California’s improving economy means Southwestern College may dodge financial bullets that brought the institution to the precipice of salary cuts, possible layoffs and further class cuts. A bump in state funding combined with a $600,000 reduction in unemployment insurance payments had a campus that was seeing red suddenly in the black.
In August the State Employment Development Department (EDD) informed the college that its contribution rate for unemployment insurance had been reduced and to expect a reimbursed of $400,000. College officials say this windfall would be used to restore salary reductions negotiated with administrators and classified employees.
“It (the process) is different for different groups,” said Nish. “Three groups agreed to a salary concession of five percent for two years with triggers.”
Triggers in the contract required that new or freed revenue first go to restoring salary cuts. Nish said the EDD rebate and 2013-14 savings would almost cover the cost of restoring salary cuts.
Faculty negotiators did not agree to a 2013-14 pay cut. Faculty member had their pay rate restored on July 1 following a voluntary two percent pay cut last fiscal year.
Classified employees union president Bruce MacNintch expressed relief that the FY13-14 salary cuts have been avoided.
“The goal is to get it (the restoration) on the October paycheck,” he said. “The payroll runs September 23 and we can’t go through the ratification process fast enough to where it could be done in September.”
Nish said concessions were necessary due to a “structural deficit” at the college. A balanced budget remains a priority, she said.
“Once salaries are restored, we want to make sure that deficit is gone,” she said.
College officials next priority is to restore the reserve to its historical level of seven percent, she said.
New revenue will restore salaries, but it does not completely eliminate the budget deficit, which is now $600,000, according to Nish. This represents a significant decrease from the previously projected deficit of $1 million, she said.
Faculty union president Eric Maag expressed relief that no employees would have their salaries cut this academic year.
“I think it’s great news,” he said. “Three of the (four employee) groups on campus made agreements on pay cuts and the budget now became clear, and it was clear that (reductions were) not necessary. We have the money to restore those cuts and it was the right thing to do, especially in the face of all this talk about budget deficits.”