Did you know?
Last year at this time Palomar College’s financial picture seemed particularly dire, having a $11.7 million deficit. But thanks to some smart moves by the campus Unions, better budgeting processes instituted by the District, and a lot of budget padding in the first place, it seems that the college is actually “in the black.”
Facts:
Last year at this time we were told that we were running a $11.7 million deficit, and FCMAT was brought in as we were supposedly on the brink of insolvency.
PFF protested this assessment by pointing out that the budget is not only rolled over, but done so with padding in the forms of 1) setting aside money for unfilled positions 2) “contingency funds” that were not well explained.
The actual budget, when adjusted for poor accounting processes, was running at about a $5.5 million deficit.
PFF and CCE negotiated an early retirement notification, which cost the District only a very small amount of money while netting savings from about 40 retirees - faculty, staff, and administration. This provides substantial and continuous savings.
PFF and CCE negotiated a change to health benefits that this coming year is set to save the District $1.1 million dollars (starting 3 months into the fiscal year) and as much as $1.6 million in ongoing savings.
Reduced required employee contributions for STRS and PERS this year also helped.
Our current budget has salaries and benefits at approximately 87% of revenues, not the 94% that FCMAT warned us of. This is solidly in the range that the District had thought would take multiple years to achieve.
The District did some cost savings of its own, such as lower energy costs due to the pandemic and other longer-term savings.
The District continues its promise to be upfront about its budget process and share information openly with the campus community. PFF appreciates this as it allows us to ask questions and provide information that comes our way through CFT.
We remain cautious, only because the District tends to take a “worst case” scenario when budgeting. While in theory it might seem sound to budget with a conservative bent to the numbers, this leads to continually high estimated expenditures which do not materialize and engenders mistrust.
The District is forecasting a small surplus in the budget for 2020-21 without borrowing from any internal funds.
Bottom Line:
We are pleased, as is everyone, that last fall’s often-warned dire fiscal predictions never occurred. We will continue to follow the budget process closely and keep our own numbers alongside the District’s, as well as ask the hard questions of the District. We hope this approach continues yielding sound numbers as well as give us a better sense on how to conduct negotiations. We look forward to the continuing transparency in budgeting of the District.