September 29 2020 DC 3 Yuba Community College

September 29, 2020 DC 3 Yuba Community College District 2020 -21 Proposed Adopted Budget Presented by: Kuldeep Kaur, Vice Chancellor, Administrative Services Dr. Douglas Houston, Chancellor

1 OUTLINE § 2020 -21 Budget Highlights for CCCs § Cal. PERS/Cal. STRS Projections § Multi-Year Budget Projections § Impact by Cash Deferrals § Unfunded Liabilities § 2020 -21 Budget Assumptions § 2020 -21 Final Proposed Budget § YCCD Outlook/Enrollment Decline Risks § Questions § Appendix

2020 -21 Budget Highlights for CCCs 2 Cash Deferrals of $1. 45 B § § $791 M to be triggered off with Federal Stimulus package § Cal. PERS/Cal. STRS Employer Contribution Rates Reductions § No COLA or Enrollment Growth § State Match $$ for Capital Projects § COVID-19 Block Grant § Protect cuts to Categorical Programs

3 YCCD Cal. PERS/Cal. STRS Projections Rates Employer Contributions Cal. PERS Cal. STRS $ 3 500 000 $ 3 000 2019 -20 19. 72% 17. 10% $ 2 500 000 2020 -21 20. 70% 16. 15% $ 2 000 2021 -22 22. 84% 16. 02% $ 1 500 000 2022 -23 25. 40% 18. 10% $ 1 000 $ 500 000 $- 2019 -20 2020 -21 Cal. PERS 2021 -22 Cal. STRS 2022 -23

4 YCCD Multi-Year Budget Projections $ 70 000 $ 60 000 $ 50 000 $ 40 000 • Assumes 8% SCFF Reduction in 2021 -22 • Assumes 13% enrollment declines and SCFF reduction in 2021 -22 • Assumes decline in LCC stabilization funding $ 30 000 $ 20 000 $ 10 000 $- 2019 -20 2020 -21 2021 -22 2022 -23 2023 -24 $ (10 000) $ (20 000) Revenues Surplus/Deficit $ 2019 -20 1, 887, 518 $ Expenditures 2020 -21 316, 855 $ Surplus/Deficit 2021 -22 (6, 855, 870) $ 2022 -23 (7, 700, 373) $ 2023 -24 (8, 425, 932)

YCCD Impact by Cash Deferrals 5 § $13. 3 M Cash Deferral from 2020 -21 § Negative Cash Flow Position by June 2021: -$5 M § Paid over four months in 2021 -22 § Negative Cash Flow Position expected beginning in July 2021 § District will need to borrow to meet cash flow needs by May 2021

YCCD Unfunded Liabilities 6 § Retiree Health Benefits: $54 M § Funds set aside for this liability: § § $3. 34 M invested in Irrevocable Trust $3. 34 M in Fund 69 § Solar Loan Balance: $14. 7 M § Central Plant Loan Balance: $3. 16 M § Budget assumes 2020 -21 debt service of $1. 9 M (for Solar and Central Plant Loans)

7 2020 -21 Budget Assumptions REVENUES: State Revenue – Ongoing § District Apportionment funding driven by Base , Supplemental and Student Success Allocations. $55, 569, 490 at 7, 155 FTES (assuming 3% deficit from State’s Projections) § No COLA § No Enrollment Growth § California College Promise Expansion - $328, 039 (Restricted) § State Mandated reimbursements flat § Lottery Income (Reduction to both Unrestricted and Restricted of $437, 100) due to Enrollment Declines

2020 -21 Budget Assumptions Cont. 8 EXPENDITURES: § Salary expenses are budgeted to cover all board approved salary changes; step and column increases; and longevity increments for all employees § Includes Enrollment Management Efficiency Savings of $1. 2 M § Health and Welfare benefit costs will remain at the prior year level (no increase) § Other payroll benefits (SUI, Worker’s Compensation and Retiree Benefits) are budgeted based on the rates established by the regulatory agencies § Supplies and materials, other operating expenses and services, capital outlay, and other outgo amounts are based on District’s budget process.

2020 -21 Budget Assumptions Cont. 9 § Fixed expenses (maintenance agreements, utilities, postage, rent, Transportation, etc. ) increased slightly based on actual costs. FUND BALANCE: § District projected Ending Fund Balance for 2020 -21 is 18. 92% inclusive of reserves at 8% per Board Policy. § Contingency for Revenue Shortfall: $3, 415, 766 § Innovation Fund: $200, 000 § Other Post-Employment Benefits (OPEB): $3, 083, 572

2020 -21 Proposed Final Budget 10 GENERAL FUND UNRESTRICTED – FUND 11 § Beginning Balance $ 11, 288, 246 § Revenues $ 61, 638, 892 § Expenditures $ 61, 322, 037 § Ending/Designated Fund Balance $ 11, 605, 101(18. 92%)

