Coast placed on state watch list

Marisa O’Neil

The state chancellor’s office has placed Coast Community College

District on a financial watch list to more closely monitor its

operating budget.

Coast and a dozen other community college districts statewide were

on the list, released Wednesday by the chancellor for California

Community Colleges, that identified finically troubled districts.

Coast is listed as a Priority 3 district because its budget reserves

slipped below the 5% recommended by the chancellor’s office.

“We’re not in an emergency situation,” Coast Community College

District spokesperson Erin Cohn said. “It’s just indicative of what

we’re struggling with -- state budget cuts, rising health care

insurance premiums, state-mandated increases in the amount of money

we contribute into employee [retirement] accounts. The state has

shifted more of the burden onto us.”

Reserves dipped to 4% in the fourth quarter of the 2002-03 fiscal

year, Cohn said, prompting its status with the chancellor’s office.

Coast is one of nine districts -- Contra Costa, Glendale, Los

Angeles, Marin, Peralta, San Francisco, Victor Valley and West Hills

-- listed as Priority 3, those with the least serious problems.

“A Priority 3 district is not necessarily in imminent danger of

experiencing major fiscal problems,” the report from the chancellor’s

office said. “A Priority 3 district usually has an unrestricted

general fund reserve under 5% of total general fund expenditures, or

faces possible fiscal difficulty within 18 to 36 months.”

Ventura is listed as a Priority 2 district and Compton, Palo Verde

and Santa Monica are Priority 1. Priority 1 districts would likely

face immediate fiscal problems or have a reserve balance below 2%,

according to the report.

Last year, according to the report, the state community college

system sustained a $161-million reduction in funding from the state,

forcing many districts to dip into their reserves.

“It’s definitely a rainy day now,” Cohn said of using the

reserves.

Districtwide, 60 of 570 faculty members took early retirement

packages last year, Cohn said, helping to bring down some costs. Most

of the positions remain unfilled.

Orange Coast College has dropped about 1,500 classes over the past

couple years due to cost-cutting measures.

Coast Community College District recently agreed to sell pubic

television station KOCE-TV, which cost the district about $2 million

annually to operate, she said. When the first payment of $8 million

comes through, most likely in June, she expects problems to ease

slightly.

The rest of the $32 million selling price will be paid in a

long-term note.

No immediate action needs to be taken because of the district’s

status, Cohn said. Once Gov. Arnold Schwarzenegger’s proposed budget

comes out Friday, she said, the district will have a better idea of

how to proceed.

* MARISA O’NEIL is a reporter for Times Community News. She may be

reached at (949) 574-4268 or by e-mail at marisa.oneil@latimes.com.