Below, you will find a Budget Update from Planning and Budget Council that summarizes the progress we have made, since the beginning of the year, towards providing a balanced budget recommendation to the Board of Trustees for final approval.
As part of providing greater stability in future budgets, starting in the next fiscal year, we will recommend in the budget that is presented to the Board of Trustees for approval to award total compensation increases starting on January 1. Shifting to a January 1 annual compensation change will enable shared governance committees to have a more complete picture of the largest drivers in our budget, fall tuition revenue and healthcare costs. This allows us to align all total compensation increases together. The timing of the salary increase determination will be aligned with health benefits enrollment in October. The attached memo explains the rationale for this change.
We have included in the current budget model $600,000 or the amount equivalent to a 2.6% salary increase. We are awaiting the outcome of the Compensation and Classification Study, which will inform how and whether that amount will be awarded next year.
The proposed budget includes investing in salaries at an amount that is equal to the current plan structure. We are not looking to freeze salaries across the board. The Compensation Study will inform how salary targets are established next year and going forward. As I have said in the past, I do not believe that across
the board salary freezes are a singularly effective way to address long-term budget imbalance.
The salary targets may not be able to be reached in the first year but we will work to achieve them as our resources allow.
In order to provide an opportunity to directly answer your questions and receive your feedback, I will be holding employee conversation meetings on the following dates and times:
Thursday, June 12, 2014, 11:30-12:30 a.m. at Osterlin 205
Tuesday, June 17, 2014, 9:00-10:00 a.m. at UC 207
Tuesday, June 17, 2014, 8:00-9:00 p.m. at Beckett 136
If you do have questions, I hope you will be able to attend one of the sessions. Thank you for your attention to this as we continue to work through this important effort.
(Here’s the budget update from Planning and Budget Council)
To: Timothy J. Nelson, President
From: Planning and Budget Council
Date: June 5, 2014
Subject: FY15 Budget Update
This memo offers an update regarding the fiscal year 2015 budget. As you know, there are many challenges to reach a sustainable model. The college has become more dependent on tuition revenue as our major source of revenue. Through shared governance, we have communicated our progress with the entire campus through town hall meetings, employee conversations and posting of the Planning and Budget Council minutes.
The fiscal year 2015 budget started with a deficit of over $1.2 million dollars. Through the work of new revenue initiatives and departmental reductions, we have been able to reduce the deficit. The table below summarizes the changes since March.
| Deficit as of March, 2014 | $1,200,000 |
| Additional revenue from Foundation | 68,000 |
| Additional revenue from Marine technology program | 135,000 |
| Reduction in E&G | 187,000 |
| Reduction in Professional Development | 40,000 |
| Reduction in COAT allocation | 50,000 |
| Reductions in personnel costs | 420,000 |
| Deficit (recommendation to use reserves) | ($300,000) |
The Vice Presidents have been charged with reviewing current personnel budgets to produce a $420,000 reduction in costs. Part of the reduction is to achieve a greater class efficiency rate with a goal of a $200,000 reduction in personnel costs. Other reductions will be achieved by reducing supplemental costs and aligning of full time positions as they become vacant.
Additionally, we propose a shift in the timing of when compensation changes will be effective. We have concluded that it is advantageous to align compensation on a calendar year rather than a fiscal year cycle. Moving to a calendar year compensation change will align employee salary changes with their benefit changes providing a total compensation package. Shifting to a January 1 annual compensation change will enable shared governance committees to have a more complete picture of the largest drivers in our budget, fall tuition revenue and healthcare costs.
The Compensation and Classification study outcome will help determine whether, and how, raises will be provided next year. We have a fixed amount available for the budget. In order to begin the implementation of the new compensation and classification system, it is more appropriate to base whatever raises are determined on the new system. We will have the time this fall to start the new system with the improvements. Since the board expects the total compensation system to be presented as a single package, it will require that all employee groups’ compensation targets are in place for this to occur.