Path to Recovery Update 6/18

June 18, 2020 - 03:08 PM

The Mt. SAC Path to Recovery update provides a summary of large scale efforts from the college to navigate the COVID-19 crisis, including its related economic impact.

Tentative Budget to be Presented to Board

At the Board of Trustees meeting next week, Mt. SAC will present details on the Revised 2019-2020 Budget and Tentative 2020-2021 Budget. The college assumes a $16.6 million budget deficit next year, based on the Governor’s May Revision. On June 15, the state legislature approved a more optimistic spending plan that counts on Congress to send states additional aid by Oct. 1. Budget negotiations are continuing and a finalized budget is expected before the start of the new fiscal year. However, with the state tax deadline delayed until two weeks after the start of the fiscal year, a clearer budget picture will not be available until late summer.

Budget Strategies Add Up

In preparation for budget cuts, Mt. SAC has implemented a number of strategies to carry over funding from the 2019-2020 budget and reduce spending in 2020-2021. The College estimates savings from vacant positions of nearly $8 million in 2019-2020. Additionally, the college expects to reduce expenditures from frosted positions to save $4 million in 2020-21. The return of unspent New Resource Allocations have also saved more than $700,000. Budget managers have analyzed four years of expenses to identify account balances that have historically ended with positive balances. From there, budget reductions for the 2020-2021 budget have been sent forward to executive leadership.  

The Board of Trustees will also consider a proposal related to the college’s Other Post-Employment Benefits (OPEB) Trust, which is a fund to pay for retirees’ health benefits. The college plans to delay contributions to the OPEB Trust this year and next year. In addition, because of stock market volatility, the college recommends paying approximately $2.9 million for retiree health benefits from the 2019-2020 unrestricted general fund rather than pulling money out of the trust during a decline.