Unapproved Minutes
COLLEGE OF THE SEQUOIAS
BUDGET COMMITTEE MEETING SUMMARY
Thursday, February 16, 2012
Members Present: David Maciel (Co-Chair), Mike Skaff (Co-Chair), Lisa Brandis, Debbie Castro, Christina Enquist, William Garcia, Omar Gutierrez, Tim Hollabaugh, Robert Morris, Mary Schaeffer, William Garcia, Jordan Dean (representing Osvaldo Arroyo and Manuel Hernandez)
Exofficio: Doug Brinkley, Interim Vice President, Administrative Services
Leangela Miller-Hernandez, Dean, Fiscal Services
Linda McCauley, Chief Accounting Officer
Karen Pauls, Executive Assistant, Administrative Services
Absent: Matt Bourez, Brent Calvin, Dianna Favour, Chris Knox,
Steve Renton,
Guest: Gabriel Giannandrea
Minutes: Karen Pauls, Executive Assistant, Administrative Services
The Standing Budget Committee meeting was called to order by David Maciel at 3:00pm.
1. Approval of the October 20, 2011 Budget Committee Minutes
Motion to approve the minutes of the October 20, 2011 meeting was made by Debbie Castro and seconded by Omar Gutierrez. David Maciel and William Garcia abstained from voting.
2. Introduction of Doug Brinkley, Interim Vice President, Administrative Services
Mr. Brinkley introduced himself to the committee and gave a brief description of his
background in education.
3. Budget Accountability Report
Leangela reviewed the accountability report. She stated that the report is updated each month and reviewed by the Board. She explained that the Unrestricted General Fund report projects expenditures out 12 months and helps determine where there are issues. She discussed the negative amounts for Adjunct Faculty and Benefits. She pointed out that benefits are capped at the 2009-2010 rate. Benefit rates are currently being worked on through negotiations. She also pointed out that Adjunct Faculty was supposed to be cut by 15% each semester, but was only cut by 10.5% in the fall and 13% in the spring.
Leangela explained that IKON and the COP had been shifted to the bond. William asked how much longer expenses could be moved to the bond. Leangela said the expenses would be shifted for 3 more years and that only appropriate expenditures can be shifted to the bond (i.e. IKON and COP). She pointed out that any expenses that are shifted to the bond must be in the bond language.
William stated that deferments have caused problems in the past with cash flow. Leangela pointed out that last year the state deferred $8 million and this year it’s $9 million. She explained that COS has a municipal lease with Valley Business Bank that is used to help with cash flow because it can cross fiscal years. She pointed out that TRANS funds are due each year on June 30th, so they cannot be used to cross fiscal years. She also told the committee that COS does not get a paid apportionment until the
State budget passes.
Leangela reviewed the Financial Report (quarter ending 12/31/11). She explained that it’s a snap-shot of balances as of December 31st and not a projection to the end of the year. She discussed the capital projects budget and explained that the balance
fluctuates, depending on reimbursement money from the state. She told the committee that the state normally pays on a 60 day cycle.
4. Budget Implications of Mid-Year Cuts
Leangela reviewed budget trigger cuts for 2011/2012. She reviewed three scenarios,
which were presented at the Board retreat in January.
Best Case: The fund balance draw for best case scenario is $32,337.
Most Likely: The fund balance draw for most likely case scenario is $0.
Worst: The fund balance draw for worst case scenario is $0.
The deficit factor is attributable to BOG Waivers increasing from 50% to
70%. The shortage in the State budget is spread to all Districts. At the January
Board retreat the 2.5% cut for COS was $1,080,000. The newest estimate is
3.3% or $1,400,000.
Linda reviewed the scenarios for 2012/2013 budget. These scenarios were also
presented at the Board retreat in January.
Scenario 1: Fund balance draw for scenario 1 is $0
Scenario 2: Fund balance draw for scenario 2 is $1,272,036.
Scenario 3: Fund balance draw for scenario 3 is $2,664,672.
Scenario 3 will wipe out the total general fund reserve. Mr. Brinkley said he
could not, in good faith, recommend adopting a budget with a $2 million fund
balance draw.
Mike Skaff asked how we could consider operating a new campus when we can’t
operate this one. The District is not getting any new funding and the State is cutting
back. William said his understanding is that existing resources would be taken from
Visalia and moved to Tulare. Mike said he understood that the salaries would be the same, but what about the operation of the facility. Mr. Brinkley told the committee
that we don’t have the solutions to those questions, but these are things to think about
when we build the budget. He said opening a new campus is a challenging task at the
best of time, but it is difficult during these budget times. Mr. Brinkley also pointed out
that if a portion of the new campus is not opened the District will never get another bond
passed in Tulare. No one anticipated this when the project was bid.
5. AP 6520- Security for District Property
Committee members were not aware that written permission was required to remove
equipment from the work site. The committee is recommending the procedure for
removal of property be refined.
6. Fiscal Implications of Eliminating Summer School in 2012
The District did not budget for summer school in 2012, so there are no savings this year. Savings from the previous year was $1.2 million.
7. Financial Impact of the CDC
David questioned the expenditures identified on the CDC spreadsheet. He asked if
they appeared to be extraordinary and if it was appropriate to apply these expenditures
to the CDC. Linda explained that the expenses reported are true expenses for the
program. She pointed out that the CDC receives state preschool funding, funding for the
nutrition program and private funding from parents. In 2010/2011 the program received
MAA revenue, which helped offset the deficit. She also pointed out that when the
CDC and State Preschool are running at a loss the general fund has to has to contribute
to keep them running.
8. Capital Outlay Budget
Linda explained that the purpose of the Capital Outlay Budget is for construction and schedule maintenance projects. She pointed out that this budget fluctuates due to reimbursements from the State.
9. Tulare Center Construction Progress
David asked if there was enough money in the Tulare bond to complete the projects. He
said he was told by Eric Mittlestead that property values are down, so revenues are
insufficient to meet the costs. Linda informed the committee that COS sold $30 million
in bonds and did a BAN (Bond Anticipation Note) for $11.5 million to get through
construction. If additional bonds cannot be issued the District will refinance the BAN for
3 more years or turn it into a COP. Linda also pointed out that the projects below
the line (projects 5, 8, 11, 12) are still pending. There won’t be funds for those projects
until bonds are reissued.
10. BICs Program Self-Sufficiency
Debbie Castro stated that BICs is self-supporting. Linda pointed out that BICs does pay its own salaries and benefits, but the District cost for BICs is approximately $200,000 a year.
11. Other
David requested that the last two items be deferred until the meeting on April 16th and
the meeting was adjourned at 4:39 p.m.
12. Date of Next Meeting (Thursday, April 19, 2012).