Introduction
One of the most significant responsibilities of a community college district is the preparation and presentation of the annual budget. A district’s budget not only serves as a planning document for the ensuing school year, reflecting the goals and priorities, but also serves as a report to our constituents regarding the utilization of available tax dollars and other funding sources. The State Center Community College District administration is confident that the enclosed budget documents reflect the effective utilization of financial resources to meet the educational goals of our District
Overview
On June 30, 2006, Governor Schwarzenegger signed the 2006-07 State Budget Act. The Legislative Analyst's Office states, that based on current projections of revenues and expenditures under the 2006-07 Budget Act policies, the State will continue to face operating shortfalls in the range of $4.5 billion and $5.0 billion in 2007-08 and 2008-09. The 2006 07 operating deficit of $6.9 billion includes $2.8 billion in prepayment of budgetary debt plus numerous other one-time expenditures.
Considering all aspects of the proposed budget, community college funding per FTES would increase $458 in on-going funds for 2006-07, including categorical and lottery funds. The Budget Act provides a 5.92% COLA for base apportionment and selected categoricals, 2% for growth with a 1.74% growth funding increase for selected categorical programs, and $159.4 million for equalization. The Budget Act also included $298.3 million in one-time funds for a number of programs, including $47 million for scheduled maintenance, $47 million for instructional support, $100 million for a general-purpose grant, $40 million for mandated cost reimbursements and $40 million toward career technical equipment. This funding comes as a large part of the Proposition 98 "settle-up" agreement with the educational community for dropping a lawsuit brought by the California Teachers Association, alleging the State’s Proposition 98 borrowing in prior years must be repaid to K-14 education. Also included is a reduction of student fees from the current level of $26 per unit to $20 per unit effective with the spring semester of 2007.
The District’s Final Budget has been formulated based upon the State-adopted and signed Budget Act for 2006-07 and the passage of SB 361 (new Community College System funding model and equalization funding legislation). The change in the funding model is designed to simplify future years of funding and will have minimal impact on funding in the current year.
Major components of the State Budget Act of 2006-07 under which the District's Final Budget has been prepared include the following:
| Base Apportionment -
$5.0 billion is proposed for the base apportionment. This includes folding PFE money, equalization, and COLA from the 2005-06 fiscal year into the base. |
SCCCD Impact -
The District anticipates this funding level will fully support the State’s commitment to the Community College System. The P-2 report for 2005-06 indicated the current year will be fully funded, with 39 districts showing a decline in FTES and requiring stabilization funding in excess of $108 million..
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COLA -
$294.4 million in funding has been budgeted for COLA. The statutory COLA is 5.92% and is being applied to the General Apportionment and to the following programs: Basic Skills and Apprenticeship, Matriculation, DSP&S, EOP&S and CARE.
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SCCCD Impact -
State Center will receive COLA, which represents a $6.6 million increase to the District’s overall general operating budget with increases to the specified categorical programs stated above. These COLA increases are included in the Budget and are detailed in the following narrative. |
| Growth – $97.5 million has been budgeted for growth. This represents an estimated 2% increase in projected FTES statewide. |
SCCCD Impact -
State Center Community College District has grown significantly during the past five fiscal years. The District has a State formula-driven growth rate, which is estimated to be 3.45% for 2006-07, as opposed to the 3.15% rate in 2005-06. The District budget is projected on full funding of a 2% growth rate. This translates into an estimated $2.3 million increase to the District’s base apportionment, which has been allocated to the Colleges, Centers, and District Operations to cover increased operating costs for salaries, benefits, operational costs and growth. |
| Equalization -
$159.4 million has been budgeted for equalization. This funding will bring total support for equalization to $269.4 million over three years, or the total cost to achieve the goal of equalization funding for community colleges as projected in 2005-06. With the new funding formula contained in SB 361, this will fully fund equalization for the System. |
SCCCD Impact -
$4.8 million has been budgeted. This funding provides a unique opportunity for the District to plan and fund the staffing and operational cost increases associated with the Phase I opening of the Willow/International Center in 2007 and the opening of the Phase II expansion of the Center anticipated to be as early as 2009, along with the Phase I opening of the Old Administration Building in 2009. |
Part-time Faculty Compensation -
$50.8 million for the continuance of part-time faculty compensation to be paid on a full-time-equivalent basis. This allocation remains the same as in 2005-06.
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SCCCD Impact -
Based upon State allocations, the District will continue to receive an estimated $1.1 million in 2006-07. Final appropriation for this category is passed on to part-time faculty, resulting in a $0 increase in discretionary funding for the District.
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| Part-time Faculty Office Hours and Health Insurance -$8.2 million to partially fund part-time faculty office hours and health insurance to be determined on a voluntary basis by each district. This allocation remains the same as in 2005-06..
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SCCCD Impact -
Because the programs have not been fully funded, the District has historically declined to participate in the programs, resulting in a $0 impact. |
| Basic Skills/Apprenticeship Programs -
$48.3 million to fund Basic Skills and Apprenticeship Programs Systemwide. This allocation has increased by COLA and growth from $43.5 million. The Budget also included a $30.7 million one-time re-appropriation of 2005-06 funds to be expended in 2006-07 on basic skills related directly to enhancing the Basic Skills and Immigrant Education Programs.
