Tuesday, June 27, 2006

Discussion of the SOCCCD tentative budget

I finally reviewed my somewhat fragmentary tape of the Item 34 discussion at Monday’s SOCCCD board meeting. Here are my notes. Please bear in mind that on a scale of 1 to 10, I'm about a "2" in understanding budget and finance issues. (Or maybe a -2.) I do hope I didn't get anything wrong. Remember that the SOCCCD board meeting is broadcast on TV.

Item 34: Fiscal Year 2006-7 Tentative Budget

Chancellor Mathur kicked things off. He stated that budgets will be “tight” for 2006-07. It is possible, he said, that the 07-08 budgets will be tighter still. He “reminded” everyone that they need to exercise “restraint and discipline” in managing our finances. He warned that we cannot continue to rely on Basic Aid dollars to deal with “all needs.” He has asked his executives to be “more frugal” during 06-07.

Vice Chancellor Poertner—who had primary responsible in presenting the tentative budget—then explained the expenditure reductions of the district and the two colleges. These have been successful, he said, but IVC continues to be in the red, with a “budget hole of $1.5 million.” To balance its budget temporarily, IVC took money from the part-time faculty budget. Poertner explained possible “resolutions” to that deficit. “Deferred maintenance” is a likely solution.

In the course of his presentation, Poertner displayed several slides, including one that said:

The colleges cannot continue to reduce expenditures to the extent needed without adversely affecting course offerings because of

• faculty staffing obligations imposed by the state
• Obligations under negotiated employee contracts.

The colleges will need to significantly increase enrollment to generate PBF Revenue in order to eliminate dependence on “basic aid.”

It will take time to return to the principle of “no basic aid” for ongoing expenditures.

After Poertner’s presentation, trustees asked questions. In the course of his questioning, trustee Fuentes asked that Poertner’s “slide 10” be displayed again. It said:

Retiree Benefits Liability

New Actuarial Study in May 2006

Unfunded liability is $37 M

2006-07 Contribution to the obligation is $4.6 M

• Existing employees = 3M
• Past services = 1.6 M
• Funded with Basic Aid

Fuentes seemed to want a more detailed explanation of how we plan or hope to deal with the “unfunded liability” problem. Poertner explained that our district is among the leaders in the state in addressing this problem. Evidently, we’re addressing it aggressively, at least in comparison with other districts.

At one point, there was this exchange:

FUENTES: Are you aware, are there any districts in the state who have or who utilize new COLA increase revenue to set aside to work on this?

POERTNER: …I would doubt that they identify a percentage of COLA… –that they would just take a certain part of money that comes in with their COLA and apply that.

2 comments:

Anonymous said...

We are among the wealthiest community colleges in the state. What in the hell are Mathur and Fuentes talking about? And we have a one-time state fix that will aid all community colleges this coming year--equalization monies.

Anonymous said...

This year, the Community Colleges will get more money than anytime in their existance. Equalization alone will result in many millions.

This story about the unfunded liability is just that, a scare tactic. The new GASB accounting procedures do not require this liability to be funded but that it be listed on the books. Boards up and down the state are pulling this out of their _____ (some oriface) and trying to use it to take away the coming COLA of 5.9%.

Roy's obituary in LA Times and Register: "we were lucky to have you while we did"

  This ran in the Sunday December 24, 2023 edition of the Los Angeles Times and the Orange County Register : July 14, 1955 - November 20, 2...