GAVILAN JOINT COMMUNITY COLLEGE DISTRICT
Board Budget Subcommittee Minutes

Business Services Director, Susan Cheu, reviewed the handout, "Analysis of FY09/10 Projected General Fund Surplus," which provided detail on revenue adjustments, expense adjustments and inter/intrafund backfill which resulted in a pre-audit surplus of $548,000. Trustee Dover said we reduced some services to students in FY09/10 to keep the deficit low and he hoped that it did not result in the overage. Trustee Davenport and Trustee Dover had questions and comments related to the unexpected surplus and a discussion continued regarding the items that affected the swing in the budget to actual figures. Some factors discussed were: staff cutting back on expenses; implementation of Banner which allowed better monitoring of program overspending; an unexpected RDA refund; and a reduction in the projected backfill to categorical programs.

Joe Keeler reminded everyone that this was one time money due to the items previously noted. President Kinsella felt that budget swings would level off. He also reported that the state has been placing the district in unusual situations and that the district needs to be prepared to respond to them. All agreed that a "balanced" budget is important and that programs will continue to be assessed carefully when developing the budget. Trustee Davenport thanked Susan Cheu for explaining the detail behind the surplus balance.

Vice President, Joe Keeler, referred the Committee to the spreadsheet, "Consolidated Summary of All Funds Adopted Budget FY 2010-11," which reflected a "breakeven" budget with a projected ending fund balance at June 30, 2011 of $2,676,883; this is 9.25% of expenditures and transfer out. He reminded the Committee that the ending fund balance represents one time funds. Joe Keeler mentioned several items related to this budget; assumptions include a $569,000 transfer from the retiree health benefit trust fund, no COLA, and no growth revenue. He also indicated several items that may affect the budget but as of now are unknown; Title V funding and STEM grant funding. If these potential revenue funds become available, revenue and expenditures may balance and the retiree health benefit trustee transfer can be reversed.

Trustee Davenport asked if more revenues become available what would be the approach for spending it. President Kinsella said that a shared governance process is in place and that any budget adjustments would go to the Board with a recommendation from the President. Interfund transfers could also be approved to debt service and capital projects, as an example. In addition, President Kinsella indicated if funds were desired for starting a new curriculum program it would take up to 18 months from the point of conception to being approved by the Chancellor's Office.

Vice President Keeler reported out to the Committee on several capital projects that would require transfers either from the general fund, Measure E, or some other source. The first three projects are related to property development and, if approved, would come from the general fund.

1. Hollister property development: to confirm that any site is viable for campus usage, funds estimated at $100,000 would be required for due diligence. Questions related to air quality, soil testing, and fault lines would be required for Division of State Architect (DSA) approval.
2. Aviation program move to San Martin site: based on conversations with the architect, the county, and other factors, a general estimate for moving, infrastructure, and preparing for the program would be $400,000.
3. Programs such as living labs, natural landscape, erosion control class and the use of the golf course as a lab: There are a lot of unknowns in this area and a projected cost is not yet available.

Measure E related projects or other funding sources include:

1. Water system: Joe Keeler explained that the district did apply for 100% state funding, in the amount of $500,000 to replace the water tank, however, that funding is tied to the unresolved state budget. He also noted that the funding is not for domestic water just fire suppression. To add domestic water would require an estimated $500,000.
2. Summer 2011 moves: an estimate of $500,000 is being suggested to remove or renovate unused portables as swing space will no longer be needed. In addition, a number of small renovations may need to be done.
3. GECA move to old police academy site: Joe reported that President Kinsella is in discussions with Gilroy Unified School District as to the final arrangements, however, the district may need to demolish the existing portables, consider hazardous material requirements due to existing mold in the buildings, and possible infrastructure issues. A general estimate is $500,000.

Joe reported that the bid for the social science building modernization project came in under budget by $481,000 and the business and cosmetology modernization project came to completion under budget by $200,000. Joe suggested that the $700,000 savings could be transferred to another Measure E project at a later date.

Joe concluded that these are rough estimates on some upcoming projects. Trustee Dover asked for additional breakdown on the $400,000 estimated at the San Martin airport which Joe provided. Trustee Davenport requested a prioritized list and President Kinsella indicated that would be available.