More than $13 million in reserves hot topic as budget woes continue to impact campus
San Joaquin Delta College’s reserve fund has grown to more than $13 million provoking controversy over how the money should be used.
According to Delta College President/Superintendent Dr. Jeff Marsee, the reserve funds, which currently stand at 12 percent — above the state-recommended minimum of five percent — are to be used for one-time costs and emergency purposes, such as the current situation.
“We’re not balanced now,” Marsee said in an interview, adding that Delta College is operating on a $3 million deficit budget, using money from the reserves to cover operating costs.
The current controversy surrounds the next two years’ budget.
Delta College’s board of trustees has already approved a three-year budget plan which cuts more than $5 million in the next two years in an attempt to balance the budget.
This plan would keep the reserve levels close to the current 12 percent.
Marsee warns that without cuts, and by drawing increasingly on reserve funds to fill the budget gap, the college faces larger problems.
“If you’ve got all this money, why make any cuts? And the answer is because we run out of money after next year,” Marsee said.
Harry Mersmann, sociology instructor and campus California Teachers Association vice president, is unfazed by the claims.
“Since I have been here (1999), I have heard the cries of ‘no money!’ It feels a bit like Chicken Little crying ‘the sky is falling!’” Mersman wrote in an email interview. “For example, in 2010-11, they estimated an ending balance of 6.8 million, but ended with 13.2 million.”
When asked what he thought the reserves should be used for, Mersmann mentioned faculty salary increases, classified employee reclassification and the Delta Flea Market, stating that through use of reserve funds, the Passport to College program could be funded while letting the ASBG retain control over the market.
Marsee disagrees stating that issues such as salaries “are ongoing expenditures. These are one-time funds. When they’re spent, they’re gone. To try and deal with ongoing expenditures… with one-time funds automatically puts you into a deficit sooner or later anyways,” he said.
Marsee said the bulk in reserves is a sign of good budget management.
“It’s not an indication that we should be diverting funds to keep positions that we eventually would have to lay off anyway in order to balance the budget,” he said.
Marsee added that despite being above the 5 percent minimum reserve level, Delta College has many non-salary issues such as technology upgrades and offering more classes than those budgeted that would be more suited to the reserve fund’s one-time nature.
“Reserves are in themselves a good thing. They’re not just intended to be used to keep people employed, because we do have non-salary related issues that have to be addressed,” he said.