California Community Colleges System Office

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California Community Colleges System Office

• 2008-09 Statewide BudgetWorkshop
• Los Angeles Valley Cosumnes RiverComm.
  College Comm. College
• 10/06/2008 10/09/2008

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2008-09 Statewide Budget Workshop Agenda

• 2007-08 Highlights
• Restoration
• Outside Factors Property Taxes Backfill
• Advance Apportionment Exhibits

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2007-08 Highlights

• Property tax backfill payment Pages 3-4
• Final payment will be reflected at final
  recalculation
• P2 property tax backfill 92 million
• 07-08 shortfall likely to increase

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2007-08 Highlights Cont.(Annual FTES)

• 2007-08 Growth 131.8 million
• Annual FTES increased 5,259 over P2
• System unfunded amount equals 52.8 million or
  12,500 FTES 2,800 over P2

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Restoration Picture

• Pages 5-6 identify districts with outstanding
  restoration for the prior three years
• 96 million system restoration available
• 31 million available in Advance for restoration

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Growth in 2008-09

• 2 growth or 113.5 million for statewide growth
• High likelihood of unfunded again
• District growth rates shown on Page 7

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Statewide Summary - Growth

• Growth Appropriations Provided by the State
• Median Rate 3 Average Rate 2.56
• 2008-09 2.0 113.5 million
• 2007-08 2.0 97.532
• 2006-07 2.0 97.5
• 2005-06 3.0 136.7
• 2004-05 3.0 121. 11
• 2003-04 1.5 57.9
• 2002-03 3.0 114.3
• 2001-02 3.0 106.8
• 2000-01 3.5 116.3
• 1 Plus 27 M for over cap FTES

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Other Issues of Note

• Re-Development Agency (RDA) Changes
• SCO audit found widespread reporting errors by
  various parties
• AB 1389, a budget trailer bill, aims to correct
  inaccurate reporting that occurred between
  2003-04 and 2007-08

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RDA Changes (Cont.)

• County assessors will work with RDAs, schools,
  and colleges to reconcile payments and identify
  errors that occurred between 2003-04 and 2007-08
• Corrected data will be used to adjust payments
• Some districts will get additional RDA
  pass-through revenues

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RDA Changes (Cont.)

• Districts that did not correctly report RDA funds
  as an offset to apportionments will be required
  to repay excess payments
• Repayments will occur over a period not to exceed
  five years
• SB 360 would have modified future RDA reporting.
  The bill was vetoed.

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Statewide Summary -Last Year-

• 2007-08 A Year of Economic Turnaround?
• As of the 2007-08 Second Principal (P2)
  Apportionment
• Reported Growth (48 of 72) 113.9
  millionFunded Growth 70.6 millionUnfunded
  Growth 42.1 million
• Stability 46.5 million (12 of 72)
• Restoration 65.4 million (29 of 72)
• Property Tax Shortfall estimate 92 million

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Exhibits 2008-09 Growth Rates

• Input Components
• Adult Population Change
• High School Graduation Rate Change
• Blended Rate
• Minimum of 1 percent or 100 FTES
• New Facilities FTES Coming on Line Adjustment
• Underserved Areas factor

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Advance Growth Rates Revised

• The preliminary growth rates distributed to
  districts September 19th have been updated to
  fully reflect the 0.68 COLA.
• District Impacts
• Growth Revenue Caps approx. 99.96 of the
  preliminary value
• Growth rates are 99.3 of the preliminary value

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Growth Funding Priorities What When?

• Full basic allocation funding has priority in the
  use of the budgeted growth appropriation.
• This priority applies only if the budgeted base
  funding appropriation is insufficient to fund the
  existing basic allocation entitlement.
• Basic allocation includes newly accredited
  colleges or State approved centers (1,000 FTES
  annually). Newly accredited colleges or
  State-Approved centers will be funded from
  appropriated growth funding.

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Stability Restoration

• Education Code section 84750.5(d)(6)(B)
• Decreases in FTES and its associated revenue
  shall result in revenue reductions in the year
  following the year of the initial decrease.
• Education Code section 84750.5(d)(6)(C)
• Districts are entitled to restore reductions in
  apportionment revenue due to decreases in FTES
  during the three years following the initial year
  of decrease if there is a subsequent increase in
  FTES.

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2008-09 Advance Funding Assumptions

• Restoration Assumptions
• If total restoration eligibility is 1 or less of
  a districts total base revenue, all eligible
  restoration is certified for Advance funding. (3
  of 69).
• If total restoration eligibility is greater than
  1 of a districts base revenue, 34 of total
  eligible restoration was certified for Advance
  funding. (19 of 69).
• Restoration allocations were adjusted to remain
  within the systems State budget appropriation.

