City College of San Francisco could be on the brink of insolvency because of high spending that is at odds with ongoing funding cuts from the state level, according to a financial review of the school released Tuesday.
The report by the state’s Fiscal Crisis & Management Assistance Team, tasked with providing financial assistance to California school districts, states that City College “has provided salary increases and generous benefits with no discernible means to pay for them.”
The report was released prior to Tuesday’s meeting of City College’s Board of Trustees and said that the school is at “a point at which it must either make significant and ongoing budget adjustments or face the prospect of insolvency and possible state intervention.”
Among its findings, the state agency reported that City College employs about twice as many full-time faculty as its similarly sized community college peers.
The school is also basing its budget on the assumption that local and state tax measures will pass and “has not developed a plan” to deal with the $11.5 million budget deficit that would occur if they both fail, the report states.
The state agency also found that City College’s contracts with its labor unions “may not be sustainable in this economic environment.”
Provisions in the contracts include providing full health and welfare benefits to part-time employees, giving 23 paid holidays per year and the ability to earn 22 days of vacation per year after 10 years of service at the school.
The state agency recommended that the school be “more aggressive in reducing its expenditures,” which it called “challenging but … essential to avoid insolvency.”
City College spokesman Larry Kamer said the school “is facing profound challenges concerning budgetary and structural issues.”
Kamer said, “We recognize the magnitude of the crisis and are developing and deploying specific action plans.”
He said the school “has no choice but to take action. Some of it will be painful, but we are absolutely committed to keeping City College operating for our students and for our community.”
Along with its financial problems, the school is also facing issues over its accreditation.
City College was placed on “show cause” status in July by the Accrediting Commission for Community and Junior Colleges, which cited problems with the school’s governing structure and facilities, among other issues.
The school is required to submit by Oct. 15 an action plan outlining how they will address the problems. That report will be presented to the trustees and discussed at their next meeting on Sept. 27, Kamer said.
Dan McMenamin, Bay City News