Tensions flare over shrinking Foothill budget

Despite economic recovery, community college district faces growing shortfall

The Foothill-De Anza Community College District has been grappling with a shrinking budget at risk of getting a whole lot smaller starting next month, something that's causing tension between district officials and union reps over even a modest pay increase.

Last month, members of the district's Faculty Association -- which includes more than 1,000 employees ranging from teachers and counselors to librarians and instructional coaches -- announced it was at an impasse with district officials over salary negotiations, claiming that the district was unwilling to budge on even a one-time pay increase of 1.56 percent.

The association has since moved forward with a form of protest called "work to contract," whereby faculty cease any work done for the district outside of its contractual obligations. For teachers that means fewer office hours, no communication with students during off-hours and no club advising until negotiations are resolved.

Foothill-De Anza officials contend that the district can't afford to make any salary increases until they knows precisely how much funding it will hemorrhage over the 2018-19 school year, which is determined by a funding formula still under intense debate and undergoing multiple revisions at the state level.

Foothill-De Anza is among the most well-regarded community college districts in the region, serving tens of thousands of students each year. The costs of its inexpensive classes are largely offset by state funding. But it's also one of the poorest, receiving significantly less per student than comparable community college districts in Santa Clara County. Couple that with declining enrollment and uncertainty over the upcoming 2018-19 state budget, and the district could be setting itself up for a $17.6 million budget shortfall next year.

Both Faculty Association representatives and district officials agree that the troubling budget projections and hazy financial future are worrisome, and that staff layoffs are on the horizon starting in July 2019. But the union hasn't backed down on its stance, demanding a 1.56 percent salary increase this year, even if it's just a one-time pay bump that vanishes next year, according to Kathy Perino, chief negotiator for the Faculty Association.

"For negotiations, it seems that the budget issue has limited our district's willingness to be flexible at all," Perino said shortly after a fruitless May 16 negotiation meeting.

The association's salary schedule spells out monthly pay for faculty ranging from $5,706 to $10,594, depending on education level and tenure. But the vast majority of the staff only receive 10 months of that pay, meaning many employees are settling for pay significantly below the median income in the area and are in a tight financial bind. Data provided by the association shows that since the 2008-09 school year, the Faculty Association had five straight years of no pay raises, followed by modest increases ranging from a low of 0.6 percent in 2016-17 to a high of 3 percent in 2015-16.

With the cost of living as high as it is, Perino said many of the newer staff members for the district are struggling, living in areas like Gilroy and Livermore and driving multi-hour mega-commutes from places like Modesto. It's also made it increasingly tough for the district to attract talent with salaries that don't offset the cost of living at all.

"When you get the top people and they have an offer from us or a college in Sacramento or an offer from somewhere that's a decent place to live and not next to Google, they take that job," she said.

A budget in limbo

District officials have been unwilling to back down on their position, which is to hold off on any salary changes until the instability of the upcoming 2018-19 state budget finally settles. Vice Chancellor Kevin McElroy told the Voice that it's extremely unusual to see so much still up in the air for community college funding this late into the fiscal year, and that he has never seen so much uncertainty throughout his 34 years in the field.

"We very honestly, as a system, community college districts up and down the state, are in complete ambiguity in terms of what (the budget) is going to look like," he said.

If the state's so-called apportionment funding for the 2018-19 year doesn't change from last year, McElroy said the district could be facing a budget shortfall of $17.6 million, which would eat into reserve funds and require significant cuts including layoffs starting in 2019. But if the governor's proposal to freeze apportionment funding at 2017-18 levels and give community college districts a 2.71 percent bump in one-time funding goes through, that could represent a massive swing of $11 million toward putting the district back in the black.

"The enacted version of the budget tends to stay very close to what the May revise proposes," he said. "There might be some minor edits or adjustments to particular items, but not a complete overhaul or a complete rejection of the concept, which is what happened this time around."

