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Agenda Item (IV-D-3)

Meeting5/7/2013 - Committee
Agenda ItemCommittee - Resources (IV-D-3)
SubjectAdoption of Education Protection Account Funding and Expenditures
Funding N/A
Recommended ActionIt is recommended that the Board of Trustees approve the proposed use of the estimated $20,365,183 of Education Protection Account proceeds resulting from the passage of Proposition 30 to partially fund instructional salaries and benefits.

Background Narrative:

Proposition 30, The Schools and Local Public Safety Protection Act of 2012 passed in November 2012. This proposition temporarily raised the sales and use tax by .25 cents and raised the income tax rate for high income earners ($250,000 for individuals and $500,000 for couples) to provide continuing funding for local school districts and community colleges.

Per Proposition 30, a community college district has the sole authority to determine how the moneys received from the Education Protection Account (EPA) are spent, provided that the governing board shall make these spending determinations in open session of a public meeting of the governing board and shall not use any of the funds from the EPA for administrative salaries and benefits or any other administrative costs. Furthermore, each entity receiving funds shall annually publish on its Internet web site an accounting of how much money was received from the EPA and how that money was spent. Additionally, the annual independent financial and compliance audit required of community colleges shall ascertain and verify whether the funds provided from the EPA have been properly disbursed and expended as required by law. Expenses incurred to comply with these additional audit requirements may be paid from the EPA.

In March two things occurred: 1) the District received the State Apportionment report that provided an estimate of $20,365,183 that our District may receive from the EPA; 2) a copy of a new report that will be added to the CCSF-311, Annual Financial & Budget Report regarding the EPA funds was received.

Since we now have the information needed to make a spending determination, we are submitting this agenda item to comply with the Proposition 30 provision requiring the governing board to make the spending determination in an open session of a public meeting of the Board of Trustees. The estimated EPA funds that our District will receive are $20,365,183 and the entire amount will be spent on instructional salaries. The EPA funds are NOT additional funds but rather are components of the appointment “computational revenue” calculation.

The attached form identifying this $20,365,183 as proceeds from the EPA and the District’s intent to use these funds to partially fund instructional salaries, will be posted to the District’s internet web site to meet the web site posting requirements. This same form will be updated at year-end with actual figures when provided by the State Chancellor’s Office and will be audited as part of the District’s annual financial and compliance audit.
Prepared By: Aaron Brown, Vice Chancellor, Business and Financial Services