The Foothill-De Anza College district will suffer an operating deficit of 9 million dollars in 05-06, according to Mike Brandy, Foothill-De Anza’s Vice Chancellor of Business.
At a De Anza College town hall meeting on Monday, Brandy said that the district will not meet its projected budget, but expressed confidence in the district’s ability to manage this budgetary shortfall.
"We can, we will, we’ve done it before," said Brandy. "We always deliver, and our budget will be balanced in 06-07."
District revenue slipped by $3 million in 04-05. State funding for the 03-04 academic year was cut by $925 thousand, and resident and non-resident enrollment fell, dealing a combined blow of approximately $1.9 million.
"A 1 percent change in the Full-time Equivalent Student is about a $1 million change in revenue," said Brandy.
FTES accounts for 97 percent of all district revenue.
With decreases in enrollment also come decreases in campus-based revenue, such as bookstore, print shop and cafeteria monies.
Brandy said that the district’s State Teachers’ Retirement System contribution would increase by 2 percent, equivalent to $900,000, due to a controversial state-wide shift of retirement funding to K-14 schools without a discretionary benefit increase.
A $152 million revenue was estimated for 05-06, as well as a $161 million expense.
"We’re losing revenue," said Brandy. "Expense is going up a little bit."
Brandy said one of the reasons expenses are not dropping is that each class might be down a student rather than one class being cancelled. Classes are still retaining operating costs, but fewer students are attending each class.
District-wide resident FTES decreased, which was expected to bring in $1.2 million of growth money.
The district was also faced with a $700,000 loss in revenue from international students, which usually brings in $11 million per year — more than one-fifteenth of district income.
Brandy’s estimates counted factors such as graduation and retention as being restored, but not unused wages since those funds only become available when an employee leaves unexpectedly during the year.
If all estimates were correct, the district would be $1.2 million below its reserve.
The district is due to release an official second quarter report within the next couple of weeks.
According to Jeanine Hawk, Vice President of Finance and College Services, an overall 4 percent decrease this year could drop to 2 or 3 percent if spring quarter sees a resurgence in enrollment.
Hawk said that new Friday and Saturday sessions are currently being developed by instructors and management in an effort to boost spring quarter FTES and continue to recoup fall quarter losses.
De Anza’s two primary budget issues are the rising deficit and De Anza’s as yet-undetermined share of the district’s $9 million shortfall.
Hawk said that one unfilled position would be permanently cut: the Dean of Distance Learning, previously filled by Dr. Jaci Ward.
Hawk emphasized the necessity of problem-solving for the college’s situation
"We don’t expect a big windfall somewhere in the near future," Hawk said.
Copies of the town hall budget presentations will be available on the De Anza Web site at http://www.deanza.edu.