11 YCCD Outlook § Cash Deferrals May Turn into Revenue Reductions § 8% reduction to SCFF of $4. 5 M for 2021 -22 § Enrollment Declines and Impact to Student Centered Funding Formula (SCFF) § Approximately $3. 68 M with 13% enrollment decline § Economic Recession may impact District’s SCFF Apportionment Due State Revenue or Property Tax Shortfalls § Pensions § Cal. PERS and Cal. STRS Employer Contributions § $816 K Increase by 2022 -23

12 YCCD Outlook Cont. § Funding OPEB liabilities § $47. 32 M Liability Remaining after depositing $3. 34 M from Fund 69 § Funding Solar and Central Plant Loans § $17. 86 M Liability Remaining § Facility Needs § $74. 19 M Scheduled Maintenance Repairs (per 5 -year scheduled maintenance plan) $80 M Facilities Modernization Costs § Technology Needs § $4. 31 M (for a 5 -year replacement cycle - $861 K Annual replacement cost unfunded)

13 Thank You! QUESTIONS

14 Appendix

2020 -21 Budget Highlights for CCCs 15 § $1. 45 B Cash Deferrals from 2020 -21 to 2021 -22 § $791 M to be triggered off if Federal Stimulus Package passes § No COLA § § No Enrollment Growth State Match $$ for WCC Performing Arts Facility and YC Fire Alarm Project § COVID-19 Block Grant of $120 M § $54 M - state funding must be spent by December 30, 2020 § $66 M – Federal funding must be spent by June 30, 2022

2020 -21 Budget Highlights for CCCs Cont. 16 § Protects cuts to categorical programs § Maintain Strong Workforce (SWF), Student Equity and Achievement (SEA) Program at 2019 -20 funding level § SEA § Requires a portion of funding to support or establish food pantries or food distribution programs Strong Workforce Encourage short-term workforce training programs focused on: Economic recovery and job placement Reskilling and upskilling Have at least one proven employer partner, demonstrate job vacancies Use Competency-based approaches and apply credit for prior learning Short term: 4 to 12 week program

2020 -21 Budget Highlights for CCCs Cont. 17 § Relief to Pension Costs § $2. 3 B reallocation to buy down employer contribution rates for Cal. PERS and Cal. STRS Type of Pension 2020 -21 Prior Rate 2020 -21 New Rate 2021 -22 Prior Rate 2021 -22 New Rate Cal. PERS 22. 67% 20. 7% 24. 6% 22. 84% Cal. STRS 18. 41% 16. 15% 17. 9% 16. 02%

18 2020 -21 Principles of Fiscal Planning § Responsible stewardship of available resources will serve as the foundation for sound management and sustainability § Resources are allocated to strategic priorities established by the Governing Board § Ongoing expenditures will be funded by ongoing revenues and one-time expenditures will be funded by one-time revenues § Total “cost of ownership” considered for new or continued commitments

19 2020 -21 Principles of Fiscal Planning Cont. § Maintain adequate fund balance to avoid short-term borrowing § Revenue analysis is completed prior to making short or long-term commitments § Minimize or altogether avoid “structural deficits” § Develop college and District Services budgets through transparent and inclusive processes

2020 -21 Principles of Fiscal Planning 20 Established September 4, 2019 - NEW § Ensure fiscal stability and viability by optimizing enrollments and integrating Strategic Enrollment Management (SEM) into the Districts Financial Planning, budgeting and allocation processes. § Ensure College student enrollment goals align with the mission and core elements of the Student Centered Funding Formula (SCFF). § Evaluate the Colleges Unrestricted General Fund budgets based on the elements of the SCFF, using the data to inform resource allocations. § Ensure Multi-year budget projections rely on trend analysis, incorporate industry standards and include the funding elements of the SCFF.

21 2020 -21 Budget Planning Strategies/Assumptions FY 2020 -21 YCCD Budget strategies compliment, don’t replace, Board’s fiscal planning principles: Accelerate key initiatives and strategies (i. e. Guided Pathways, Online Education, AB 705, and Open Educational Resources, etc. ). Implement various efficiency measures: College and District Services reorganizations supported if they make reductions to expenditures Enrollment management strategies for making improvements to schedule efficiencies Strive to avoid reductions especially in FY 20 -21; delay instead of cut.

22 2020 -21 Budget Planning Strategies/Assumptions Delay many staffing activities. Any reductions or delays will be made based on each individual program needs. Establish a contingency in the fund balance: Cover revenue shortfalls from Apportionment Cover enrollment management efficiencies shortfall Cover revenue shortfalls from enrollment declines Preserve fund balance for anticipated FY 21 -22 deficits Preserve funding levels in Irrevocable Trust and Retiree Health Benefits Fund for retiree health benefits liability Limit categorical employment (salaries and benefits) to no more than 75% of total allocation (phased in approach over a multi-year period)

23 Resources § Yuba CCD Vision, Mission, Strategic Goals, and Values § FY 2020 -21 – Chancellor’s Goals/Priorities § Final 2020 -21 Proposed Budget Assumptions § State Chancellor’s Website - www. cccco. edu