Presentation to the Chancellor’s Cabinet October 14, 2013 Inspiration. Innovation. Graduation. Presented by Mr. Roy Stutzman, RvStutzman Consulting

CCCD MULTI COLLEGE RESOURCE ALLOCATION

Presentation to the Chancellor’s Cabinet

October 14, 2013

Inspiration. Innovation. Graduation.

Presented by Mr. Roy Stutzman,RvStutzman Consulting

WHY REVIEW CURRENT MODEL? Allocation model “check up”

“Fixed cost” elements of current model FTEF/FTES allocation alignment Campus “dedicated” revenue

Local allocation model and SB 361 state model alignment

Assure linkage between revenues and expenditures Fiscal stability and accountability Documentation and understanding (transparency)

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ACCREDITING COMMISSION STANDARD IIID

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“Financial resources are sufficient to support student learning programs and services and to improve institutional effectiveness. The distribution of resources supports the development, maintenance and enhancement of programs and services. The institution plans and manages its financial affairs with integrity and in a manner that ensures financial stability. The level of financial resources provides a reasonable expectation of both short-term and long-term financial solvency. Financial resource planning is integrated with institutional planning at both college and district/system levels in multi-college systems”.

ACCREDITATION COMMISSION STANDARD IV3C

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The district/system provides fair distribution of resources that are adequate to support the effective operations of the colleges.

ALLOCATION PRINCIPLES


Must be simple and easy to understand Must provide for financial stability Must provide for an appropriate level of reserves

consistent with board policy and direction Must be responsive to the District/College’s planning

process and related goals and objectives Must provide means to address any current or future

emphasis directed by the Governing Board Must promote efficient use of District resources

ALLOCATION PRINCIPLES (cont’d)


Must be flexible and allow for appropriate decisions to be made at the local level

Must allow colleges to initiate, implement and be responsible for new program initiatives

Must provide for transparency of District Office and District Wide expenditures in support of college operations.

Must match resources with service levels using objective standards or measures to assure equity

PROPOSED ALLOCATION FUNDAMENTALS


Use sound and rational formula to distribute state apportionment revenue to colleges (workload basis credit/non credit FTES)

Allocation Model must address the economy of scale issues for small and large colleges

Each College shall receive a basic allocation for state approved centers

District Wide and District Office costs that are recognized as appropriate shall be provided in the model, either “off the top” or through an assessment to the colleges

PROPOSED ALLOCATION FUNDAMENTALS (cont’d)


Allocation Model should lead colleges to maximize revenues through enrollment management and provide incentives to improve student access and excellence

Ending balances will be retained by the respective Colleges and by District Office and District Wide services

Required District reserve and regulatory costs will be provided for in the model

PROPOSED ALLOCATION FUNDAMENTALS (cont’d)


Assure funding source and on-going revenue to support collectively bargained salary schedule increases

Must provide clear accountability and define areas of District level oversight, describe the nature of that oversight and the degree to which it will be exercised, i.e., FTES targets, faculty and staff productivity, full time faculty requirements, 50% law, etc.

TYPICAL ALLOCATION MODEL ISSUES


How to handle ending balances Reserves and deficits – accountability

Reserves Accountability for over spending

Allocation of new revenues COLA Growth

Long term planning District salary increases Shifting of resources between colleges

Allocation Model Issues (cont’d)50% LawFaculty Obligation Number (FON)Employee Step and Column CostsPeriodic review of the procedures

1 year after implementation3 year review

Timing of allocations to collegesDistrict Services and District Wide Cost

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POTENTIAL IMPACT OF MAJOR CHANGE IN ALLOCATION METHODOLOGY


Culture shift Accountability/Responsibility/Authority Autonomy Transparency and accountability for DO & DW Services Transparency of college allocations and expenditures Impact and involvement of colleges in negotiations

May requires an investment to transition Interest revenue, undesignated reserves, retiree health

PROCESS


Chancellor’s Cabinet review and input Meet with colleges senior leadership Model changes or adjustments to current

practice Develop findings and recommendations Chancellor’s Cabinet review and input Present findings and recommendations to the

District Budget Advisory Committee Recommendation to Chancellor

QUESTIONS/COMMENTS/OBSERVATIONS


Resource Allocation

Documents

Presentation to the Chancellor’s Cabinet October 14, 2013 Inspiration. Innovation. Graduation. Presented by Mr. Roy Stutzman, RvStutzman Consulting