Budget

2024-2025 Budget Development

To systematically advance the Board of Trustee’s Ends Policies and the strategic priority of:

Organizational Effectiveness and Sustainability. The San José – Evergreen Community College District will develop and utilize systems that promote institutional effectiveness, fiscal sustainability, and accountability. 

Beginning with the 2024/25 budget development and on an ongoing basis, the District will rigorously evaluate all requests for new or replacement positions (Full-time faculty, classified professionals, and management/supervisor/confidentials), and requests for new or ongoing budget monies to perform additional duties using the following strategic priority rubric: 

• Promoting institutional effectiveness
  • Determining ‘need for staffing or budget monies for additional duties’ that promote student success and advances institutional effectiveness
• Fiscal sustainability
  • Determining whether there are ongoing budget monies to sustain staffing and additional duties decisions
  • Determining whether categorical or grant endeavors will be institutionalized should the funding cease
• Accountability
  • Hold District leadership accountable for data informed staffing and budget decisions that ensure ongoing fiscal sustainability  

The District will seek input, feedback, data and perspective from our governance committees and through our program review/viability assessment to advance the above Board of Trustees Strategic Priority.  

In accordance with the State Community College Budget and Accounting Manual and Board Policies, the Chancellor shall construct budgets, which he or she recommends to the Board, that prioritize funding that supports the accomplishment of the Board’s Ends Policies and Strategic Priorities. The Chancellor shall manage District affairs such that spending does not deviate materially from the budget approved by the Board. The Chancellor shall keep the Board informed of the District’s financial status and additional funding resources during the course of the year, and report on the relationship between funding priorities and progress on achievement of the Board’s Ends Policies and Strategic Priorities.

FAQ

Is the district planning layoffs or hiring freezes?

Neither is being planned at this time and the district is not applying either strategy to close the fiscal deficit.  Layoffs involve the involuntary separation of employment due to lack of work or lack of funds, whereas a hiring freeze can be viewed as a temporary suspension of current and future vacancies. Rather, the district is asking the leadership to make an informed decision with current and future vacancies to determine whether to proceed forward with filling positions. As an example, a custodial position would be critical to supporting cleaning and maintenance where new facilities/spaces are coming online. However, with the construction bond program winding down, a bond director is not essential to move forward with construction as the district has third party construction management companies and an internal employee who serves as bond construction manager. In both cases, the need to fill the position is tied back to the ends statement to focus on student success i.e. how is student success impacted without these positions?

Is the defunding of positions related to classified, faculty or management positions?

Both the colleges and district office are reviewing their individual position control master lists to determine (1) which positions are vacant, and (2) which position can be defunded without impacting operations, and the student learning experience.

Will staff be cut or furloughed?

There are no plans for layoffs or furloughs. Retaining current faculty and staff is one of the administration’s priorities.

Will compensation be cut?

There is no plan to reduce compensation.

What other initiatives are being reviewed for the current year deficit?

We are looking closely at all non-personnel expenses that are not tied to grant/categorical funding sources, including e.g. employee travel, non-instructional assignments, supplies, overtime.

Beyond FY2024-25, How will the district address the multi-year structural deficit?

The district and colleges are reviewing non-personnel expenses to look at potential savings. Some strategies may take a longer time to implement such as utility savings, reimagining revenue-generation sources (e.g. enrollment management).

What is a structural deficit and why can’t we use reserves?

A structural deficit exists when current-year recurring revenues are surpassed by current-year recurring expenses. In other words, cost is greater than revenue and thus we must move funds from our reserves to balance the budget. 
If we do not establish new resources to replenish funds, the net result is a reduction to reserves, which is unsustainable over the long run. As an example, imagine you earn $50,000 per year, but have $55,000 in expenses per year. You would have to dip into your savings account to cover the $5,000 difference. If you do not address the underlying gap between your income and expenses, over time you would deplete your savings account.

How can the district have a current year surplus but be structurally unbalanced?

Balanced budgets are based on ongoing revenues and ongoing expenses. When there are one-time sources or time-limited funding e.g. HEERF covid relief funds, assigning ongoing expenses to that funding source is unstable from a fiscal perspective.

