The Hancock College Board of Trustees unanimously voted Sept. 12 to approve the district's $61 million budget, which includes a $2.9 million increase in expenses, for the 2017-18 academic year.
"What we came off of is a really good year," said Michael Black, vice president for finance. "We got base funding of over $1 million, a [cost of living adjustment] and maintained our midsize college status."
An increase in base revenue from the state adds roughly $1.3 million to the district's budget while a 1.56-percent cost-of-living increase helps cushion their bottom line by approximately $760,000. When factoring in a projected deficit of 2.5 percent, administrators anticipate an overall $1 million increase in revenue.
Expenses, however, have grown at a higher rate when compared to 2016. Black said the $2.9-million increase in expenses is largely related to additional costs for faculty and staff. The multimillion-dollar financial blueprint for the college’s unrestricted general fund features a 9-percent increase in classified employee salaries, 3.6-percent increase in academic salaries and a 6.4-percent increase in staff benefits.
According to Black, revisions to the California School Employees Association contract and increases in salary schedules for supervisory and classified employees factor in to the jump in expenses. Changes to the California State Teachers Retirement System and California Public Employees' Retirement System also contribute to the rise. Overall, salaries and benefits for academic and classified staff account for roughly 82.9 percent of the unrestricted general fund -- down slightly from 84.2 percent in 2016.
Last year, Hancock reported $1.9 million in income -- a figure that is projected to barely top $23,000 this year. While the sharp decline would normally be a concern, Black said the nature of the college as a not-for-profit institution means it is of marginal impact.
"We’re a not-for-profit organization. Our goal is to not make income; we’re here to provide services for the community."
Hancock College President Kevin Walthers said having a balanced budget is good news, and applauded administrators for their savvy fiscal judgement.
"We have actually got a balanced budget without using any one-time funds," he said. "We’re not paying anyone on funds that won’t be available in the future. Having a balanced budget and having a second year where we’re in the position to do that again is a good thing."