Meeting Notes - March 13, 2015
1) Approval of Notes from January 23, 2015
The notes were approved.
Cheu reviewed the summary of major changes for the 2nd quarter report.
2014/15
Second Quarter Report
SUMMARY OF MAJOR CHANGES
The district has completed its financial analysis for the second quarter of operation (July 1, 2014 through December 31, 2014). Enclosed in this document is reporting for all of the funds the district maintains as authorized by the California Education Code. The short description and analysis at the beginning of each fund report explains the purpose of the fund and recent financial trends that may have changed from the adopted budget. Also included in this report is a supplemental information section that contains the State Quarterly Report (311Q). The analysis of the General Purpose Fund follows.
GENERAL PURPOSE FUND REVENUE
Revenue, Enrollment Assumptions, and Productivity
Our overall funding includes both Redevelopment Agency (RDA) and Education Protection Account (EPA) revenue projections, in addition to the traditional state revenue funding sources generated from state apportionment, enrollment fees, and property taxes. Consequently, all revenue reports from the state are closely monitored throughout the year in anticipation of any shortfall in total state funding. A deficit factor of 1%, as recommended by the state chancellor’s office, was included in our adopted budget in the event of a revenue shortfall. In the second quarter, a one-time reimbursement of $1.2 million for prior year mandated cost claims was received and is included in this report.
Resident Enrollment
Under the 2014/15 adopted budget assumptions, we anticipated serving 31,942 resident and non-resident FTES. This number reflected resident enrollment of 27,355 FTES and non-resident enrollment of 4,588 FTES.
In October 2014, the 2013/14 Apportionment Attendance Report was recertified to include an additional eighty-seven resident FTES and three non-resident FTES, for a recalculated total of 32,032 resident and non-resident FTES. The P-1 320 attendance report filed in January estimated that we will report a decrease of approximately 500 FTES by the end of this fiscal year (see Table 2). Due to the stabilization component included in Senate Bill 361, we will still receive apportionment for 2014/15 based on the 30,032 FTES generated in 2013/14. However, our funding base will be lower for 2015/16 if the decline in FTES in the P-1 reporting calculations do not change. The colleges and the enrollment management team continue to carefully monitor student enrollment, analyze course offerings, and heighten marketing and recruitment efforts to maximize access for students and to restore the FTES decline from 2013/14.
Non-Resident Enrollment
It is currently estimated that we will exceed our budgeted revenue by approximately $1.9 million for fiscal year 2014/15. This additional revenue is due, in part, to an increase in the non-resident tuition fee for 2014/15 and the balance generated from enrollment trends that we are currently analyzing to project year-end final estimates. Because this revenue stream can be more volatile and is dependent on many external factors, such as access to visas and exchange rates, we closely monitor our non-resident revenue throughout the year. We will revise our revenue projections, as well as corresponding expense estimates, in the third quarter when more data is available for analysis.
Prior Year Adjustment
The state finalizes the prior year apportionment in January of the following year, when both the final property tax revenues and final college FTES reports are certified. When the district closed its books for fiscal year 2013/14 in July 2014, the deficit factor was estimated at approximately 1%, or nearly $1.4 million. The latest information from the state chancellor’s office indicates that the 2013/14 deficit factor will most likely be reduced to approximately ½ of 1%. This will result in an increase to our 2013/14 total revenue of approximately $700,000, and the adjustment to reflect this change will be reported in the third quarter.
Productivity
We have not modified the productivity estimates since the adopted budget. For fiscal year 2014/15, productivity is budgeted at 530 (WSCH/FTEF). The colleges are carefully monitoring student enrollment and course offerings to maximize access for students. We anticipate a drop in the budgeted productivity calculation by year’s end due to declining enrollment and decisions to maintain lower-enrolled classes to capture all available FTES.
GENERAL PURPOSE FUND EXPENSE
Certificated Salaries
We are currently projecting approximately $477,500 in one-time savings to this category due to float from vacant non-teaching positions and unspent funds in the personnel contingency account. As in prior years, any float from vacant faculty positions will be used to hire part-time faculty and the remainder of unused funds, if any, will revert to the unrestricted fund balance.
Classified Salaries
We are currently projecting approximately $245,800 in one-time savings to this category due to float from vacant classified positions. As in prior years, any float from vacant classified and management positions will be transferred to the colleges as additional one-time ‘B’ budget.
Benefits
At this time, we are not estimating any changes to the Benefits category.
Supplies and Capital Outlay
We are currently projecting a decrease of $60,000 to the Materials & Supplies category with a corresponding increase to the Capital Outlay category.
Operating Expenses
At this time, we are not estimating any changes to the Operating Expenses category.
Transfers/Other
At this time, we are not estimating any changes to the Transfers/Other category.
Fund Balance
The net change to fund balance is the result of the combination of increases and decreases to revenue and expenses as explained in each line item noted above.
Based on all assumptions of revenue and expenses, the 2014/15 budget is currently forecast to have a slight operating surplus of approximately $283,000.
The district is projecting to end the fiscal year with a $44.2 million fund balance, of which $15.7 million represents designated college, Central Services and district-wide carryover, $1.6 million is designated for enrollment stimulus, and $8.6 million is designated for the 5% mandatory reserve. The remainder of the fund balance, $18.3 million, will be set aside as a stability fund (see Table 1).
We will continue to keep the Board informed of important developments impacting revenues and expenses as the year progresses.
