Adopted Budget 2011-12 Adopted Budget 2011-12 August 22, 2011 1

Adopted Budget2011-12

August 22, 2011

1

Overview

State Budget Overview

Board Goals

BAC Planning Assumption Highlights

FTES History and Projection

List of All District Funds – Expenditures & Other Outgo

Expenditure Reductions

Adopted Budget

2011-12

August 22, 2011

2

Overview (continued)

Unrestricted General Fund Details

Overall Summary

Revenue Summary

Major Revenue Changes in 2011-12

Expenditure Summary

Major Expenditure Changes in 2011-12

Reserves

Breakdown between Fixed and Discretionary Budgets

8-Year Trends

Future Budget Challenges3

Adopted Budget

2011-12

August 22, 2011

State Budget Overview

Zero COLA (0%)

No growth funding

Student fees increased $10 to $36 per unit

$290 million net reduction to apportionment

$5.9 million cut to Long Beach City College

No restoration of 2009-10 categorical fund cuts

Increased deferrals $129 million to $961 million - $24.6 million for LBCC

Issued Tax Revenue Anticipation Notes (TRANS)4

Adopted Budget

2011-12

August 22, 2011

Board GoalMeasure & Improve Fiscal & Infrastructure Stability

Commitment to Reduce Deficit Spending

$8,141,755 deficit spending to maintain service levels to students

$4,643,566 million surplus for 2010-11

Maintain 5.0% General Fund Reserve

Total reserves equal $10,003,926 (9.1%)

5% reserve $5,491,729

5

Adopted Budget

2011-12

August 22, 2011

Board GoalMeasure & Improve Fiscal & Infrastructure Stability (continued)

Focus on Advancement of Student Success Plan

$2,134,717 Unrestricted General Fund

$713,177 Restricted General Fund

Reserve to fund campus maintenance & IT functions

$225,213 budgeted reserve in the Unrestricted General Fund (carried over from prior year) for Technology Master Plan

6

Adopted Budget

2011-12

August 22, 2011

BAC Planning AssumptionHighlights

There will be budget redirections and potential reductions in response to both the State’s budget impact and the priorities as identified by the College Planning Committee (CPC)

Maintain a 5.0% unrestricted reserve for contingencies

Deficit spending will be minimized

Carryover will only exist for the Technology Master Plan and Facilities Improvement Funds.

7

Adopted Budget

2011-12

August 22, 2011

BAC Planning Assumption Highlights (Continued)

Zero (0%) COLA is budgeted

No Growth is budgeted. Target FTES is 19,618

A 1% deficit factor will be included to offset possible short fall from apportionment revenues.

Load Banking Reserve

Budgeted the $2.3 million liability

Vacation Liability Reserve

Budgeted $330,125 liability

8

Adopted Budget

2011-12

August 22, 2011

BAC Planning Assumption Highlights (Continued)

Benefit costs continue to increase:

Health and welfare costs increased by $1.3 millionOffset by plan changes and increased employee contributions

PERS rate increased 0.2%

SUI increased 0.9%

Workers’ Compensation increased 0.06%

Part-time hourly budget will contain sufficient dollars to meet the FTES target in accordance with class schedules

9

Adopted Budget

2011-12

August 22, 2011

20,923

18,806

21,268

21,499 21,499

20,457

20,931

19,618

30

705105

17,000

17,500

18,000

18,500

19,000

19,500

20,000

20,500

21,000

21,500

22,000

04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12

Unfunded FTES

Funded FTES

10

FTES History and Projection

Total21,529

Total21,162

BudgetAnnualTotal

21,036

List of Funds – Expenditures & Other Outgo (in millions)

11


UnauditedActual

2010-11

AdoptedBudget 2011-12

Unrestricted General Fund $ 109.8 $ 104.5 $ 109.8

Restricted General Fund 18.2 21.5 20.4

Capital Projects Fund 11.2 5.1 7.6Child & Adult Development Fund 1.6 1.4 1.6

Contract/Community Education Fund 0.7 0.4 0.7

General Obligation Bond Funds 472.7 56.8 461.3

Retiree Benefits Fund 2.3 2.2 2.4Self-Insurance Fund 1.0 0.9 1.0Student Financial Aid 50.9 54.5 56.8Vet Stadium Operations 1.0 1.0 1.2