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SCCCD Impact -
Unknown. State Center participates and provides Apprenticeship Programs through Fresno City College; however, actual apprenticeship hours have fluctuated in recent years. This one-time funding is estimated to be $432,000 and has been allocated to the Colleges and Centers based upon the Basic Skills FTES produced in 2005 06. This is the same method utilized by the State to allocate the funds to the District. |
CalWORKs -
$34.6 million for statewide CalWORKs Programs. This allocation remains the same as in 2005-06. There is a $9 million augmentation from which the Colleges may apply for funding in August. The augmentation has a $1-per-$1 match requirement.
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SCCCD Impact -
Based upon a prorated share of CalWORKs funding, it is estimated that the District will receive approximately $1.1 million. This funding remains the same as in 2005-06. The Colleges are preparing applications for the augmentation money. |
Matriculation - $95.5 million statewide for Matriculation-related services up from $66.3 million in 2005-06. This allocation has increased by COLA and growth of approximately 7.66% plus a $24 million increase to assist students' progress toward their educational goals.
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SCCCD Impact -
$1.1 has been used in preparing the Final Budget, which represents the same funding as received in 2005-06. The State Chancellor’s Office has indicated it will provide updated 2006-07 funding numbers in October. The District anticipates receiving approximately $85,000 in growth and COLA funding and as much as $400,000 from the increase in the funding base. |
Scheduled Maintenance/Hazardous Mater-ials -
$13.7 million statewide for scheduled maintenance/hazardous substances. Eligible projects have been identified and may be funded from this program along with a District funding match requirement. The Budget Act also included $47.0 million to be allocated from one-time resources to the program with no matching dollar requirement.
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SCCCD Impact -
The District is allocating $300,000 to scheduled maintenance/hazardous substances projects. The one-time funding is estimated to be $1.1 million. The District is in the process of developing a multi-year plan for the use of these funds. |
| Student Financial Aid Administration -
$52.6 million to provide funding for Student Financial Aid Administration. This represents a 9.1% increase from the 2005-06 funding level of $48.2 million. |
SCCCD Impact–Unknown. This funding source is based upon eligible student criteria and, therefore, actual funding is unknown. The District received $1.3 million in 2005-06 and has developed its budget based upon this level of funding. The State Chancellor’s Office has indicated it will provide updated 2006-07 funding numbers in October. |
| Partnership for Excellence -
The Partnership for Excellence (PFE) funds have all been rolled into the 2006-07 base budget. The State is implementing the Accountability Report for Community Colleges (ARCC) during 2006-07. This report replaces the previous PFE report. |
SCCCD Impact -
There is no funding impact.
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| Extended Opportunity Programs and Services - $112.9 million statewide for EOP&S and CARE. This program increased in funding by COLA (5.92%) and statutory growth (1.74%) from a 2005-06 funding level of $104.8 million. |
SCCCD Impact -
$2.8 million has been used in preparing the Final Budget which represents the same funding as received in 2005-06. The State Chancellor’s Office has indicated it will provide updated 2006-07 funding numbers in October. The District anticipates receiving approximately $200,000 in growth and COLA funding. |
| Disabled Students Programs and Services -
$107.9 million statewide for DSP&S. This program increased in funding by COLA (5.92%) and statutory growth (1.74%) from a 2005-06 funding level of $91.2 million. |
SCCCD Impact -
$1.5 million has been used in preparing the Final Budget which represents the same funding as received in 2005-06. The State Chancellor’s Office has indicated it will provide updated 2006-07 funding numbers in October. The District anticipates receiving approximately $115,000 in growth and COLA funding. |
| One-Time Funding – $298.3 million for various identified programs. The two largest programs are scheduled maintenance/-hazardous substances and instructional support at $94.1 million, a general-purpose block grant at $100 million and $40 million for career technical equipment. These funds will be allocated on an equitable FTES basis to the districts in the state. In addition, $40 million will be paid to districts to fund mandated cost reimbursements which were earned in prior years, and $20 million will be allocated to the Chancellor’s Office for the implementation of the SB 361 funding model to ensure no community college district is harmed financially by its adoption. The remaining $4.2 million will fund a variety of programs/projects, including internet access, nursing stipends, and nursing placement registries. |
SCCCD Impact – The $94.1 million for scheduled maintenance/hazardous substances and instructional support will provide $1.1 million to each program with no local match requirement. The $100 million general- purpose grant will generate an estimated $2.3 million. The $40 million for career technical equipment will provide $941,000 for this program. The funds for instructional support and career technical equipment have been allocated to the Colleges and Centers on a per- FTE basis and are included in this Budget, although additional planning is required for the effective expenditure of these funds. |
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Local Issues –
Merit District Costs
Currently, State Center Community College District is one of six merit districts in the California Community College System. As such, the law is very prescriptive regarding the employment of classified employees, as well as the recruitment process for said employees. For 16 years the District operated under rules adopted by the Personnel Commission, which allowed the utilization of "extra help" employees. During 2001 it was determined that utilization of extra help was, in part, inconsistent with merit district regulations; therefore, the Personnel Commission directed the District to transition out of the utilization of extra help by replacing these positions with permanent part-time, full-time, or limited-term employees. Due to the number of classified positions affected and the significantly greater cost of permanent employees, it was originally projected that the transition from extra help to a more-permanent classified employment force would cost approximately $6.5 million in categorical and noncategorical monies. Because it was simply economically unfeasible to make this magnitude of a transition in one year, both in the labor force and available dollars, the District and Personnel Commission agreed to implement a three-year transition plan in compliance with Merit System regulations. After several poor budget years the District is finally able to implement the third and final year of the transition plan with the 2006-07 budget.
