Mt. San Antonio College s1

Mt. San Antonio College Budget Committee Summary of September 4, 2013

Committee Members:

Mike Gregoryk, Chair Michelle Sampat Edmond Xiong (Student) Gary Nellesen (Guest) Rosa Royce Martin Ramey Karina Maureira (Student) Irene Malmgren Mark Fernandez Johnny Jauregui Kerry Martinez (Notes) Audrey Yamagata-Noji Richard McGowan Bill Scroggins (Guest)

ITEM DISCUSSION/COMMENTS ACTION/OUTCOME 1. Agenda Check The Budget Committee Agenda for September 4, 2013 was approved, as presented. Approved, as Because there are new members on the Budget Committee, everyone introduced presented. themselves. 2. Review Meeting The Budget Committee Meeting Summary of June 5, 2013, was approved, as presented. Approved, as Summary of June presented. 5, 2013 3. Proposed 2013-14 Rosa Royce reviewed the handout documents titled 2013-14 Adopted Budget Summary, Adopted Budget – Changes to Fund Balance from 2012-13 to 2013-14 Adopted Budget, Analysis of 2012-13 Rosa Royce Apportionment Deficit at P2, and 2013-14 Adopted Budget Unrestricted General Fund Balance. Rosa explained that the document titled Changes to the Fund Balance from 2012-13 to 2013-14 Adopted Budget is a summarized version of Page 17 in the 2013-14 Adopted Budget Summary which is very long and detailed. Rosa pointed out the variances in the summarized report. When the Tentative Budget was done, there was an estimated positive variance of $3.4 million. After closing the 2012-13 fiscal year, the actual positive variance ended up being $1.6 million. Rosa stated that one of the main reasons for the difference is the growth restoration amount which is calculated depending on what the annual FTES is. The growth restoration amount will change in February 2014 when the FTES is recalculated. Rosa stated her best guess is that Mt. SAC will be able to keep the growth restoration funding of $1.4 million. Other reasons for the differences are the statewide structural deficit which is estimated at 1%, and a $3.4 million deficit for the redevelopment agencies where the funds have not materialized. Rosa explained that there is a college-wide dispute that is currently happening with the Department of Finance. the Community College League of California, the Chancellor’s office, and all of the Colleges involved. They are all working together to correct this problem. The budget balances are another reason for the difference in the positive variance. Rosa stated that Mt. San Antonio College Budget Committee Summary of September 4, 2013 Page 2

the actual 2013-14 Fund Balance (Reserves) is $19.7 million or 13.14% which includes revenue-generated accounts, and the ongoing and one-time budget deficit. Rosa stated the College will not contribute to the OPEB Trust for retiree health benefits in 2013-14. She explained the growing liability of $6.5 million annually that could eventually affect the College’s credit rating. Mark Fernandez asked when an actuarial report will be completed and how much longer will the College be able to not make payments to the fund. Rosa said an actuarial report has just been completed. Richard McGowan explained, for the new Budget Committee members, the history of the OPEB Trust fund and the College’s decision to not make annual contributions. Rosa said the goal is to become self-funded. The current fund balance is approximately $70 million. The number needed to become self-funded is approximately $90 million. Richard asked if Rosa could provide a chart or schedule that shows the impact from year to year if the College continues the practice of not contributing to the OPEB Trust Fund, to be able to compare the difference of where we are supposed to be versus where we currently are.

Rosa explained the revenue-generated accounts in the Unrestricted General Fund and the Budget and Actuals Comparison History spreadsheets. Richard stated it would have been nice to have the financial documents to review all of these numbers prior to today’s meeting and suggested that these carry-over to the next meeting to be able to answer everyone’s questions after they have a chance to review the financial documents. Richard asked why the projected deficit for the 2013-14 is the greatest he’s ever seen at $8 million and notes that it is a huge jump from the actual deficit for the prior year. He stated that last year the forecast of a $6.9 million deficit was questionable and the College ended up with one-third of that number in actuality, now the forecast for 2013-14 is an even larger number. Rosa explained that the revenue-generated accounts are included in the $8 million projected deficit balance and pointed out the report with explanations of all of the variances. Richard stated that the numbers need to be more in line with reality if people are going to trust the numbers. Rosa explained the expense projections are very conservative. Richard stated the Budget Committee should have a discussion regarding the budget process and the part that causes unexpended funds to carry over to the following year. Richard suggested this discussion be added to the Agenda for the next meeting. 4. Review 2013-14 The Budget Committee members reviewed $175,000 in New Resources Requests for New Resources instructional materials that were funded with Lottery funds. There is a one-time fund Requests balance from the Lottery and Unrestricted General Funds of approximately $1 million that Allocation List will be brought back within the next three years to be used for instructional material expenses. Mt. San Antonio College Budget Committee Summary of September 4, 2013 Page 3

FUTURE AGENDA ITEMS:

 Continue Review of the Budget Review and Development Process  2013-14 Adopted Budget - Questions  OPEB Trust Year to Year Summary

FUTURE MEETING DATES:

 September 4, 2013  September 18, 2013  October 2, 2013