A scare ran through the college when a former vice president declared a $ 6.8 million structural deficit earlier this semester. Interim Vice President of Financial Affairs Jim Austin lowered the collective blood pressure on campus when he said the college would have a balanced budget. He added, however, that a bumpy future might lie ahead.
Austin said the college’s low ending balance might not be enough to put out future fires.
“How much do you want to be counting trees instead of understanding the forest is burning down?” he asked the governing board.
Trustee Tim Nader ran with the metaphor.
“Right, but if you see the forest is burning down,” he said, “you need to get into what the causes are and we were told earlier this year that the forest was burning down.”
Austin added fuel to the fire.
“And if you look at the long term,” he said, “it might not be burning down, but you’ve got a lot of kindling building up.”
Trustee Griselda Delgado lit up.
“We also need to know where the water is,” she said. “I know the forest is burning. I want to look for the water. I don’t want to ask the wrong questions because I don’t want to micromanage, but we need to be educated in what questions to ask. I can see what (numbers are) going up, and which are down, but how do I know where to look for the water?”
Austin said Southwestern’s figurative forest is not burning yet, but warned that its ending balance is too small.
SWC’s FY10-11 ending balance covered several expenses in FY 11-12, a year when much of the college’s state funding was unexpectedly and severely reduced, said Austin. Sufficient “water” had been saved up by the college to douse the flames before a major conflagration.
Board members asked Austin to construct a five-year strategy to build up an ending balance comparable to other mid-sized districts.
“The goal not to spend every penny, every year,” said Austin. “It is to spend the money (we need to) but have a balance (for) next year and keep it for a rainy day.”
Projecting future budget years will involve systemic adjustments, said Austin. Nader agreed.
“As we all know, these numbers are pretty volatile from year to year,” he said. “This isn’t going to be set in concrete. When you are doing it, it’s not in the same sense as Stalin where come Hell or high water, we’re sticking to the plan.”
Austin said fluid situations such as government policy, economic variation, enrollment number and other variables determine how much state funding SWC will get. None of those numbers can be accurately predicted.
“The five-year plan is never set in concrete,” he said. “It needs to be a living document because situations change.”
Board members thanked Austin for his service and his insights.
Tim Flood, currently Grossmont College’s vice president of administrative services, is expected to be ratified by the board on December 15 as SWC’s new vice president of fiscal services. He would begin January.