College Weathered Financial Storm
in Pursuit of Stability
Fiscal Year 2010-11 could be characterized by one word, “stormy”! It was a year of budget cuts, belt-tightening, and savings for the college, but thanks to prudent planning and making the tough decisions, Mt. SAC weathered the storm toward financial stability.
During the fiscal year, Mt. SAC realized $145.1 million in revenue and expenditures of $141.6 million. The college ended the year with a total positive variance of $9.7 million as a result of a combination of increased revenue, attrition, and the campus community working together to reduce expenses and maximize savings.
The positive variance included $3.2 million in enrollment growth and restoration funding, and $6.5 million in expenditure budget savings. Some of those expenditure savings came from a hiring “chill” that saved the college $2.4 million, unspent department budgets totaling $2.3 million, and utility savings of $300,000 through energy management projects. For the second consecutive year, the college instituted a 4/10 workweek schedule for employees during the hot summer months to save on utility (primarily air conditioning) costs. Mt. SAC also saw $448,000 in savings through a reduction in short-term hourly employee and overtime hours. No fulltime employees were laid off. Funding sources for the FY11 budget included $131 million in state apportionment, $3.1 million in enrollment growth funding, and $3.5 million in lottery funds. College reserves grew to 23.8% for a fund balance of $33.8 million––substantially above the 10% reserve policy mandated by the college Board of Trustees.
The fiscal scenario for 2011-12 remains a familiar one with more budget cuts and costsaving measures looming ahead. Systemwide, California’s community colleges are facing a midyear $400-million cut to base apportionment, no growth funding or cost-of-living adjustments, and student enrollment fee increases from $26 to $36 per unit in fall 2011, as well as an additional $10 fee increase effective next summer.
For Mt. SAC specifically, the 2011-12 budget assumes revenues of $137.3 million and expenditures of $144.8 million, resulting in a projected structural deficit of $7.5 million. Anticipated property tax and enrollment fee shortfalls and certain one-time expenditures will cut into the college’s budget by an additional $748,000.
Prospectively on the cost-containment side of the ledger, Mt. SAC plans to reduce costs further by eliminating some vacant positions to achieve $2.4 million in savings. Cuts in class scheduling will save another $1.7 million. Additionally the college will save $1 million as a result of a canceled election for three seats on the Mt. SAC Board of Trustees, whose incumbents are unopposed. Mt. SAC will also offset revenue reductions with the use of reserves to maintain the quality of programs and services for students.
These efforts will need to continue beyond the next fiscal year as the college and state government continue to forge through an uncertain economic environment. Through it all, Mt. SAC remains committed to employing the fiscal prudence and discipline necessary to restore its financial stability.
Michael D. Gregoryk