3) Public Works Contracts SB854
Cheu reviewed the Public Works presentation prepared by the Purchasing Director, Pam Gray.
Further information can be found at:
http://www.dir.ca.gov/public-works/SB854.html
SB 854 - Important Information for Awarding Bodies
SB 854 (Stat. 2014, chapter 28) made several changes to the laws governing how the Department of Industrial Relations (DIR) monitors compliance with prevailing wage requirements on public works projects. Some of these changes modify the responsibilities of awarding bodies, including by eliminating the obligation to pay DIR for compliance monitoring on state bond-funded projects. Some of SB 854's changes went into effect immediately (because the bill was adopted as an urgency measure), but others will be phased in as outlined below.
Immediate changes:
- Duty to notify DIR when awarding a contract for a public works project, using the online PWC-100 form. This requirement, found in Labor Code Section 1773.3, now applies to all public works projects. Previously it applied to projects subject either to apprenticeship or DIR compliance monitoring requirements.
- Elimination of the obligation to pay DIR for compliance monitoring on state bond-funded projects and other projects that required use of DIR's Compliance Monitoring Unit (CMU). DIR will continue to monitor compliance on these projects but will not charge awarding bodies for any services provided on or after June 20, 2014 [the effective date of SB 854]. The alternative of using a DIR-approved Labor Compliance Program (LCP) or a project labor agreement in lieu of the CMU on one of these projects has also been eliminated. However, for ongoing projects that were using one of the alternatives, monitoring should continue until the project is completed.
Phased-in changes:
I. Public Works Contractor Registration Program
- All contractors and subcontractors who bid or work on a public works project must
register and pay an annual fee to DIR. The phase-in timetable is as follows:
July 1, 2014: Registration program became effective and first contractors registered. Initial registrations will be valid through June 30, 2015.March 1, 2015: No contractor or subcontractor may be listed on a bid proposal for a public works project unless registered with DIR.
April 1, 2015: No contractor or subcontractor may work on a public works project unless registered with DIR. All projects bid before March 1, 2015, or awarded prior to April 1, 2015 will not trigger the registration requirements.
- Once the registration requirement becomes mandatory (March 1, 2015 for bids and April
1, 2015 for projects awarded), an awarding body may not accept a bid or enter into
a contract for public work with an unregistered contractor.
- DIR maintains an up-to-date listing of registered contractors.
- There are exceptions to the registration requirement for bidders in circumstances where a CSLB license would not be required at the time of bidding.
- Additional exceptions and protections are included in the registration laws to limit bid challenges, allow some violations to be cured through payment of penalty fees, and allow unregistered contractors to be replaced with registered ones.
II. NOTICE REQUIREMENTS
- January 1, 2015: The call for bids and contract documents must include the following information:
- No contractor or subcontractor may be listed on a bid proposal for a public works project (submitted on or after March 1, 2015) unless registered with the Department of Industrial Relations pursuant to Labor Code section 1725.5 [with limited exceptions from this requirement for bid purposes only under Labor Code section 1771.1(a)].
- No contractor or subcontractor may be awarded a contract for public work on a public works project (awarded on or after April 1, 2015) unless registered with the Department of Industrial Relations pursuant to Labor Code section 1725.5.
- This project is subject to compliance monitoring and enforcement by the Department of Industrial Relations.
- [To be determined]: The awarding body must post or require the prime contractor to post job site notices prescribed by regulation. (See 8 Calif. Code Reg. §16451(d) for the notice that previously was required for projects monitored by the CMU.)
III. FURNISHING OF ELECTRONIC CERTIFIED PAYROLL RECORDS TO LABOR COMMISSIONER
- All contractors and subcontractors must furnish electronic certified payroll records directly to the Labor Commissioner (aka Division of Labor Standards Enforcement). The phase-in timetable for this requirement is as follows:
June 20, 2014 [immediate]: Any project that was being monitored by the CMU/Labor Commissioner prior to the adoption of SB 854 will continue to be monitored by the Labor Commissioner afterward; and the contractors on those projects must continue to furnish certified payroll records to the Labor Commissioner until the project is complete.
April 1, 2015: For all new projects awarded on or after this date, the contractors and subcontractors must furnish electronic certified payroll records to the Labor Commissioner.
Anytime: For projects besides those listed above, the Labor Commissioner may at any time require the contractors and subcontractors to furnish electronic certified payroll records. The Labor Commissioner anticipates requiring this for green energy school projects that receive Proposition 39 funding.
January 1, 2016: The requirement to furnish electronic certified payroll records to the Labor Commissioner will apply to all public works projects, whether new or ongoing.
Exceptions: The Labor Commissioner may (but is not required to) excuse contractors and subcontractors from furnishing electronic certified payroll records to the Labor Commissioner on a project that is under the jurisdiction of one of the four legacy DIR-approved labor compliance programs (Caltrans, City of Los Angeles, Los Angeles Unified School District, and County of Sacramento) or that is covered by a qualifying project labor agreement.
These new requirements will apply to all public works that are subject to the prevailing
wage requirements of the Labor Code, without regard to funding source.
4) Program Review & AUO Update
Cheu gave a status update on the progress of the Program Reviews and AUOs for the division. She reminded the team that Veronica Aliva was the AUO liaison and that we will continue to work with her to enter the remaining information into TracDat and plan the next steps.
5) Quick News
The college will not be collecting materials fees next year.
Present: Cheu, Gerard, Harada, Swanson, Watson, Notes: GibsonApologies: Jones-Dulin, Joseph