BUDGET AND FINANCE COMMITTEE2014-15 First Quarter Financial Status ReportNovember 5, 2014

2014-15 First Quarter Financial Status Report

-- Status of Fund BalanceEnrollment Planning and TargetsState Budget Outlook for FY 2015-162015-16 Budget Planning and DevelopmentBudget Cautions and Concerns

2014-15 First Quarter Financial Status ReportNovember 5, 2014

FY2014-15 (as of First Quarter, since the Board of Trustees has not granted any salary increases,The first quarter projection assumes no salary increases at this time)

Projected Revenue $546.91 m

Projected Expenditures 546.50 m

Proj. Revenue Over Expenditures $ 0.41 m

Balances Carried Forward for 2013-14 $73.31 m Projected Ending Balance $73.72 m Percent of Projected Expenditures 13.49%

2014-15 First Quarter Financial Status ReportNovember 5, 2014

Status of Fund Balance

Financially favorable – projected to end the year with $73.7 million in Unrestricted General Fund with new revenue from:• $4.14 million in COLA (0.85%) •$12.59 million in enrollment growth revenue (2.75%)

FTES

2014-15 Funded Base = 99,613 FTES

2014-15 Budget Year Targets = 104,344 FTES• Planning Growth Target = 4.75% • State Funded Enrollment Growth = 2.75%• District will fund colleges at cost = $2,324 per FTES for a 2% over-cap from Contingency Reserve

4

2014-15 Reserves

General Reserve (6.5%) 34,440,765Contingency Reserve (3.5%) 19,085,721 Deferred Maintenance Program Reserve (1%) 5,453,063

Total Reserves $58,979,549

State Budget Outlook

2015-16 California Community College System Budget Request - $735 million

• $120 million for Access => approximately 2% growth in FTES

• $180 million for COLA (3%) => estimated statutory COLA for FY 2015-16 is estimated by School Services of California to be 2.1%

• $100 million for Full-time and Part-time faculty

• $200 million Student Success and Student Equity Plans

• Enhanced Noncredit Rate – Commencing in 2015-16, the Enhanced Noncredit rate will equal the credit rate

• Implementation of New State Growth Allocation Formula

LACCD – 2015-16 Proposed Budget Planning Assumptions

• The Budget will be based on Governor’s State Proposed

Budget to be released in January 2015• The Budget Plan will reflect the Board’s visions and

priorities to support the educational programs and services of the

district• Focus on Student Success and improve Student Equity • Meet accreditation standards• Cover hiring of full-time faculty to maintain the Faculty Obligation Number• Ensure funding is adequately provided for facilities maintenance and operation needs• Maintain a minimum of 10% reserves

Budget Cautions and Concerns

Proposition 30 is temporary Sale tax increase terminates at the end of 2016 (approximately 21% of Prop 30 revenues) Income tax increase terminates at the end 2018

STRS Obligations Employee contribution rate will increase to 8.88% in 2014-15 to 19.1% as of 2021 Significant costs for the District and Colleges

FON Obligations and Penalties Fall 2008 was 1,461 and reported 1,434.53, for a difference of 26.47 full-time

equivalent faculty =>penalty for Fall 2008 of $1,699,930. The penalty amount will be adjusted on the 2013-14 Recalculation Exhibit C and appear as a prior year adjustment.

FON Planning and Obligation for Fall 2015

Accreditation OBAMA Care – “Cadillac Tax”? Deficits