Total $ 669.4 $ 248.3 $ 662.8

Expenditure Reductions - $5.5 Million

Management Team Furloughs of 3.08% - $339,000

Management Team Evening dean duties continue - $86,000

Health benefit plan changes and employee contribution increases:

Faculty $543,000

Classified $573,000

Management $210,000

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Adopted Budget

2011-12

August 22, 2011

Expenditure Reductions - $5.5 Million (continued)

Classified reduction in force and reorganization - $1,563,000

Management reduction in force and reorganization - $760,000

Suspending three sports - $74,000

Reduction to part-time faculty - $500,000

Cut discretionary budgets approximately 20% - $887,000

13

Adopted Budget

2011-12

August 22, 2011

Unrestricted General FundOverall Summary

14

UnauditedActual

2010-11


Change Increase/

(Decrease)

Revenues and Other Financing Sources

$ 109,145,155 $ 101,692,834 $ (7,452,321)

Expenditures and Other Outgo 104,501,589 109,834,589 5,333,000

Surplus/(Deficit) 4,643,566 (8,141,755) (12,785,321)

Fund Balance $ 18,145,681 $ 10,003,926 $ (8,141,755)

Unrestricted General Fund Revenue Summary

15

UnauditedActual

2010-11


Change Increase/

(Decrease)

Federal $ 120,349 $ 120,000 $ (349)

Apportionment 101,226,573 94,856,819 (6,369,754)

Other State 3,955,133 3,107,386 (847,747)

Local 2,520,232 2,524,920 4,688

Other Sources 1,322,868 1,083,709 (239,159)

Total $109,145,155 $101,692,834 $(7,452,321)

Major Revenue Changesin 2011-12

Apportionment - $6.4 million decrease includes a $5.9 million decrease in current year apportionment due to reduced FTES targets caused by state funding reductions and a $0.5 million decrease due to prior year apportionment revenue in 2010-11.

Other State Revenues - $0.8 million decrease consists mainly of decreases in mandated cost reimbursements since future funding is uncertain and a decrease in lottery revenue due to reduced FTES targets.

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Adopted Budget

2011-12

August 22, 2011

Unrestricted General Fund Expenditure Summary

17

UnauditedActual

2010-11

Adopted Budget 2011-12

Change Increase/

(Decrease)

Academic Salaries $ 43,743,146 $ 44,889,737 $ 1,146,591

Classified Salaries 23,614,430 24,992,138 1,377,708

Benefits 24,940,372 25,680,115 739,743

Supplies 457,915 603,475 145,560

Services 8,783,261 10,625,906 1,842,645

Capital Outlay 545,242 515,595 (29,647)

Other Outgo 2,417,223 2,527,623 110,400

Total $ 104,501,589 $109,834,589 $ 5,333,000

Major Expenditure Changesin 2011-12

Academic Salaries – overall $1.1 million increase is due to hiring 15 new faculty, and the expiration of the 2.3075% furlough. Administrator salaries decreased ≈ $300,000.

Classified Salaries - $1.4 million increase is due to the reduction of management furloughs (3.08%) and expiration of classified furloughs (5.77%) and step freeze less the classified and management reduction in force and reorganization.