Are faculty and staff going to be involved in helping the district come up with ideas for addressing our budgetary challenges?

Yes. We will continue to engage our campus community as we navigate these challenges. The district and college budget committees are providing input and ideas which we are considering.
Data ultimately will drive our decision-making. We will continue to share the latest information, and we will engage different groups across the district as appropriate.

Why not wait until the May property tax data point comes in before engaging in cost reduction conversations?

SJECCD has experienced a structurally unbalanced budget for some years which has been offset with helps from one-time revenues including higher property taxes. This is not a fiscally sustainable practice as deficit spending can have negative consequences e.g. ratings downgrade, accreditation fiscal standards etc.

How will these cuts impact the 2024-2025 course schedule? Will fewer sections be offered?

The focus is on closing the deficit through existing vacancies without impacting current employees. At this time, we anticipate being able to offer a regular schedule of classes without impacting students.

In 2008, the District Budget Committee established a set of principles for identifying budget cuts when necessary. Are we following these principles with the proposed cuts?

The District Budget Committee’s 2008 principles were developed prior to the District becoming basic aid and they were never approved by the Board of Trustees. The Board adopted its Ends Policies in 2017 and its Budget Principles in 2018.  It is these Ends Policies and Budget Principles that inform our current budget development process. Any principles that have not been Board approved would need to go through the Board review and approval process.

The amount of the deficit that must be made up by each college is based on FTES, but the revenue provided to each college is NOT based on FTES. Why is there is a discrepancy and why did the District decide to use FTES as a metric for the cuts when it does not use FTES as a metric for funding?

Currently, the colleges do not have full budgets i.e. the central services (Districtwide services such as utilities, insurance, etc.) are not allocated to the colleges. As such we do not have the ability to allocate the deficit based on operating budgets. Because the Districtwide services are not allocated back to the colleges, we cannot assess the true deficit by college. If the costs such as insurance and utilities were allocated, EVC would receive a higher share given its larger physical facilities.

 Why is there such a large discrepancy between the percentage of the total college general fund budget that is dedicated to salaries and benefits between the two colleges (approx. 97 percent at EVC vs. 92 percent at SJCC)?

SJCC receives more categorical grants than EVC and salaries can be charged to some of these grants. As such, this lowers the salaries on the unrestricted general fund (Fund 10) for SJCC, resulting in a lower percentage of the overall SJCC college budget going toward personnel costs.

What positions at the DO are being defunded?

A list of all positions that have been identified for defunding will be posted here by April 26.

Can the district increase lease revenue from the Evergreen Marketplace development to offset the budget deficit?

The District has a 60-year lease agreement with the tenant of the Evergreen Marketplace development that was executed in 2000 and expires in 2060. The agreement has specific provisions for when the lease rate may be adjusted as well as formulas for revising the lease rate. The District may not increase lease rates without violating the terms of the contract.

Has the District considered leasing space in the District Office or selling the building in order to generate revenue?

The District will take all options for cost cutting and revenue generation into consideration, however, leasing space at the DO or selling the building are not strong options at this time. Due to historically high post-COVID office vacancy rates in downtown San Jose, the amount of revenue we would be able to generate by leasing available space at the District Office would be limited and would likely not even cover the cost of administering the lease, let alone make up the short-term structural budget deficit. Additionally, because the building at 40 South Market Street was purchased with voter-approved general obligation bonds, using bond proceeds for the purpose of meeting short-term cash shortfalls in operating funds poses risks including the loss of the tax-exempt status for District-issued bonds, repayment of revenues generated back to the bond, downgrades in credit ratings, and the loss of public trust.

SJECCD Board of Trustees Budget Study Session 04.09.24

SJECCD District Budget Council 03.21.24

Budget Planning & Reports

​The Vice Chancellor of Administrative Services is responsible for preparation and presentation of the annual district budget to the Chancellor and Board of Trustees, and for overall management of the district budget throughout the year.

View our current and past Budget Planning Presentations & Reports