BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 965 (Leno) - Funding: San Francisco Community College
District
Amended: May 1, 2014 Policy Vote: Education 7-2
Urgency: Yes Mandate: Yes
Hearing Date: May 12, 2014 Consultant: Jacqueline
Wong-Hernandez
This bill meets the criteria for referral to the Suspense File.
Bill Summary: This bill provides the San Francisco Community
College District (SFCCD) with additional funding for the next 3
years, as specified, as the college works to restore student
enrollment and maintain accreditation. This bill is an urgency
measure.
Fiscal Impact:
Approximately $23.5 million (General Fund) in 2014-15, to
continue to fund SFCCD at 2013-14 enrollment levels despite
a 16% enrollment decrease. 2015-16 and 2016-17 costs will be
lower (though still in the millions, and possibly up to $20
million each year). The funding augmentation in 2015-16 and
2016-17 will depend upon SFCCD's enrollment in those years
compared to its 2013-14 enrollment.
Reporting requirements: Likely minor costs to the SFCCD to
report specified budgetary and accreditation information to
the Legislature, Governor, and Legislative Analyst's office.
Background: Existing law confers upon the Board of Governors
(BOG) of the California Community Colleges (CCC) the ability to
prescribe minimum standards for the formation and operation of
community colleges and exercise general supervision over the
community colleges (Education Code � 66700 and � 70901). As
such, regulations have been adopted to require each community
college within a district to be an accredited institution - with
the Accrediting Commission for Community and Junior Colleges
(ACCJC) determining accreditation.
Existing law requires the BOG to develop criteria and standards,
in accordance with specified statewide minimum requirements, for
the purposes of making the annual budget request for the CCC to
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the Governor and the Legislature and allocating state general
apportionment revenues, including, among other things, a
requirement that the calculations of each district's revenue
level for each fiscal year be based on specified criteria with
revenue adjustments being made for increases or decreases in
full-time equivalent students (FTES) for specified purposes.
Existing law provides a year of stabilization funding, during
which the district receives at least the same funding for
enrollment as the previous year (even if enrollment declines) or
higher funding (up to an allowable cap) if enrollment increases.
This is because a district usually does not know that its FTES
count has declined until it begins its enrollment counts, which
occur at the same time the state is disbursing funds and after
the district has hired faculty and determined its class
schedules. If enrollment declines beyond just one year, the
district's revenues are reduced by the decrease in its FTES.
However, those reductions are restored if enrollments increase
during the subsequent three years, providing a district with a
buffer against fluctuating enrollments.
(Education Code � 84750.5 et.seq.)
Proposed Law: This bill, an urgency measure, provides the SFCCD
with additional revenue over the next 3 years. Specifically,
this bill:
1) Requires as a condition of receiving additional revenue
that the following conditions are satisfied: a) The CCD or
a campus of the CCD is in imminent jeopardy of losing its
accreditation; and, b) the BOG has exercised its authority
under current law, as specified and under Title 5 of the
California Code of Regulations, as that regulation read on
April 15, 2014.
2) Requires the BOG to provide revenues to SFCCD if the number
of FTES decreases from the number served in the 2013-14
fiscal year as follows:
a) For the 2014-15 fiscal year, an amount not less than the
total amount that was received for the attendance of FTES
in the 2013-14 fiscal year.
b) For the 2015-16 fiscal year, an amount not less than 95%
of the amount received for the attendance of FTES in
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2013-14.
c) For the 2016-17 fiscal year, an amount not less than 90%
of the amount received for the attendance of FTES in
2013-14.
1) Makes funding contingent on specified Fiscal Crisis
Management Assistance Team findings relative to fiscal
controls, systems, plans, and accountability, and on
specific compliance measures.
2) Requires the Chancellor of the City College of San
Francisco (CCSF) to submit a specified report to the
Legislature, Governor, Legislative Analyst's Office, and
Department of Finance by April 14, 2015.
3) Requires the CCSF Chancellor to submit report updates by
October 15, 2015; April 15, 2016; October 15, 2016, but
only if this bill's funding augmentation is provided; and
April 15, 2017, but only if this bill's funding
augmentation is provided.
Staff Comments: This bill seeks to provide additional revenue to
the CCSF to further stabilize it and assist it in retaining
accreditation. Accreditation has been terminated by the ACCJC,
but the CCSF has appealed that decision. The appeal will be
heard by an appeals panel on May 20, 2014. The CCSF remains an
accredited institution during the appeal process, but enrollment
has continued to drop since 2012, when the ACCJC first put the
college on "show cause" (prove why the accreditation should not
be revoked) status. According to the CCC Chancellor's office,
CCSF has made significant progress toward meeting the more than
300 goals it identified to improve effectiveness and has hired
new key administrators.
Student enrollment has, however, dropped by 30%; 16% of that
drop has been in the past year. This bill proposes to fund the
SFCCD in 2014-15 as if that 16% drop had not occurred, which
would cost an additional $23.5 million (General Fund). That
money would either be diverted from other CCCs throughout the
state, creating cost pressure to keep them whole, or would have
to be specifically appropriated from the General Fund to SFCCD.
The bill declares the Legislature's intent to be that "any
amounts necessary to make the apportionments required pursuant
to subdivision (b) be drawn from the state general apportionment
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revenues for community college districts."
The bill also sets out a funding augmentation formula for the
next two fiscal years: In 2015-16, SFCCD would receive an amount
not less than 95% of the amount received for the attendance of
FTES in 2013-14; and, in 2016-17, an amount not less than 90% of
the amount received for the attendance of FTES in 2013-14. The
level of additional funding would depend on the gap between
actual enrollment in those years and enrollment in 2013-14. If
enrollment were to fully rebound, then SFCCD would get its
normal FTES funding; if it were to continue to decrease, stay
flat, or to increase to an FTES level still less than (95% or
90%, depending on the year) of 2013-14, the state would use the
formula to determine an augmentation amount.
While this bill is limited to SFCCD, staff notes that three
other CCDs have experienced enrollment declines of more than 10%
from 2012-13 to 2013-14. This bill may create cost pressure to
stabilize their funding, as well, which would cost $12 million
to hold them harmless.