Benefits - $0.7 million increase mainly due to salary and rate increases. Health insurance increases were offset by plan changes and increased employee contributions. 18

Adopted Budget

2011-12

August 22, 2011

Major Expenditure Changesin 2011-12 (continued)

Services – overall $1.8 million increase primarily due to rollover budgets and cost conscious measures during 2010-11 by all departments. Major increase related to Election Costs estimated at $450,000

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Adopted Budget

2011-12

August 22, 2011

20

Salaries & Benefits 87.0%

Unrestricted General Fund Budgeted Expenditures 2011-12

Academic Salaries, 40.9%

Classified Salaries, 22.7%

Benefits, 23.4%

Supplies; 0.5%

Services; 9.7%

Capital Outlay; 0.5%Other Outgo; 2.3%

Unrestricted General Fund Reserves

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Adopted Budget

Unassigned Reserves

Board Mandated Reserve – 5.0% $ 5,491,729

Economic Uncertainties 1,692,433

Assigned Reserves

Technology Master Plan 225,213

Vacation and Load Banking Reserve 2,594,551

Total $ 10,003,926

Unrestricted General Fund Breakdown Between Fixed & Discretionary Budgets


Percentage of Total Adopted

Budget

Fixed Costs:

Academic Salaries $27,622,830 25.15% Academic Administrator Salaries 3,603,101 3.28% Manager/Supervisor Salaries 5,232,895 4.77% Confidential Salaries 1,135,995 1.03% Classified Salaries 17,897,538 16.30% Benefits 25,680,115 23.38%

Total Salary & Benefit Costs $81,172,474 73.91%

Other Fixed Costs: Professional Services (LBPD) $2,842,845 2.59% Material Fees 86,802 0.08% Software & Online Software Licensing 832,086 0.76% Contracts for Higher One, Actuarial Study, etc. 59,550 0.05% AQMD Fees 35,000 0.03% Utilities 2,694,881 2.45%

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Adopted Budget

2011-12

August 22, 2011

Unrestricted General Fund Breakdown Between Fixed & Discretionary Budgets (cont.)

Adopted Budget

2011-12Percentage of Total

Adopted Budget

Other Fixed Costs: Copier Maintenance 72,000 0.07% Building Maintenance 387,334 0.35% Rental 133,331 0.12% LACOE Contracts 49,054 0.05% Environmental Health Fees 930 0.00% Election 450,000 0.41% Audit, TRANs & Legal Services 666,330 0.61% Student Services Credit Card Fees 200,000 0.18% Instructional Services (Police & Fire Science) 415,000 0.38%

Lease/Purchase 256,000 0.23% Interfund Transfer Out (Required Match) 1,562,252 1.42%

Total Other Fixed Costs $10,743,395 9.78%

Total Fixed Costs $91,915,869 83.69%

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Adopted Budget

2011-12

August 22, 2011


Percentage of Total Adopted Budget

Discretionary Costs: Academic Hourly Salaries $ 13,663,806 12.44% Classified Hourly Salaries 725,710 0.66%

Total Hourly Salaries $14,389,516 13.10%

Other Supplies $437,438 0.40% Fuel 59,440 0.05% Professional Services 527,550 0.48% Travel & Conference 142,910 0.13% Staff Development 20,853 0.02% Dues & Memberships 149,243 0.14% Equipment Repairs 245,945 0.22% Postage 151,127 0.14% Other Services & Expenses 542,937 0.49% Capital Outlay 221,797 0.20% Other Discretionary Costs 64,593 0.06% Interfund Transfers Out – Other 965,371 0.88%

Total All Other Discretionary Costs 3,529,204 3.21%Total Discretionary Costs $17,918,720 16.31%

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Unrestricted General Fund Breakdown Between Fixed & Discretionary Budgets (cont.)

Adopted Budget

2011-12

August 22, 2011


(Summary)


Percentage of Total Adopted Budget

Fixed Costs: Academic Salaries $31,225,931 28.43% Classified Salaries 24,266,428 22.10% Benefits 25,680,115 23.38% Other Fixed Costs 10,743,395 9.78%

Total Fixed Costs $91,915,869 83.69%

Discretionary Costs: Discretionary Hourly Salaries $14,389,516 13.10% Other Discretionary Costs 3,529,204 3.21%

Total Discretionary Costs $17,918,720 16.31%

Total Expenditures $109,834,589 100.00%

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Adopted Budget

2011-12

August 22, 2011


(Summary Multiyear Comparison – Total Costs)




