Responses To Recommendations

PAGE 8 OF 10

Recommendation Eight

Committee Membership

Dr. Tom Kimberling, Chair, Vice President of College Services
Robert Arce, Professor of Spanish
Ginnie Atmore, Fiscal Budget Tech
Richard Goff, Academic Senate President
Michael Gregoryk, Deputy Chancellor
Dan Kumpf, Instructor of Mathematics
Linda Rubenstein, Professor, Business, Coordinator, Off-Campus Programs

Recommendation Eight

It is recommended that the District and College leadership clearly define and communicate the allocation model to be implemented. The College should also adopt strategies that will implement the model to assure and maintain the fiscal stability of Ventura College. (1996 Standard 9A.2, Standard 10C.2, 10C.5)

Response

A. Background
The current allocation model in use by the District was developed through a shared governance committee, the District Council of Administrative Services (DCAS), and a sub-group of that committee, the Allocation Model Special Task Force. The Governing Board adopted the model in April 1997 in accordance with the Ten “Basic Principles” of the desired allocation process, adopted by the Governing Board earlier in July 1996. A description of the Allocation Model and the Ten “Basic Principles” are provided with the District’s Allocation Model Review Task Force Materials (R 8.1).

The original intent of the allocation model was to move away from an expenditure-based process and toward a process consistent with the methods by which the District receives its resources. Essentially the model was to be revenue-driven with the bulk of the allocations directed to the colleges based upon their FTES generation. The model further recognized the need to maintain a prudent reserve level, targeted at 5%, and provide for those services that could be performed most efficiently and economically through the operation of a District Service Center.

The model was first implemented for the development of the 1997-98 operating budget. To ensure that no college was financially disadvantaged by implementation of the new allocation process, a stabilization methodology was incorporated. In effect, any excessive gain in resources experienced by one or more of the colleges would be partially reduced to offset an excessive loss experienced by one or more of the other colleges. It was expected that this stabilization process would be gradually phased out over a three to four year period that was intended to provide a sufficient planning horizon for the colleges to adjust their level of operations consistent with their resource allocation.

The “Basic Principles” provided for an annual review and modification of the model as necessary to recognize current economic conditions and contemporary operating activities. DCAS was charged with the responsibility to annually review the model and recommend any changes to the Chancellor’s Cabinet.

It was expected that moving to a revenue-based allocation process would encourage flexibility and autonomy at the colleges. Although this latter expectation has been realized, the allocation methodology itself has forced Ventura College to take significant steps during the past several years in order to maintain an operating level sufficient to provide for modest FTES growth. The actions at Ventura College result from the inability to maintain FTES growth rates consistent with that experienced by Moorpark and Oxnard Colleges. Over the past three years, Moorpark College has generated 52.4% of all FTES growth, Oxnard College 27.9% with Ventura contributing only 19.7% of total growth. At the same time, Ventura College represents about 35% of the Districts’ total FTES base. With approximately 80% of all resources allocated to the colleges based on FTES it becomes readily apparent that Ventura College’s share has been declining proportionately over the past several years. This has created a financial strain, resulting in budget cuts and in the elimination of several vacated positions in all employee groups.

During the past three years, DCAS has recommended modifications to the model to provide supplementary resources to Ventura College. The first was a $580,000 loan that was subsequently incorporated into the model. The second was the result of a 2001-02 task force review of the model (R 8.2). The outcome of that review was a reduction in District reserves by $1 million, which was then split equally between Ventura and Oxnard Colleges. The most recent and dramatic modification occurred during the current year when nearly $1.3 million in supplementary reserves, $300,000 in bookstore fund balance, and $253,000 from Moorpark College was redirected to Ventura in order to balance its budget? a budget that had already been cut in excess of $1.2 million. It had now become evident district-wide that the allocation model needed to be revised.

