GILROY, CA - The year was 2006 and Gavilan College President Steven M. Kinsella was addressing the staff and faculty of the small community college: “We just saw our budget from the state for next year, and I can tell you this is the BEST funding community colleges have ever seen. Which means one thing – its time to start preparing for the downturn, because we know its coming.” He then laid out the steps the college would need to take to be prepared for the difficult times he envisioned, just over the horizon.
Fast forward to 2011. The California State Legislature is wrangling over a budget, and predictions are dire. Community colleges have had their budgets cut for the past three years. Schools around the state are predicting layoffs, furlough days, and reduced class offerings on a devastating scale.
At Gavilan College, however, there is no sense of panic. Gavilan College is planning to hire fulltime faculty and increase class offerings for the fall. Despite the past three years of recession and impending budget cuts, the college is solvent and has enough in reserve to weather the worst-case scenario from the state– an all-cuts budget. This worst-case scenario could mean a loss of $4 million in funding, but President Kinsella is not worried. In a memo to staff and faculty, he explained why Gavilan College is not in the precarious position of so many other institutions.
“Long ago” Kinsella’s message reads, “the Gavilan College Board of Trustees established policies that gave them control over the finances of the college.” Kinsella believes these policies are replicable and could help other public agencies maintain budget health through the cycles of the economy.
The policies include being proactive on obligations by tackling the issue of retiree health benefits head–on. “We established a $6.2 million irrevocable trust fund to cover the costs of retired employees who are receiving medical benefits.” Because there is now more in the fund than is needed to cover the currently retired employees’ entitlements, “some of the difference is being allowed to grow as a long-term investment. Under the worst of conditions we can access this fund.”
The college was also proactive in managing staffing levels. With the funding windfall in 2007-2008, “we hired more full-time permanent faculty and professional support staff than was required by the state. As employees retired over the past two years we did not fill those positions, allowing us to save money and use it to offset the reductions in revenues we were receiving.” The college still has some leeway for attrition, with six more positions than are required.
A bond measure passed in 2004 provided the funds to renovate buildings with energy-saving equipment, leading to long-term savings in utilities, maintenance, and repairs. The bond measure also allowed