Feather River College's Sept. 16 board meeting continued to focus on cash flow problems caused by the state of California's failure to pass a budget.
Chief Financial Officer Jim Scoubes asked the board to authorize him to secure a loan from Umpqua Bank. That request followed on the board's loan request to Plumas County for nearly $5 million as an advance on the college's tax revenue.
Scoubes said the bank was positive about a loan. The Umpqua loan is a back-up for the pending loan request to the county. Scoubes saw several problems with that request, including the county's own financial woes.
In addition, the Tax and Revenue Anticipation Notes loan problem must be overcome. Accepting a TRANs loan means promising not to take any other county funds.
FRC's way around that restriction was to term its request to the county an "advance," rather than a loan. Scoubes was somewhat skeptical about the likelihood that this would fly.
Even if the county loan is approved, it appears the process won't make it through the county machine until mid-October at the earliest.
Board president Bill Elliott preferred FRC get county money rather than take out a bank loan. Scoubes said he couldn't afford to wait "to see what the county will do. The best-case scenario is that it will take three weeks to get the money. We'll be awfully close to being out of cash by the end of October."
In a roll call vote, the board - missing member John Sheehan - voted unanimously to support the loan request, authorizing Scoubes and college president Dr. Ron Taylor to negotiate a loan with the bank for not more than $6.5 million. The college hopes interest on the loan will be prime plus 1.5 percent. The loan would expire at the end of the current fiscal year, June 30, 2011.
Taylor also submitted to the board a letter he sent Governor Schwarzenegger and members of the state Legislature regarding the cash flow crisis, a statement of how the state budget crisis is forcing a greater crisis in the county.
After observing the college would run out of operating funds in October, he placed the blame on state officials, citing a lack of reliable funding since July 1 this year.
Taylor also explained the college's efforts to obtain bridge funding through an "advance" from the county, which is also strapped for cash.
He said, "If the state budget impasse persists, and if Feather River College is forced to stop payments to its faculty, staff, and service contractors, this will be an economic catastrophe for our local community, which is already reeling from the effects of a severe, two-year-old recession."
Acting on a request from the board at a previous meeting, Taylor also presented a report of cost saving measures FRC has, or is in the process of, implementing.
Some cuts will not realize immediate cash savings. Instead, they decrease future costs based on future needs, such as programs to meet increased student numbers.
Others are specific cash flow reductions. At the end of the 2009 fiscal year, Taylor recommended 306 cost saving proposals, the bulk of them to categorical programs, not general fund programs. About 169 were implemented for an initial savings of $350,000.
Taylor said a new strategic plan and a fresh approach to budget development is essential to achieve cost savings and promote planning. The 2010 - 11 budget projected a shortfall of $989,000.
Suggested major reductions included more cuts in course offerings and attrition in faculty positions. Taylor considered each of 27 openings to determine whether it could be eliminated or made part time.
In many cases, hiring was delayed, which saved months of salary outlay, others were delayed and "backfilled," while some employees were not replaced. Faculty positions were replaced with lower paid associate faculty members.
Following that process, the budget committee reviewed the budget, carefully looking for additional savings. As a result, FRC had an $800,000 savings against planned costs, and actual cash on hand savings of $500,000.
Greenville hosts basketball tournament
Walker Myers makes the layup during Greenville’s game against Providence Christian last Friday. The Indians won 46-30 before continuing on to play two more teams...Read More...
Greenville pumped for successful season
Dominic Potts gets ready for the layup during one of Greenville’s games last season. The Indians had their best season in 10 years and hope to...Read More...
The fish are still jumping
Feather Publishing 12/6/2013 Jadyn Conover shows off the catch he got at Bucks Lake two weeks ago. The fish were taking the bait for this young man...Read More...