Fixed Costs: Academic Salaries $32,702,246 $30,805,108 $31,225,931 Classified Salaries 24,959,575 23,623,469 24,266,428 Benefits 24,055,863 25,517,818 25,680,115 Total Other Fixed Costs 11,615,744 11,170,226 10,743,395

Total Fixed Costs $93,333,428 $91,116,621 $91,915,86982.40% 82.99% 83.69%

Discretionary Costs: Discretionary Hourly Salaries $15,253,912 $15,095,267 $14,389,516 Other Discretionary Costs 4,678,078 3,575,267 3,529,204

Total Discretionary Costs $19,931,990 $18,670,534 $17,918,72017.60% 17.01% 16.31%

Total Expenditures $113,265,418 $109,787,155 $109,834,589

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Adopted Budget

2011-12

August 22, 2011

27

04-05 Actual

05-06 Actual

06-07 Actual

07-08 Actual

08-09 Actual

09-10Actual

10-11Unaudited

Actual

11-12Adopted Budget

Salaries & Benefits as a % of Total Expenses & Other Outgo 83.8% 84.7% 85.5% 85.2% 86.7% 87.7% 88.3% 87.0%

Surplus / (Deficit) $3.3 $1.2 $7.5 $1.3 ($0.1) ($1.2) $4.6 ($8.1)

Ending Balance $4.9 $6.1 $13.6 $14.9 $14.7 $13.5 $18.1 $10.0Ending Balance as a % of Total Expenses & Other Outgo

5.5% 6.4% 12.9% 13.3% 13.1% 12.4% 17.4% 9.1%

Unrestricted General Fund 8-Year Trend Summary (in millions)

Unrestricted General Fund 8-Year TrendSalaries & Benefits as a % of

Total Expenditures & Other Outgo

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83.8%84.7%

85.5% 85.2%

86.7%87.7%

Unaudited Actual88.3% Budget

87.0%

81.0%82.0%83.0%84.0%85.0%86.0%87.0%88.0%89.0%

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

$3.3 $1.2

$7.5

$1.3

($0.1) ($1.2)

$4.6

($8.1)

$4.9$6.1

$13.6 $14.9 $14.7$13.5

$18.1

$10.0

-10

-5

0

5

10

15

20

04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 Budget

Surplus/(Deficit) Ending Fund Balance

Unrestricted General Fund 8-Year Trend Ending Fund Balance and Surplus/(Deficit)

29

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Adopted Budget

2011-12

August 22, 2011

State Revenue Shortfall Mid-Year Spending Reductions

Less than $1 billion below forecast No changes

$1 - $2 billion below forecast $23 million cut to child care$30 million cut to apportionment - $566,180 LBCC share$10 additional enrollment fee increase to $46/unit

Greater than $2 billion below forecast

$ 72 million additional cut to apportionment - $1,358,831 LBCC share

Future Budget Challenges Mid-Year cuts appear likely based on current economic forecasts – as of July State revenues down $540 million

Future Budget Challenges (cont.)

Cash flow concerns – State continues to increase apportionment deferrals

At June 30, 2011 our cash balance in the Unrestricted General Fund was $936,495 after borrowing $7.5 million from ourselves

Fee Shortage – increased BOGG waivers are reducing collections state-wide

Chancellor’s Office already estimating a $25 million (~ 0.4%) shortfall - $432,000 LBCC share

Recovery appears slower than projected

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Adopted Budget

2011-12

August 22, 2011

Future Budget Challenges (cont.)

State Litigation

Redevelopment Agencies – contesting $1.7 billion payments to state with the Supreme Court

Medi-Cal Providers – going to court to contest proposed changes ($1.3 billion)

Amazon Tax - going to court to try to stop ($0.2 billion)

State’s structural budget deficit projected into 2015-16

Full-time faculty obligation (FON) – once the Board of Governors lifts the obligation suspension, LBCC will need to hire a significant number of full-time faculty

32

Adopted Budget

2011-12

August 22, 2011

Questions?

33

Adopted Budget

2011-12

August 22, 2011

Documents

Adopted Budget 2011-12 Adopted Budget 2011-12 August 22, 2011 1