Community Opinions

COMMUNITY OPINION: Gavilan College’s deficits are a result of overspending

Steve Kinsella writes that residents need to demand accountability and transparency from the Gavilan College trustees.

This community opinion was contributed by Steve Kinsella, former president and superintendent of Gavilan College. The opinions expressed do not necessarily represent BenitoLink or other affiliated contributors.

Gavilan College accumulated deficits of $6 million in three years and it expects another $5 million next year. Fortunately for taxpayers the money ran out. Hard for me to imagine, $11 million in deficits in 4 years for a college with an annual budget of $35 million. There are three reasons for the deficits: inaccurate and late financial information, ineffective governance, and denying public input before making decisions. My purpose for writing is to raise public awareness and increase public oversight of the Gavilan College Board of Trustees.

The accuracy and timeliness of financial reporting has been questioned by Gavilan’s auditors for the past two years. The FY 17/18 Annual Audit stated the college had not closed its accounting records until February 2019; 8 months after the close of the year. At no time over the course of that year did the college report anticipated deficits or make adjustments to contain spending. Gavilan’s current practice results in the discovery of its deficit spending long after the close of the fiscal year.

Early year deficits were explained away as being the result of the state taking money away. From 2016 -2019 Gavilan experienced wide fluctuations in enrollment, was in a revenue hold-harmless status preventing any decline in revenue, and in fact received an 8% increase in revenue. Gavilan claimed the state reduced its revenue; an inaccurate and recurring comment. Even today, Gavilan’s reported $7 million deficit is shown in part to be the result of lost state revenue. Actually, it will receive an increase from COVID 19 federal funds and will have higher, not lower state revenue. Uncontrolled spending is the problem.

In my opinion, the Board did not apply reasonable due diligence in its stewardship of public resources. For example, the Board approved a Supplemental Early Retirement Program (SERP) and a reorganization plan in June 2019. The college claimed it saved millions over future budget years depending how many and who retired. It paid $1 million to retire out 11 employees, replaced them, and then added three new employees. Instead of saving millions as it claims, the Board cost taxpayers an extra $430,000 in year 1. Unrealistic assumptions such as keeping vacated positions empty for two years were used to demonstrate savings. Gavilan was hiring replacements before the SERP was even finished. The assumptions were meaningless other than to show paper savings. Despite evidence showing the costs of the SERP in August 2019 were $430,000, on June 15, 2020  the college again stated it saved $1.4 million from the prior year SERP. This time in order to demonstrate savings, the college left out the cost of at least three employees in its analysis.

I asked for public records to assess the validity of the reported savings used when the Board approved the SERP in June 2019. An attorney responded, denying my request for public expense records. Using my now dated skills in college finance and special knowledge in all things Gavilan College from 2003-2016, I researched web pages and found the information needed to complete a close cost analysis of the SERP. My Public Member Comments, including the analysis of the SERP, were offered in writing on August 18, 2019. I requested the letter be included on the Board Agenda in accordance with its policy on public input.  Distribution of my letter was limited, and it did not appear on a Board Agenda.

On June 15, 2020 I sent a second letter to address two areas on the agenda; SERP and OPEB. I requested the College include my written comments to the Board and the Public. Only two Board members received my letter in time for its meeting. The public had to wait until the minutes of the June 15 meeting were published in time for the June 22 Board meeting to learn about the concerns I expressed.

Gavilan has moved from playing shell games with documents related to public resources to denying 1st Amendment Rights and protections for veterans with disabilities to prevent my voice from being heard. These are my only two encounters with Gavilan over the past four years. Perhaps others have had similar experiences. Twice my right to address the Board in public was forfeited and voice rendered mute. With 42 years in active and reserve duty including combat with the Marines, I will not allow my voice to be shut out by a handful of locally elected governing board trustees. It is time to hold this Board to account for its actions.

Only San Benito Trustee Irma Gonzalez has critically reviewed Gavilan’s management of public resources. In my experience this is when Trustee Gonzalez would be awarded the title ‘rogue’ trustee for her good efforts.  In my opinion there are six rogue trustees. They are the ones that cost taxpayers $6 million ($1 million each) and can no longer be trusted with public resources.

I have two requests of readers. First, provide encouragement to Trustee Gonzalez. She is alone and out voted by the rogue trustees. My second request is that you write to the Gavilan College Board of Trustees to express any concerns you may have about Gavilan College. The Board has already acted to close the Gavilan site in Morgan Hill, eliminate the $2 million in new positions it was planning to fill during FY 20/21 and is proposing an 8.5% pay cut for administrators. Having missed a legal March 15 notice to faculty, the college is likely under contract with full-time faculty through June 2021. The college has all but exhausted its reserves and is searching for loose change. It will insist it will not close the Briggs Building. If the money is gone how exactly will it pay to ensure continuation of satellite services?  Morgan Hill is already gone. Is San Benito next? Now is the time to provide public oversight of the board before it starts selling the assets to satisfy its appetite for tax dollars.

 

 

Steven Kinsella