By Casey Michie
A new budget report, presented for the first time at the March 25 Board of Trustees meeting, offered details into an excess deficit of $31 million that City College must reckon with heading into the next fiscal year.
The report offers insight into budget shortages during the 2020-21 fiscal year, as well as projections and estimates for the 2021-22 budget. Economic shortfalls during the current year are primarily attributed to overages in instructional aid and benefits, according to the report.
Dr. John al-Amin, Deputy Chancellor of City College who presented the findings, noted at the meeting, “As of January we have almost entirely exhausted our funding for full time instructional aids.” He said this expenditure is an area for concern to meet projected budgets for the next fiscal year.
Allocation of the budget for faculty benefits was similarly underestimated. Health, dental, and life benefits were apportioned a little more than $15.3 million for the 2020-21 fiscal year, and as of Jan. 21, 93% of the money had already been spent.
“This cannot be anything but terrifying,” Trustee Thea Selby remarked on the numbers presented at the March 25 meeting.
Revenues to Overcome the Deficit
The March 25 meeting was not used as a platform to discuss solutions to the deficit, and it was made clear that the process of budgeting for the next fiscal year would stretch into the coming months.
A preliminary audit report, presented at the April 8 Board of Trustees meeting, stated, “The general consensus of those we interviewed [for the audit], was that CCSF faces severe fiscal challenges and the review of expenses and financial measures is a high priority.”
Exactly how solutions will address these fiscal challenges remains unclear. Areas of discussion have revolved around the allocation of the Higher Education Emergency Relief Fund (HEERF), the monetary effect of enhanced enrollment, lobbying for additional state funding, and reduction of staff and resources.
HEERF funding, a federal program that allocates money to help colleges finance expenses accrued directly due to COVID-19, could offer some deficit aid. There is $53 million currently available to City College, but the funds are restricted, and will expire soon if not allocated.
Exactly how HEERF funding will be used by City College is yet to be determined, but the funding is expected to offer some form of monetary relief to the college.
The prospect of additional state funding, which is partly tied to enrollment numbers at community colleges, presents a challenge to City College whose enrollment numbers have dropped during COVID-19.
While City College is anticipating an increase in enrollment when classes return to in-person lectures, the cost of operation may outpace any potential funding. This may result in City College incurring extra costs associated with higher enrollment, while not meeting the enrollment threshold that would trigger additional state funding.
While there has yet to be any movement on proposed layoffs, John al-Amin noted during the March 25 meeting that, “the gap we have, to put it in perspective, is about 18% of our current expenditures; we are basically 20% over budget.” Noting the hard solutions needed to tackle the deficit, al-Amin said “there is never a good time for layoffs, there is never a good time for reduction.”
New Budget Report and the Potential of Layoffs
The reality of layoffs, a looming eventuality still very much in contention since the Board of Trustees issued 163 pink slips to full time staff in March, appears increasingly likely given the budget report’s severe forecasts with no apparent alternative so far proposed by the administration to avoid them.
The layoffs, according to the administration, would reduce the college’s expenditure paid out to salaries and faculty benefits, two areas the college has identified as costly. They would not, however, affect costs associated with post-employment benefits (OPEB) or severance pay, as those laid off would receive neither.
Rosie Zepeda, Director of Media for City College, noted that, “the [potential] layoffs are for salary reductions for next fiscal year. [The college is] currently projecting a $34 million deficit for next fiscal year and with the cost of compensation exceeding 90%, compensation reductions, either via concessions and/or layoffs, must be implemented.”
Commenting during the March 25 meeting on the hard decisions the Board of Trustees must make, Trustee Tom Temprano said, “I can’t stress and underscore how important these next few months of budget development will be, if we mess this one up colleagues, I don’t think we will have another shot at this.”