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Funding Assumptions for the Advance

• Growth Assumptions
• If prior year unrestored restoration is 1 or
  less of a districts base revenue, 70 of
  allowable growth based on its constrained growth
  rate was certified (17 districts).
• If prior year unrestored restoration is more than
  1 of base, 50 of its allowable growth based on
  the constrained growth rate was certified (8
  districts).
• For districts without unrestored restoration,
  100 of their allowable growth based on the
  constrained rates was certified (47 districts).

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2008-09 Advance Restoration

• The dollar value of any existing unrestored
  decline in FTES is restored at the current growth
  funding rates when the value of actual FTES
  exceeds base FTES on a district basis.
• The above calculation allows districts to restore
  equal FTES revenue-generating capacity as were
  lost in any decline that occurred in the previous
  three years.

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Deferrals are Alive and Well on Planet Earth!

• JanuaryMarch 09 Deferral (NEW) 245 million
  will be deferred from January through March to be
  repaid in April through June 2009. The January
  allocation percentage was reduced from 8 to
  5.5.
• The 200 million deferral is ongoing and will
  impact the April through June 2009 general
  apportionment allocations. This deferral will be
  repaid in the first monthly apportionment of the
  subsequent fiscal year.
• A Cash Management Working Group is currently
  reviewing cash flow as it relates to K-14
  apportionment.

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Advance General Apportionment

• Advance apportionment allocations
• Base entitlement includes the basic allocation
  and restoration from the prior year. Base revenue
  components begin on page 11
• Funded Growth 112.3 million was certified at
  the Advance.
• Funded Restoration 24.0 million

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Center Categories for Apportionment

• State Approved Centers Previously approved
  California Postsecondary Education Commission
  (CPEC) Centers.
• Grandfathered Centers Centers not meeting
  current CPEC standards as of July 1, 2006, but
  grandfathered or previously approved by CPEC.
• Centers not State Approved or grandfathered are
  not eligible for basic allocation funding until
  being recognized as State Approved centers.

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SB-1133 One-time Funds

• Proceeds of California Teachers Association, et
  al. v. Arnold Schwarzenegger see page 27
• 2008-09 10 million one-time block grant for
  one-time items of expenditure, including, but not
  limited to
• Physical plant, sch. maintenance, deferred
  maintenance special repairs
• Instructional equipment, materials library
  materials
• Technology infrastructure
• Hazardous substances abatement
• State mandated local programs

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State Career Technical Education (CTE)

• For community colleges to expand CTE in public
  secondary and lower division public higher
  education pursuant to Ed. Code 88532.
• Funding anomalies
• 84 of 2007-08 CTE is allocated through June
  2009
• 100 of 2006-07 CTE is allocated through June
  2009

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Physical Plant Instructional Support

• Appropriation divided into the following
• ONGOING FUNDS
• 13.673 million apportioned for Scheduled
  Maintenance
• 13.672 million apportioned for Instructional
  Equipment.
• 100,000 floor provided as minimum district
  support for each of these two apportionments.
• The final allocation will be certified based on
  the actual FTES reported for the 2007-08
  Recalculation. Exhibit D Prior Year
  Corrections and Adjustments will be included
  with the P1.

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Physical Plant Instructional Support (cont.)

• 13,673,000 is available for the following
• Scheduled maintenance Special Repairs
• Districts must certify increased OM spending
  above the 1995-96 level by the amount allocated
  for maintenance special repairs from this
  appropriation.
• A one-to-one local match is required.
• Hazardous substances abatement, cleanup,
  repairs
• Architectural barrier removal projects
• A one-to-one local match is required.
• Available for expenditure until June 30, 2010

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Physical Plant Instructional Support (cont.)

• 13,672,000 is available for replacement of
  instructional equipment and library materials
• A threeto-one State to local match is required
• These funds shall not be used for personal
  services or operating expenses
• Available for expenditure until June 30, 2010

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Basic Skills

• The Advance Basic Skills allocation was
  calculated using the P2 FTES inputs. The final
  2008-09 Basic Skills allocations will be computed
  using the updated 2007-08 final Basic Skills FTES
  amounts derived from the 2007-08 Recalculation.
• See page 20 for district allocations

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Miscellaneous Reminders

• 2007-08 Actual Enrollment Fee Revenue data report
  (September 15, 2008). We thank all the districts
  for their quick submission of the September 15th
  data.
• The Annual Financial and Budget Report (CCFS-311)
  is due to Fiscal Services by October 10th each
  fiscal year.

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Help Yourself in the States Budget Process

• System Office Request (we greatly appreciate your
  efforts in this area)
• The P2 FTES Report for the period ending April 15
  will be due on April 20, 2009. This data is
  critical for the system office to advocate for
  districts in the States budget process.
• Earlier data submission will allow the system
  office to prepare a mock P2 apportionment for use
  in State budget deliberations. We will also
  distribute it to the districts for their local
  use.

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Questions?