Monday, July 4, 2016

Awkward: discussion of IVC's budget at the June 27 meeting

IVC's Davit Khachatryan
     At the board meeting, a budget crisis was announced/explained (—a crisis especially concerning future budgets; the current budget is OK, owing to various ad hoc fixes). It is caused, evidently, by increased costs plus increased spending on salaries/benefits. Trustee Lang was annoyed: did we understand that the salary/benefits upgrades that we approved would yield this situation? Why then did we take those actions? Here's the exchange, verbatim:

     Lang to Davit K: [Following up on one of Marcia’s points:] I’m also very concerned about the fact that you are basically reflecting a budget that shows no capital outlay, no reserve for economic uncertainty—and I’m just wondering how we got there.
     Davit: The reserve for economic uncertainty for IVC historically has been about $1 million dollars. That’s been our internal college’s approach and policy… This year, in order to balance the budget, we had to eliminate that reserve to be able to balance it. …The salaries and benefits and income [undecipherable] we got…We were able to balance it without the reserve for economic uncertainties. In addition to that, we had a smaller amount of capital outlay, which was about $160,000, that we needed to zero out as well to balance it. It’s been a struggle this year. It’s been kind of a difficult task to do that. If you look at the budget message, we had to take some steps, make some assumptions to be able to balance it. It’s probably been one of the most challenging budget times for me since I started in 2004, 2006 at IVC.
Lang
     Lang: are you anticipating that you are presenting to us, hopefully, a very conservative picture that will ultimately be better when we have final budget numbers?
     Davit: I would say that this is a realistic budget. There may be some things that do change between now and the final budget–we’ll have to see what the state … budget has for us—there may be hopefully some positive surprises. The information that we have right now makes me believe that this is the most realistic budget we have as of right now. And we had to, for example, make assumptions about some salary savings. It happens every year, year after year, so we built in about $300,000 in savings into the budget, which is kind of unusual for the district, but I know that the state, that is a regular practice….
Fitzsimmons 
     Lang: OK. I’m not trying to put you in the hot seat, Davit, because this also applies to Carol [Hilton] as well, I think, and that is, did we know this would be the result when we went into [contract] negotiations this year? Did we know that this was going to be what, where we are at now?
     Davit: we have a five-year budget projection model, every time there’s new information that comes up we do a projection for the next five years. We monitor the effects of, if different decisions or news coming from the state or locally and we discuss it locally and present it to the president, and I think that information has been communicated as well.
     Lang: OK, ‘cause, I don’t remember that conversation. Thank you.
     Fitzsimons: we provided fiscal team’s recommendations on financial trends and provided that to the board during negotiations. Multiple times. And I can provide those memos again if you like.

     (For streaming video of the June 27 board meeting, click here. Then scroll down to the "video" button for the June 27 meeting. Click that. Then, at left, you can "jump" to any place in the meeting, e.g., item 6.1 [Tentative budgets].)

Access to streaming video of the June 27 board meeting

El Toro a century ago
     Someone has emailed me to provide a LINK that works for streaming video of the June 27 board meeting. Click here. Then scroll down to the "video" button for the June 27 meeting. Click that. Then, at left, you can "jump" to any place in the meeting—e.g., the discussion of item 6.1 (tentative budgets) or 4.2 (proposed stadium project).

Slide used during presentation of item 4.2 (Stadium project)

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