June 5, 2012
This is the first of a series of budget updates that you will be receiving over the summer.
The State budget and its ever-changing effects on our local budget are keeping us extremely busy.
- A budget workshop was presented to the Governing Board on May 23, 2012. That presentation is available to you on the SWC website homepage.
- A tentative balanced budget will be presented at the June 20, 2012 Governing Board meeting.
- Members of the Budget Committee continue to meet over the summer to hear the latest updates from state and local budget analysts as well as assist in forming plans of action for the district.
- Points of Clarification
The 5% salary reduction, which was negotiated last month, is not a permanent solution to our permanent loss of $5.6 million in revenue. It is a solution that has ongoing components and one-time components.
- The 2012-13 budget will reflect a $500,000 reduction in supplies accounts and a $1 million reduction in the part-time overload budget. These components seek to address an ongoing deficit and are consistent with our workload reduction; therefore, these cuts are ongoing until the college receives new funding. These ongoing deficit solutions were clearly articulated at the Big Table.
- $1 million of the 2011-12 reserve will be used, in addition to the 5% salary reduction, as a one-time reduction to address the remaining balance of the revenue shortfall.
- The $5.6 million overall deficit that these solutions address is ongoing. Therefore, the negotiated solution will not address the ongoing problem for more than one year. We must immediately begin new negotiations in the fall to address the ongoing deficit.
- New Developments
The $5.6 million deficit that we are seeking to remedy will most likely increase over the 2012-13 year.
- Funding that was to come to education from the disbandment of redevelopment agencies (RDAs) is not expected to be paid to community colleges in the near future. All California Community Colleges have been advised to plan on not receiving any RDA funds throughout this and next year. This translates to a $1.589 million hit to SWC for the 2011-12 year and an estimated $4.845 million hit for the 2012-13 year. These reductions are not accompanied by any workload reduction, meaning we must maintain the same amount of FTES for full apportionment funding, but do so with $6.4 million less.
- The Governor’s proposed tax initiative will allow the state to pay us more of our funding on time, rather than deferring funding into the new fiscal year. Currently the state owes the college $21 million for this year that it won’t pay us until after July—the new fiscal year. Passage of the tax initiative helps get us the money we need to continue operations without having to borrow money. However, it is important to note that passage of the initiative does not mean any new funding for colleges. Non-passage means an additional $4.26 million cut to the college. This cut would come with a workload reduction of 6.2%--or nearly 900 FTES less than our current target of approximately 14,000, assuming no workload reduction. We have currently planned for a 5.6% workload reduction, with the majority of the decrease planned for Spring 2013.
- Budget Committee Goals
The Budget Committee is pursuing two primary goals: decreasing cost and increasing revenues.
- The first goal is to finalize a cost-savings program. Some of the cost-saving strategies will be implemented immediately (we already have many buildings off line this summer on the Chula Vista campus to save on energy and maintenance costs). The full plan will be completed and distributed to all District employees with a comprehensive roll out this fall. An “office efficiency” plan is in the works as part of this cost-savings strategy. If you have cost-savings ideas, please communicate these to your constituency leaders.
- The second goal is to propose revenue-generating strategies. There are two primary areas under consideration: developing a plan to increase non-resident students, and creating a revenue generating plan using facility rentals.
Solidifying a budget with so many variables is a challenge. I commit to providing you updated information as it becomes available. Also continue to look on the college website for budget presentations. Finally, be involved. You are all invited to come and participate at the Governing Board meeting on June 20, 2012, where the tentative budget will be presented for board discussion and approval.
It is said that difficult times bring out the best in people. This is true if we can continue to work together and keep our students as the focus of what we do. This District is so strongly dedicated to our students that I have great hope we can bond together and face the hard decisions that lie ahead of us in a true spirit of cooperation.
A crew for A.O Reed Mechanical Contractors Inc. works on a storm drain for the Field House and Central Plan project near DeVore Stadium and Lot J.
Construction crews are tearing up parts of the campus this summer as part of a $90 million Proposition R investment. The most visible changes are the widening of the Gotham and Elmhurst entrances to the college. Still to come during Phase One, however, is a new field house at DeVore Stadium, two synthetic turf fields, a two-story facility at the National City Center and updated “Blue Light” campus security. There are technology upgrades to be funded by Proposition, including modernizing the computer network and wireless system as well as modernizing the district data center.
These construction projects are moving forward while the college updates the educational and facilities master plans. We are scheduled to hire a consultant this summer that will incorporate our educational priorities and align all current and future facilities to reflect those priorities, including the best use of the corner lot.
Tune in to the district website for Proposition R updates.
This summer we welcome three permanent vice presidents—Vice President for Human Resources Dr. Albert Román, Vice President for Academic Affairs Kathy Tyner and Vice President for Business and Financial Affairs Steven Crow. All three bring decades of experience in their fields.
Tyner is familiar to the Southwestern College Community, having served as dean and interim vice president on campus. She began her permanent assignment May 24.
Román is currently the Assistant Superintendent of Human Resources and Employee Relations at the 19,000-student Pajaro Valley Unified School District. He begins June 18.
Crow is the Vice President for Administrative and Information Services at the College of the Siskiyous. He begins July 1.