With so much at stake, McElroy said it's unfortunate that the Legislature and the governor are still at odds with one another on community college funding so late in the game, and that it would be irresponsible to commit to salary increases for its staff with so much money hanging in the balance.

These standoffs at the state Capitol are particularly challenging for Foothill-De Anza, which has a budget that revolves around how many students it serves. Unlike the neighboring San Mateo County Community College District and West Valley-Mission Community College District, which are fully funded through property tax revenue, Foothill-De Anza still relies on full-time equivalent students (FTES) for state funding. As the district's enrollment declines -- which it has been doing at an accelerated rate -- the apportionment funding shrinks as well, leaving the district with fewer dollars each year.

Being strapped for cash at a time when property tax revenue is going up between 6 and 7 percent each year is an unusual situation entirely fueled by the district's size, McElroy said. Recent losses in enrollment notwithstanding, he said the district still serves an extraordinary number of students compared to San Mateo, West Valley and San Jose Evergreen community college districts, meaning there fewer dollars to go around. McElroy estimates that the district gets about $5,150 per full-time student per year, whereas comparable districts in the area get closer to $7,500 or $8,500.

Past funding, future concerns

The decision by union members to "work to contract" and pare back non-essential work came after the Faculty Association, acknowledging the budget insanity at the state level, approached the district with what representatives felt was a solid compromise.

Given the worries over future budgets, Perino said that the association was willing to compromise and settle for a 1.56 percent raise as a one-time pay bump -- rather than scaling up the salary schedule in the contract -- which would assuage future fears and cost the district an estimated $1.2 million. She said she entered negotiations in mid-May with high hopes, thinking the conversation would center around the size of the one-time raise, rather than whether it would happen at all.

Leaving the meeting with no resolution meant the threats of work to contract got an early start, and students began receiving automated emails during off-hours from teachers notifying them of the Faculty Association's stance and encouraging them to reach out to the chancellor's office before the spring quarter ends on June 29. The union hasn't used work to contract for more than a decade, during a similar standoff in 2005, but later calling it off. Perino said she suspects a lot of staff don't even know what the decision entails.

Faculty Association President Tim Shively said he would describe the move less as a protest and more like a "withdrawal," showing how much uncompensated work faculty employees do each year. He said the move hopefully pressures the district to put an offer on the table, particularly when teachers ditch the practice of giving students add codes for classes during the first weeks of the fall quarter.

"When people find out we aren't going to add students beyond the cap of the classes, I think that they will begin to realize how extensive our contribution is," he said.

One of the central arguments by the Faculty Association is that the 1.56 percent raise is commensurate with a so-called Cost of Living Adjustment (COLA) provided by the state to Foothill-De Anza for the 2017-18 year. That money was provided for operations that end in June this year, and union reps argue that money is intended to be passed through to its employees rather than withheld over concerns about the future financial picture. Shively contends that the district office acknowledges that COLA money is typically passed onto its employees, but that the Faculty Association has had to fight for it every time.

McElroy said the increasing costs of salaries and benefits for the 2017-18 year, including automatic raises built into the salary schedule as well as rising retirement costs, more than offset the COLA money. He argues there's no obligation saying that state budget adjustments should be passed through to employee salaries.

"I'm not aware of any documentation, legality or education code that says COLA received from the state is required, or even should be, passed through in compensation," he said.

Although tough negotiations and differences of opinion are commonplace during debates over salaries, Perino said the lines of communication between the union and the district office used to be more open, and that the tight budget and uneasiness over the future has strained the relationship and made negotiations that much more difficult. Requests for information about the budget are met with a sluggish response -- or even an outright denial -- and district officials seem entirely uninterested in exploring other methods of compensation that may put less stress on the budget, she said.

It makes it all the more frustrating, Perino said, that the district is unwilling to increase salaries by an amount so small that it doesn't even come close to keeping up with the rising cost of living in the state.

"It's almost embarrassing how little it is, what we're fighting over," she said.

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