2005-2006 ADOPTED BUDGET Public Hearing August 29, 2005

1
2005-2006 ADOPTED BUDGETPublic HearingAugust
29, 2005

• Mike Brandy, Vice Chancellor, Business
• Bernata Slater, Director, Budget Operations

2
Major Changes in Assumptions from Tentative to
Adopted Budget

• Tentative Budget Assumptions
• STRS increased by 900,000
• Equalization increased by 1,700,000
• Enrollment estimated at 32,022 FTES
• PERS rate set at 9.9

• Adopted Budget Assumptions
• No increase to STRS expense
• Equalization set at 1,200,000
• Enrollment set at 31,333 FTES
• PERS rate set at 9.1 (expense reduction of
  240,000)
• Increased Interest Revenue by 450,000
• Increased Lottery Revenue by 275,000

3
Review of 6/30/05 Ending Balance

• The 6/30/05 ending balance is 15,752,953, which
  will be used as follows
• 7,870,000 to maintain district 04/05 budgeted 5
  reserves
• 3,426,525 for college/central services carryover
• 421,037 for encumbrances carryover
• 422,381 for districtwide carryover (negotiated
  contract items, election expense, etc.)
• Undesignated 04/05 ending balance 3,613,010

4
Where are we now for 05-06?

• Current Expenses vs. Current Income
• Income 157,738,384
• Expenses 155,855,807
• Difference 1,882,577
• Add One-time transfer in From Medical Benefits
  Fund (Fund 61) 850,000
• Total Difference2,732,577

5
Major Revenue Assumptions

• State Revenues
• Cost of Living Adjustment from the State
  increased revenue 5.5M
• Equalization funding increased revenue 1.2M
• Partnership for Excellence funds restored by
  972,000
• Enrollment has been forecast to assume we will
  restore 1 of our FTES in 05-06 to a level of
  34,319
• Mandated Cost Reimbursement 0

6
Chart on Foothill-De Anza Enrollment
7
Chart on FHDA Productivity
8
Analysis of FTES
9
Health Benefit Plans

• Through the efforts of the Benefits Task Force
  and the bargaining units, substantive changes
  were made to the medical and prescription drug
  plans to reduce expected increases in 04-05. The
  plan changes and enrollment migrations of staff
  to new plans contributed to a lower than expected
  claims experience in FY 04/05. A saving of 3.8M
  has been realized due to lower claims experience
  (primarily in the retirees category). There were
  additional one time savings achieved from vacant
  positions, a credit from Kaiser for prepaid
  expenses and a decreae to our future claims
  reserve (IBNR). However
• Active and retiree employer costs will increase
  in spite of plan changes due to a Kaiser rate
  increase (19) and PPO trend projections increase
  (12)
• For the 05-06 year, we are recommending to offset
  the increases in Kaiser and the self insured plan
  (850,000) with one-time savings from the 04-05
  fiscal year.

10
FY 05/06 Ending Balance Analysis
11
Significant New Expense Items Budgeted in 05/06

• 400,000 has been set aside in personnel growth
  to fund 6 new classified positions in 05/06 from
  additional apportionment received in 04/05 from
  the state as Maintenance and Operation Growth
  Funds
• 640,000 budgeted to partially fund the unfunded
  retiree medical liability

12
Risk Factors on Expense and Revenue Projections

• Enrollment Recovery
• Benefit Projections
• Productivity
• Restoration of Base