2006-07 Goals
Following are the goals established by SCCCD for the 2006-07 fiscal year and the significant changes included in the Tentative Budget:
- Fund current, permanent academic and classified employees.
- Continue to evaluate and increase classroom efficiencies (students per full-time faculty [WSCH/FTEF]).
- Continue the Accreditation Self-Study process for both Fresno City College and Reedley College (Reedley College includes the North Centers).
- Present an Accreditation Self-Study update that will remove Fresno City College from the accreditation warning category.
- Continue to implement and monitor the current District Strategic Plan. The District will also develop and implement a continuous strategic planning process to maintain a rolling three- year development, evaluation, and review process for establishing District/College/Center direction.
- Complete the construction project for the new classroom building at Reedley College scheduled for opening in the summer of 2006.
- Continue the planning and development of schematic and construction documents for the Modernization Project(s) at Reedley College. The first projects are scheduled to be under construction in 2006-07.
- Continue the implementation of a Capital Facilities Program for the $161 million in funds from the successful passage of a General Obligation Bond (Measure E) in November 2002. The District has thus far had two bond issuances for a total of $45 million. A third issuance will be required in the spring of 2007.
- Implement the Accountability Report for Community Colleges (ARCC) as prescribed by the State Chancellor’s Office (AB 1417).
- Manage the Willow/International Phase I construction program, including off-site coordination with the Clovis Unified School District and the City of Fresno and the on-site Phase I buildings and parking facilities (including development of the Child Development Center and the food service/ bookstore building). Phase I is scheduled for completion during the spring and summer of 2007.
- Continue the development of working drawings for Willow/International Phase II. This project is dependent upon the passage of the statewide bond issue on the ballot for November 2006.
- Complete the last phase of the FCC Applied Technology Modernization scheduled for completion in the summer of 2006.
- Continue to evaluate and modify as needed the District’s diversity programs, including staff development and recruitment.
- Begin the implementation of the Capital Campaign for the Old Administration Building (OAB) construction project.
- Complete and obtain Division of State Architect approval of construction documents for the OAB.
- Design and obtain DSA approval for health fitness facilities and an occupational shop facility at the Madera Center.
- Review programs/services/outcomes and modify/update the following areas as necessary for each College and Center:
- Career and Occupational Education
- Transfers and Degrees
- Enrollment Management
- Shared Governance Procedures
- Business Outreach
2006-07
Budget Summary
The May Revise provided a major increase in funding for the California Community College System. A significant increase in State revenues and the settlement of the CTA lawsuit against the Governor contributed to the increase in funding for community college districts. The System benefits from the increase in Proposition 98 funding in the following manner:
- one-time allocation of funds for fiscal year 2006-07 of approximately $298.3 million;
- an increase in the 2006-07 Proposition 98 base of over $900 million, including one-time and on-going funds;
- a "settle-up" agreement over a seven-year period starting in 2007-08, paid in installments that add up to approximately $3 billion;
- the System's share of Proposition 98 funds estimated to be 10.7%; and
- full funding of equalization with the implementation of a new System funding model.
The Governor and Legislature continue to demonstrate a commitment to public education and the California Community College System in the State Budget Act. There is also continued commitment demonstrated for other important programs, such as DSP&S, EOP&S, and Matriculation by including funding for COLA and statutory growth in these programs. State Center Community College District has been successful in maintaining its financial stability and integrity and will continue to do so.
With a General Fund budget of approximately $156.2 million and a total budget in excess of $265 million, including $58.3 million in capital expenditures (capital outlays and Measure E projects), the District recognizes the importance of its role as a shareholder in the educational opportunities of its various constituency groups. The District further recognizes the importance of assisting the communities in the economic development needed to provide employment opportunities and prosperity for the region.
As you review the District's budget documents, you will see that all funds proposed are balanced and that the District has positioned itself to continue to offer quality programs and services. As Chancellor for the State Center Community College District, I am pleased to present the District's 2006-07 Final Budget document, which I believe is educationally and fiscally responsible to our constituents and to you, the taxpayers.
Thomas A. Crow
Chancellor
State Center Community College District
chancellor@scccd.edu
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