted Budget
Salaries & Benefits as a % of Total Expenses & Other Outgo 83.8% 84.7% 85.5% 85.2% 86.7% 87.7% 88.3% 87.0%
Surplus / (Deficit) $3.3 $1.2 $7.5 $1.3 ($0.1) ($1.2) $4.6 ($8.1)
Ending Balance $4.9 $6.1 $13.6 $14.9 $14.7 $13.5 $18.1 $10.0Ending Balance as a % of Total Expenses & Other Outgo
5.5% 6.4% 12.9% 13.3% 13.1% 12.4% 17.4% 9.1%
Unrestricted General Fund 8-Year Trend Summary (in millions)
Unrestricted General Fund 8-Year TrendSalaries & Benefits as a % of
Total Expenditures & Other Outgo
28
83.8%84.7%
85.5% 85.2%
86.7%87.7%
Unaudited Actual88.3% Budget
87.0%
81.0%82.0%83.0%84.0%85.0%86.0%87.0%88.0%89.0%
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
$3.3 $1.2
$7.5
$1.3
($0.1) ($1.2)
$4.6
($8.1)
$4.9$6.1
$13.6 $14.9 $14.7$13.5
$18.1
$10.0
-10
-5
0
5
10
15
20
04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 Budget
Surplus/(Deficit) Ending Fund Balance
Unrestricted General Fund 8-Year Trend Ending Fund Balance and Surplus/(Deficit)
29
30
Adopted Budget
2011-12
August 22, 2011
State Revenue Shortfall Mid-Year Spending Reductions
Less than $1 billion below forecast No changes
$1 - $2 billion below forecast $23 million cut to child care$30 million cut to apportionment - $566,180 LBCC share$10 additional enrollment fee increase to $46/unit
Greater than $2 billion below forecast
$ 72 million additional cut to apportionment - $1,358,831 LBCC share
Future Budget Challenges Mid-Year cuts appear likely based on current economic forecasts – as of July State revenues down $540 million
Future Budget Challenges (cont.)
Cash flow concerns – State continues to increase apportionment deferrals
At June 30, 2011 our cash balance in the Unrestricted General Fund was $936,495 after borrowing $7.5 million from ourselves
Fee Shortage – increased BOGG waivers are reducing collections state-wide
Chancellor’s Office already estimating a $25 million (~ 0.4%) shortfall - $432,000 LBCC share
Recovery appears slower than projected
31
Adopted Budget
2011-12
August 22, 2011
Future Budget Challenges (cont.)
State Litigation
Redevelopment Agencies – contesting $1.7 billion payments to state with the Supreme Court
Medi-Cal Providers – going to court to contest proposed changes ($1.3 billion)
Amazon Tax - going to court to try to stop ($0.2 billion)
State’s structural budget deficit projected into 2015-16
Full-time faculty obligation (FON) – once the Board of Governors lifts the obligation suspension, LBCC will need to hire a significant number of full-time faculty
32
Adopted Budget
2011-12
August 22, 2011
Questions?
33
Adopted Budget
2011-12
August 22, 2011