OAKLAND, Calif., May 6, 2022 – As the Peralta Community College District (PCCD) plans for the next fiscal year beginning on July 1, 2022, we want to provide an update on our current financial status.
The colleges face many obstacles, including a significant deficit due to ongoing enrollment declines (which we are paring down) and a new state funding system (which we must comply with or face drastic actions from the State).
Amidst these challenges, the Peralta Colleges – Berkeley City College, College of Alameda, Laney College, and Merritt College – have made important progress in balancing the needs of students and community, while working towards fiscal sustainability. This includes making data-informed decisions that are necessary to end deficit spending and assure the district’s long-term financial viability to effectively serve students, employees, and our communities in the future.
Recent History
Across our nation, Institutions of Higher Education have been experiencing decreases in enrollment over the past few years. The hardest-hit has been two-year public institutions and the Peralta Community College District is no exception. Since the 2016-2017 fiscal year, the district has seen steady enrollment declines, similar to other community colleges across the state and nation. In 2018, the Peralta colleges’ accreditor, the Accrediting Commission for Community and Junior Colleges (ACCJC), placed the four colleges on fiscal enhanced monitoring because of deficit spending and other factors. In 2019, the Fiscal Crisis and Management Assistance Team (FCMAT) audited the Peralta Community College District, found the finances to be in a precarious state, and made over 70 recommendations in the FCMAT report published in June 2019. Because of a lack of progress to address the issues, ACCJC which accredits colleges, not the district, moved the four colleges to probation status in January 2020.
PCCD has been following up on the FCMAT recommendations and providing periodic reports to the ACCJC and the state chancellor’s office. After careful scrutiny, and noting sustained improvements in financial management and governance, the ACCJC removed the probationary status of the colleges in January 2022. The colleges are now on “warning,” a less severe sanction than “probation” indicating work is still needed to come into full compliance. Peralta remains on the right path to fiscal sustainability and full accreditation status, but the work must continue.
Academic Success
It is important to remember that the probation was due to financial and governance concerns, not academics. Indeed, the college academic programs continue to thrive, with each of the colleges receiving recognition and awards including:
These are just a few of the many recent honors bestowed on these East Bay colleges and it underlines how Peralta’s faculty and staff have worked together to do more with fewer resources. These honors are a testament to the hard work of the faculty, classified professionals, and administrators who are all committed to student success and completion. We value all individuals who work in the district, including full and part-time faculty and full and part-time classified professionals. When we hire people as full-time permanent employees, we want them to have long, fruitful careers of service to students and to our communities.
The Current Situation
Peralta Community College District is primarily funded by the state of California via the California Community Colleges Chancellor’s Office (CCCCO). Community colleges and districts, including PCCD, previously received funding based on the number of students served. However, the CCCCO is in the process of changing to a Student-Centered Funding Formula (SCFF), which is a blended formula based on the number of students served (70%), student financial need (20%), and student success - students completing degrees and certificates, and closing racial, equity, and income equity gaps (10%). Under this new funding model, essential to the Vision for Success, many colleges, including the Peralta Colleges, will receive less money from the state than in the former model. Thus, the state has created a “hold harmless” period preserving the current funding level (of the previous model) to give districts and colleges time to adjust their budgets to adapt to the new funding formula. As a colleague said, “It used to be that the only financial incentive was for us to grow, but now we have an incentive to serve different types of students. It makes sense to tie goals to the financial underpinnings of the system,” and that is the intent of the student-centered funding formula.
If the Peralta budget is not balanced when the switch is made to the new SCFF, drastic action would be needed to prevent deficit spending up to and including layoffs, which no one wants to happen. Therefore, PCCD has wisely been using the hold harmless money to pay down debt and balance our operating budget in preparation for the move to SCFF, the goal is to align full-time equivalent faculty (FTEF) with full-time equivalent students (FTES) while still providing a comprehensive offering of courses. We recognize that some may disagree with this approach, and we acknowledge and appreciate their point of view. We feel strongly, however, that we need to be fiscally responsible and good stewards of public funds – especially given the observations from the state’s fiscal management team and our accreditor’s concerns.
