Enrollment of full-time equivalent students (FTES) increased 6 percent during the summer session and 5 percent during the fall quarter at the Foothill-De Anza Community College District. The state was unable to address the rapid growth in numbers of community college students, which resulted in 1,700 unfounded FTES.
"When we deal with unfounded FTES that means the state has not paid for them and we are unable to support them," said Vice Chancellor Mike Brandy, who added that the district had to absorb $1.4 million in support programs. "We had enough money in the ending balance to cover this, but we will have looming problems ahead of us."
The ending balance in the general fund on June 30 was about $19 million. Of that amount, portions were used to meet the 5 percent reserve target, purchase orders and departmental carry-overs. The adopted budget for 2002-03 reflects a forecasted operating deficit of about $5.1 million.
Strategies to address this deficit include an orderly discussion of the target for reduction and actual cuts needed to balance the budget, Brandy said.
Federal changes in visas created a decrease in nonresident students as well as a decrease in funding by about $615,000. Nonresident revenue is not turned over to the state like regular tuition.
Measure E for $248 million in general obligation bonds was approved by voters in November 1999, and the first $100 million was exercised in June 2000. In October 2002, the district refinanced the bonds to take advantage of lower interest rates. This action resulted in additional income to the Measure E bond program. It is expected that the second installment of bonds to be issued will occur in late 2003 or early 2004.
The initial planning phase of Measure E is in full swing. The first major new building (the Science Center at De Anza) is under construction, and the next 24-month period will be the most intense period of planning and construction during the Measure E program.
"The governor's budget in January can revise a lot of things with shortfalls, but there is a lot of uncertainty before the end of the year," Brandy said. "It appears the state will operate at a $21.2 billion deficit next year and for years will be at a $16 million deficit."
Brandy said one large concern about the state budget is that a number of one-time funding sources were used to balance the 2002-03 budgets, leading to speculation about midyear reductions as well as significant reductions in the 2003-04 allocations.