What really ails City College of San Francisco?

Everyone agrees that closing City College would be bad for San Francisco. But what exactly is the problem that has the Accrediting Commission making such threatening noises? Hard to tell from stories in the local media. 

Some clues from a commission Evaluation Report of 2012:

The team recommends that the college develop a financial strategy that will: match ongoing expenditures with ongoing revenue; maintain the minimum prudent reserve level; reduce the percentage of its annual budget that is utilized for salaries and benefits; and address funding for retiree health benefits costs.

The team confirmed that City College of San Francisco has not addressed this [2006]recommendation. The current projections for the 2011-12 year indicate ongoing expenditures will exceed revenues by approximately 5.9 million dollars. Salaries and benefits remain above 92% of the unrestricted general fund expenditures. Furthermore, unfunded liabilities, such as Other Post-Employment Benefits (OPEB) and Workmen’s Compensation, continue to negatively impact cash flow, and no plan has been developed to address payment of these liabilities. While the reserve meets the minimum California community college requirement, it is well below a minimum prudent level, as demonstrated by an increase in short-term borrowing to meet cash flow needs (pages 13, 14)....

City College of San Francisco has been ineffective in developing and implementing a comprehensive budget planning system that addresses its lack of resources and declining budget....the planning system has not been effectively utilized to address the current lack of resources and declining budget picture.

As with many California community colleges, City College of San Francisco has had declining state revenue for a number of years. As one of California’s largest providers of noncredit education, the college’s fiscal health has been further challenged by the state’s ongoing low level of funding for noncredit instruction (page 55).... 

The financial situation at City College of San Francisco continues to deteriorate. The budget does not realistically provide the financial resources necessary to support student learning programs and services and to improve institutional effectiveness. The short range budget plans do not include payment of future liabilities and obligations such as OPEB and the shortfall in the workman’s compensation self insurance pool. 

The general fund reserve is at a level that makes the college unable to meet financial emergencies or unforeseen occurrences. This low reserve has also created a reliance on short-term borrowing to meet the cash flow needs of the institution. While the college has plans to reduce salary and benefit costs that currently exceed 92% of the unrestricted general fund budget, there has been no significant progress in reducing these costs since the last accreditation visit. The failure to address this structural problem continues to limit the college’s ability to address other financial problems.

The institution has also failed to correct deficiencies identified by the external auditor. A number of audit findings have repeated for several years without any corrective action (pages 56, 57)....

Maybe the state's Fiscal Crisis and Management Assistance Team can help the college get a grip on its finances.