Dear CCSF Community,
I’m writing today with some troubling news about the College’s Fiscal Year 20-21 budget. As we have been warning for the last several weeks, based on the Governor’s May Revise, we are now projecting the same devastating loss of revenues and subsequent budget deficit as our local, state, and national partners. And while we don’t yet have the final numbers, we know that the state is facing a multi-billion-dollar deficit, which will translate to a significant deficit for the California Community College system.
While these numbers may change, and will likely worsen, we are currently projecting a loss of $27 million in state funding. If we do not adjust spending for next year, the $19 million initial deficit projection for the College balloons to a $35 million deficit. This is absolutely devastating. And while we are continuing our advocacy work to secure more funding, the unfortunate reality is that it simply won’t be enough. The only way to survive this loss of funding and move forward is to work together to restructure the College. That is to say, we cannot keep the current structure of programs and support services, and shrink the College with more cuts.
We must focus our efforts on advocating for funding that supports our equity students in their work to graduate and transfer - students who are expressly excluded from federal funding distributed to the College. We must also enhance funding for workforce development and other programs and services.
If we work together to restructure the College and advocate for more funding, the College can be at the forefront of the City’s economic recovery efforts as a linchpin for workforce development and education.
The following information has been shared with the Participatory Governance Council Budget Committee, comprised of leadership from all constituency groups. I know this information is likely going to leave you with a lot of questions, and I along with my fellow College leaders are committed to providing you with details as soon as they are available.
Forecast for the FY20/21 College Budget
For several reasons, there is still much uncertainty around exactly how much more our budget will be impacted. The state’s revised budget issued earlier this month is still far from final, as much of it is contingent on federal funding – which is why the state will issue a revised budget in August. Based on current indicators, we are also estimating a 15% reduction in local revenues due to a significant drop in local sales tax. We are still awaiting the funding impacts to our categorical programs, such as the Student Equity and Achievement (SEA) program (formerly Basic Skills Initiative, Student Equity, and Student Success and Support Program funding). Although the “hold harmless” provision of the Student Centered Funding Formula (SCFF) will be extended past FY21/22, the funding rate is lower than the current hold harmless level.
For all these reasons, our updated projections show a reduction of $27 million in revenue when compared to the current year, which would result in an approximately $35 million deficit and bring our reserve below the required 5% - and there is too much at stake to let this happen. The Mid-Term Accreditation report is due in October, and this would trigger FCMAT review and Special Trustee intervention. It would also jeopardize our ability to fund Proposition A, the $845 million bond recently passed by the voters of San Francisco.
To put the reduction of revenue in perspective, our tentative revenue projection for FY20/21 is approximately $163.5 million, which is even lower than the 2008/09 Unrestricted General Fund amount the College had during the Great Recession. (To clarify, U-fund dollars can be spent without restriction, whereas categorical funds which can only be used for specific purposes).
While there is some uncertainty about the final budget figures for next year, we cannot wait to take action - and the best action to take is to be decisive now.
What it will take to maintain a 5% U-fund Reserve
Even if we are successful in our advocacy efforts for additional revenue and debt relief, we will still need to make significant cuts to the budget. More than 90% of our U-fund budget is spent on employee compensation, which means that in order to achieve a 5% reserve for next fiscal year, we will need to undertake a combination of the following:
- Freeze all salary increases
- Implement furloughs or other compensation reductions for all employees
- The FY20/21 salaries for Senior Vice Chancellor Tom Boegel and I will not only remain at the current level (the Senior Vice Chancellors did not receive a pay raise in the current fiscal year) but will also be reduced next fiscal year by 12 furlough days.
- Further reduce the schedule from 1200 FTEF to 1100 FTEF
- Initial work on the 2020-21 academic year schedule was based on a budget of 1200 FTEF, leading to a reduction of approximately 800 classes.
- A schedule with 1100 FTEF would result in an additional 450 classes being eliminated.
- If we are not able to negotiate the required salary concessions from our constituency groups, we will be forced to furlough or lay off more employees and potentially drop down to 900 FTEF, which would be a catastrophic blow to our community. I will be working with all our labor leaders from the AFT, SEIU, Buildings and Trades, Local 39, Department Chair Council, and our Administrators Association to discuss next steps. Because Fall 2020 registration is currently underway, we hope to reach agreements with all our employee groups by mid-June to avoid further reductions in the schedule for registering students and more layoffs.
We will also pause all hiring except for the Senior Vice Chancellor for Facilities, a position for which we continue to recruit. While recruitments for various positions are underway, no job offers will be made until we can assess the hiring impact to all funds. The Board will also continue to recruit for an Interim Chancellor to be effective July 1, 2020.
May 28 Board Action
We will be presenting the budget projections and the impact on the College’s educational program and services at the upcoming Thursday, May 28 full Board of Trustees meeting. We will need to make changes to the currently published Fall schedule to reflect our budget situation. I encourage everyone to attend this meeting and want to remind the community that you can submit questions and comments up to 30 minutes before the meeting begins.
Again, while there is some uncertainty about the final budget figures for next year, we cannot wait to take action, and the best action to take is to be decisive now. We will send out additional updates as soon as there is more information to share, and I truly regret that I have to be the bearer of this difficult news. But I know that together we are strong, we are dedicated, and we are focused – and we will get through this.
Dianna R. Gonzales
City College of San Francisco