Enrollment
Earlier, we mentioned that enrollment has been in decline, even before the global pandemic. There are multiple variables that contribute to that decline, often tied to the strength of the economy, unemployment rates, local workforce needs, etc. The pandemic has exacerbated and accelerated the decline because of the stressors of the health pandemic. PCCD is not alone; colleges across California and the nation have experienced declines in recent years. K-12 enrollment has also been in decline in our service areas including Albany, Alameda, Berkeley, Emeryville, Oakland, and Piedmont.
In fact, the drop in student enrollment is greater than the decline in classes offered and faculty teaching assignments. California Community Colleges count students using a formula for “full-time equivalent students” or FTES. In 2017-18 the FTES for all four Peralta Colleges combined was 18,966.46 while in 2020-21 (the last full year of data available) the FTES was 14,190.38, a decline of 25%. During the same period, the “full-time equivalent faculty” or FTEF count went from 1243.06 down to 1039.99, a decline of only 16%. This underscores the fact that the colleges have been rather conservative in reducing class offerings in the face of the precipitous enrollment decline.
A snapshot of the mid-Spring 2022 semester enrollment picture reveals that of the 396 sections being offered at that time, nearly one-third of the sections were kept open with an enrollment of fewer than 20 students. Roughly ten percent of the sections were kept open despite having an enrollment of fewer than 10 students. Simply put, the colleges are doing what they can to maintain access to the lower-enrolled sections so that students can have the classes they need.
One of the FCMAT recommendations was to better align our FTEF allocation with student demand (in essence, increase our productivity), and the district has been working diligently to do that even as we recognize the trepidation that some have regarding making these difficult decisions. This means that we are shifting to full-time faculty teaching a higher percentage of the classes – a good thing for our financial stability – but it also means that there have been fewer available teaching assignments for part-time and adjunct faculty. We recognize that shifting those assignments has a very real impact on people’s lives and we do not make any decisions to cancel teaching assignments lightly.
Next Steps
The semester course schedules for Summer and Fall 2022 were set earlier this month and enrollment is now open. Prospective students can visit https://home.peralta.edu/enroll to start the application process.
Each semester presents an opportunity to review our programs and make sure our curriculum is aligned with our core mission, students’ ability to transfer to four-year institutions and prepare our students for well-paying 21st-century jobs.
Some of the classes that are available now may need to be canceled due to low enrollment, which is a process that happens at every community college across the state, Peralta is no exception.
We are fully aware that the cancellation of classes is impactful. It is difficult to communicate to a faculty member, especially an adjunct faculty member who has taught for many years, that we do not have an assignment for them. However, full-time faculty have priority, which can include removing a class from a long-standing adjunct faculty member to complete a full-time faculty load. Across the district, deans work collectively to identify the students who are impacted by cancellations, and we reach out to students to help them find alternatives wherever possible. We put students first, and we have been following this process for years. Because that is the Peralta Way.
Dr. Jannett N. Jackson, the Interim Chancellor, recently completed her first year in the role and is under contract through December 2023. She has brought much-needed stability to the district. She is an experienced CEO, having previously served as President of College of Alameda and Chancellor of the Chabot-Las Positas Community College District. She is also a veteran, having served in Iraq and retired from the United States Army National Guard as a Colonel in 2010. Dr. Jackson is not one to shy away from difficult decisions. “I am always guided by what is best for students, now and in the future. We owe it to the taxpayers and to our local community to keep the Peralta Colleges solvent and sustainable, so we can continue to provide outstanding educational opportunities to people in the East Bay.”
The Peralta Community College District leadership is resolved to keep making fiscally prudent decisions to eliminate deficit spending, prepare for the new state funding formula, continuously improve enrollment management, meet the guidelines for full accreditation, and most importantly, educate and empower students.
About Peralta Community College District
Founded in 1964, the Peralta Community College District (PCCD) is a collaborative community of colleges comprised of Berkeley City College, College of Alameda, and Laney and Merritt colleges in Oakland, Calif. The Peralta Colleges provide a dynamic multicultural learning environment offering accessible, high-quality educational programs and services, including two-year degrees, certificates, and university transfer programs, to more than 30,000 students. PCCD is home to award-winning Peralta TV (Comcast ch. 27/28, AT&T ch. 99) and community radio KGPC-LP 96.9 FM. To learn more about The Peralta Colleges, visit www.peralta.edu.