GAVILAN JOINT COMMUNITY COLLEGE DISTRICT
Board Budget Subcommittee Minutes

1. State Budget: Joe provided the "State Budget Update", dated August 21, 2007 and noted that it had just come out 2 hours before the Committee meeting. He said that although the Legislature had finally approved the budget, the Governor still had to sign it and some cuts from the Governor are likely. Steve indicated that from the information he has received, the Governor, for the most part, plans to leave K-14 education intact with no further significant cuts to education.
   
   Joe highlighted that the COLA of 4.53% is still in the budget and that the state rate for enrollment growth is 2%. Gavilan's rate is estimated to be 4.817% (non-deficited). Mark asked if any of the $5 million for the nursing program enrollment equipment would be available for Gavilan and Steve indicated that we would apply for whatever money we could secure within that item.
   
   Joe also indicated that although there is no additional one-time funding in the five different categories as in FY 06-07, the budget contains physical plant and instructional equipment money.
2. Gavilan Budget: Joe handed out Exhibit 2, "Consolidated Summary All Funds, Final Budget FY 2007-08" and walked the Committee through the various funds in the Exhibit. Specifically, Joe noted that total expenses for the District are $97 million but that $57 million of that is directly related to the Measure E funds and drawing down and expending money to purchase the property in Coyote Valley and San Benito Counties that the Board and Steve have secured. Joe then focused on the Unrestricted General Fund 10 in Exhibit 2.
   
   Joe started with the current budget numbers for FY 06-07 and indicated that all adjustments that the Board approved, thus far, are contained in this column. He highlighted that the surplus of $978,000 leads to an ending balance of approximately $3.2 million. Joe cautioned that we are still in the process of closing the books and these numbers may change over the next two weeks when we move from budget to actual.
   
   Joe then focused on the Final Budget FY 07-08 column. General Fund revenue includes the 4.53% COLA but zero growth. He discussed the negative surplus number of $472,000 and that this deficit is primarily the result of two one-time funding expenditures:
   
   
   1. one time funds from FY 06-07 that were not expended in FY 06-07 ($388,000) and,
   2. one time allocation for the softball scoreboard ($100,000)
   Taking those two numbers into account, the Final Budget FY 07-08 is a "breakeven" budget.
   
   Joe discussed two numbers that have changed from about two weeks ago to this presentation of budget numbers in a communication that Steve sent to the Board. The information from two weeks ago had an estimated FY 06-07 ending balance of approximately $3.8 million but that was based on a best estimate prior to closing the books on FY 06-07. The number now looks more like $3.2 million. Additionally the Final Budget now shows a "breakeven" net change in ending fund balance. Two weeks ago, however, the Final Budget revenue was adjusted and a number of additional expenses were loaded into the Final Budget, decreasing revenue from a $1.2 million surplus to the "breakeven" you now see.
   
   Steve passed out, "Revised FY 07/08 General Funds Revenue" and reviewed with the Committee how growth plays such a significant role in providing additional resources to the District and that if we can maintain our growth each year, and then some, then the District can continue to meet additional resource obligations. Steve again highlighted how the FY 07-08 Budget contains the 4.53% COLA but because of the uncertainty of what the state budget would fund for growth and Gavilan's actual growth potential, the Final Budget revenue does not rely on any growth at this time.

The subcommittee agreed to meet sometime during the summer to review the Final Budget.