B. Current Status
To address the issues of the Allocation Model and Ventura College’s budget situation, two independent activities have been initiated. First, the Chancellor has convened a shared-governance Allocation Model Review Task Force. This group is represented by the DCAS membership augmented with District administrative officers, including the Chancellor and five additional representatives from each college. The expanded college representation includes the Presidents, Executive Vice Presidents and faculty and staff members. The Task Force first met on October 3, 2002. The Chancellor charged this body to recommend modifications to or replacement of the current allocation model by January 2003. Second, the Ventura College President has convened monthly campus-wide open forums to review and discuss Ventura College’s budget status. The first meeting was held on September 19, 2002. The President has asked those attending these meetings to provide advice on acceptable measures to be taken to either a) increase resources, and/or b) identify economies and efficiencies to reduce costs. A copy of the materials distributed and discussed by both of these groups is provided as R 8.1 and R 8.3.

After its second meeting the Allocation Model Review Task Force charged a sub-group comprised of the colleges’ Vice Presidents of College Services and District financial staff to examine changes to the current model that might provide more equity in the distribution of resources. This group met several times during the first half of November and developed revisions to the model that retained the Ten Basic Principles, yet proposed changes in the model’s formulas that recognized the operating constraints the current model was imposing on both Ventura and Oxnard Colleges. For example, it was discovered that over time the resource allocation driven by FTES had grown disproportionately larger than the initial expectation (nearly 80% as noted above). It was further determined that the “one-time” equalization allocations to Oxnard and Ventura of $500,000 each was a necessary on-going requirement if the colleges were to maintain a realistic operating base. These factors and several others were considered in drafting a proposal that was presented to the complete Task Force in late November. That proposal recommended suspension of the Allocation Model for development of the 2003-04 budget and maintenance of the 2002-03 budget levels for the colleges and District Office. From this base level each location would then be required to implement additional reductions to absorb a projected $6 million shortfall for 2003-04. The individual reduction targets were based on projected increases in salaries and benefits consistent with each location’s current staffing patterns.

The recommendations were presented to the task force on November 21, 2002. The task force questioned the rationale for the recommendations and requested additional time to review the materials distributed and the recommendations with their college constituents. The Chancellor agreed with the requests and directed the task force to reconvene on December 5, 2002.

At the December 5 meeting a concern was raised that the task force had not been provided all the simulations that the smaller group had reviewed which led to their conclusions and recommendations. It was agreed that District staff would provide the membership with the materials developed by the sub-group. This information was to be shared with the campus and a new sub-group of Vice Presidents, Academic Senate Presidents, Deputy Chancellor and District fiscal staff were to meet on December 19 to attempt to arrive at consensus on the allocation methodology for distribution of 2003-04 funds and projected shortfalls.

During this same period of time, three additional campus-wide budget forums were conducted. At each meeting, the current status of the state, district and college budgets were reviewed. At the December 12 meeting, the group as a whole approved, by consensus, the suspension of the current Allocation Model for development of the 2003-04 budget and directed its representatives appointed to attend the December 19 district meeting to present this recommendation.

It was also agreed that the Campus Resource Council and the College’s shared governance budget committee would be reconstituted in January 2003 and charged with the responsibility to examine the current budget in detail and recommend both guidelines and actions to reduce the College’s budget by an additional $2 million for the coming year.

At the December 19 district meeting both Ventura and Oxnard Colleges presented similar recommendations to suspend the current allocation model for 2003-04 budget development. Moorpark College was in disagreement. A subsequent meeting was scheduled for January 9, 2003 in a final attempt to reach district-wide consensus. At the January 9, 2003 meeting consensus was reached. It was agreed:

a. The allocation model would be suspended for development of the 2003-04 budget;
b. Distribution of any resource changes above or below the 2002-03 level would be allocated to the colleges in accordance with their relative share of the 2002-03 budget; and
c. Each college would be responsible for absorbing their actual increased costs for 2003-04 within this base allocation. The Chancellor agreed to present the recommendation to the Board of Trustees at their scheduled January 24, 2003 retreat.

C. Plan
Although there remains a degree of controversy and contention among the colleges as to the appropriate method for allocating resources for 2003-04, the Ventura College community, through the monthly budget forums, now has a clear understanding of the budget process and the fiscal issues facing the state, district and the College. And with this information, the College Budget Committee, the Academic Senate and the Administrative Council are realistically preparing for 2004.

Recommendation Eight List of Documents

R 8.1	District's Allocation Model Review Task Force Materials
R 8.2	2001-02 Allocation Model Review Task Force
R 8.3	Ventura College Budget Forum Materials

 

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