Foothill-De Anza Budget
Update
November 6, 2009
Before the governor’s 09/10 budget
was signed into law…
Foothill-De Anza’s internal deficit was estimated
at $6.7M (January 2009 estimates)
When the 09/10 budget was passed…
The following increased Foothill-DeAnza’s
deficit:
• Cuts to base apportionment
• Zero COLA
• Cash deferrals resulting in a reduction to
interest earnings
FY 09/10 reductions that have been
implemented:
• $6.7M has already been eliminated from 09/10
operating expenses:
• 68 filled/vacant positions eliminated (escrow funds were set aside to
cover 35 positions through 6/30/10)
• Funding for 16 positions reduced or reassigned to different funding
sources - Categorical Programs (Fund 121), Self-Sustaining (Fund 115)
or Measure C (Fund 400)
• 4 positions restructured/reorganized due to retirement
• $312,655 in “B” budget reductions
• $200,000 reduction in faculty reassigned time funding
• $2.6M in part-time faculty costs reduced due to
workload reduction (5%)
Where were we in July 2009?
(Adopted Budget)
$3.8M
Greater
than
Income
Revenue
Expenses
2010/11 budget projections as of July
2009…
Income
Expenses
Our resources … budgeted positions in
the general fund for FY 09/10
Employee Group
General Fund
Certificated
490
Non-Certificated
540
Other (Board of Trustees Members)
Total
5
1035
Budget Challenges…
Following needed to be addressed by
November:
• How would we reduce the general fund by $8.1 million
effective 7/1/10? ($3.8 current ongoing deficit plus $4.3M in
anticipated fiscal year 10/11 expense increases)
• How would we reduce categorical programs by $7.9 million
effective 7/1/10?
• How will FH, DA and CS use their ending balances to buffer
expense reductions?
What are the results of this analysis?
• De Anza report (Brian)
• Foothill report (Judy)
• Central Services report (Andy)
What other changes do we know of at
this point?
• Possible agreement on benefit restructuring to reduce our
2010/11 expenses by $5.3 million (remember, our last
estimate for our 10/11 deficit without further state
reductions and other operating cost increases is $8.1
million)
• Probable loss of about $1 million this year due to FTES
audit, statewide recalculation of growth for last year and a
slight shortfall in non-resident revenue
• Cover the cost of part-time faculty equity, office hours
and health benefits payments for 09/10 due to the loss of
categorical funding … approximately $1 million
What do these changes mean?
• We are trying to solve a $8.1 million deficit for 2010/11
– Good news is that this could be reduced by $5.3 million IF
a benefits settlement is reached
– Bad news is that our 10/11 deficit will increase by $1
million since there is no agreement yet to modify the parttime faculty equity program
– In addition, our revenue estimates for 09/10 and 10/11 may
have to be adjusted for lower than anticipated non-resident
revenue ($350,000)
In summary, our recalibrated unresolved deficit for 10/11
is approximately $4.1 million (assuming negotiated
benefits change implementation)
What about the “staff protection
reserve” for 10/11 of $7 million?
• In 09/10 this $7M will be reduced by
• $1 million in revenue reductions noted earlier, and
• $1 million in expense increases for part-time faculty equity
expenses
– Leaving only $5 million for FY 10/11
• Many things will continue to change throughout the year
– staff protection fund could increase if we have float
dollars available at year end or benefit savings
– staff protection fund could decrease further if there are
mid-year cuts from the state
Key Points
General Fund
• Even with a negotiated change to benefits we still have an internal
deficit of approximately $4.1M estimated for 10/11
• Best case scenario – no more cuts to state revenue in 10/11
• Worst case scenario – additional cuts $???
Categorical Programs
• There will be no backfill (such as one-time ARRA funds) from the
federal government, resulting in true a reduction for 10/11 of up to
$7.9M
Total projected deficit $12M (assuming negotiated benefits change
implementation, no other revenue reductions, and no other
expense increases)
Key Dates
• December 2009
– Outcomes of benefits negotiations will be
known
• January 2010
– Governor’s 2010 proposed budget released
– FHDA reviews and adjusts budget strategy
for fiscal year 10/11
Plan of Action
General Fund
• Work on solutions to balancing $4.1M deficit
to be initiated in January 2010
• Colleges and Central Services to conduct an
analysis beginning January 2010 to determine
if any new ongoing cuts (positions/B budget
reductions) can be funded with one-time carry
over for several months
Plan of Action (continued)
Categorical Programs
January 2010
• Colleges to finalize analysis of programs to
evaluate impact of cuts on students and staff
• Colleges to determine if any categorical
program cuts can be deferred with their
projected ending fund balance from 09/10
Many thanks to everyone for making it
possible for our students to receive their
education in these trying fiscal times