Diablo Valley College was projecting a $2.9 million deficit for the ‘11-‘12 fiscal year, but currently the state is projecting a much higher deficit of $5.2 million for the same time frame.
In addition to the $2.9 million deficit for the ‘11-‘12 fiscal year, the long-term budget projection at the state is not good. Currently, projections indicate that:
DVC will not receive any money for cost of living adjustment or growth until 2013-2014.
DVC may not return to 2007-2008 funding levels until 2015-2016.
Lastly, over the next five years community colleges could face reductions between 9.6% and 19.3%.
On top of the gloomy news from the state, the college will face about $2 million per year in cost increases due to salary schedule adjustments, employee benefit increase, and increases in district assessments due to inflation.
This situation was explained at the College Council meeting on Feb. 28th, the college council committee headed by Dennis Franco delivered the following summary.
The Diablo Valley College Budget Committee developed a plan last November for the annual budget.
The committee then forwarded its recommendation budget plan to the College Council. The College Council then makes a recommendation to the college president who makes the final resource allocation decisions.
The debt is continuing to grow as the state goes through its budget development process.
But DVC currently only has a reserve for the current fiscal year at the ‘09-‘10 fiscal year statistics.
DVC is now responsible for the load bank and vacation liabilities of their employees.
The load banking reserve is a reserve of funds for teachers who are taking on extra classes.
While the district has accepted the responsibility for the liabilities as of June 30, 2010, they have very little funds designated to pay these debts.
The total of the reserves is nearly $323,000.
This is much lower then needed now because DVC’s share of these debts was approximately $5 million for the load banking and $1.8 million for the vacation pay.
However, the budget committee still recommends using uncommitted carryover funds to establish a $50,000 reserve to repair and replace broken equipment and to use more then $624,000 to augment the college’s emergency reserve.
DVC is still projecting for a $2.9 million deficit for the ‘11-‘12 fiscal year, and assuming that all of the $624,000 in obligated funds would be used to help cover the 11-12′ deficit. The deficit consists of the following three components:
-Structural deficit of $1.9 million, this component includes projected cost increases for ‘11-‘12 offset by any anticipated revenues increases.
-State apportionment revenue reduction of $1.6 million, this component consists of any anticipated state apportionment revenue changes from ‘10-‘11 midyear reductions and ‘11-‘12 apportionment estimates.
-Sources and uses of one time funds, $624,000 available,.This component consists of all anticipated sources and uses of one time funds that impact the ‘11-‘12 budget.
