09/09/09
Golden West College
Planning and Budget Committee Summary
September 9, 2009
Announcements:
- New Planning and Budget Member – Michael Carrizo (Classified – Criminal Justice)
Bookstore – Janet Houlihan
- The Bookstore Task Force met to review the RFP responses to contract the bookstore and discussed possible changes that could be implemented if the bookstore is not outsourced. A student was included in the committee as well as Thomas Truong representing Classified Staff from the bookstore. The following possible changes included:
- Reduction in business hours
- Raise gross margins from 27% to 30%
- Eliminate 10% departmental discounts
- Implement a two (2) year textbook adoption for faculty
- Steve Ludwig researched a book rental program and reported that it will take at least three (3) semesters to break even
In addition, in order to move the bookstore back to its original location, it will take an estimate of $150,000.00 to install carpet, paint and security system. This is a very conservative estimate, since realistically it will cost anywhere from $200,000.00 to $250,000.00 to complete the updates correctly. This money is not in the bookstore’s reserve, thus it will need to come out of General Funds.
- A Sales/Expense Comparison for 2005-2009 was presented to the Planning and Budget Committee. Looking into the sales vs. total expenses, the following profit/loss for the past four (4) years is as follows:
| SALES | TOTAL EXPENSES | PROFIT/LOSS | |
| 2005/06 | $3,435,714.13 | $3,333,003.62 | +$102,707.51 |
| 2006/07 | $3,525,856.77 | $3,469,786.21 | +$56,073.56 |
| 2007/08 | $3,409,494.59 | $3,451,794.82 | - $42,300.23 |
| 2008/09 | $3,033,640.81 | $3,191,333.61 | -$157,692.80 |
- After discussing the possible changes above, the committee moved forward to review the two (2) proposals that were submitted through the advertised RFP. One proposal is from Barnes & Noble, and the second is from Follett. The stronger proposal came from Follett.
- To compare both proposals a summary of RFP responses was presented. This document was scanned and attached with this summary, please refer for details (My scanner at home is not fancy so I scanned all four pages separately. You must print it to view it correctly…my apologies). The following summarizes important informational facts about each proposal:
| RFP Question | BARNES & NOBLE | FOLLET |
| BOOKSTORE RENOVATION | Will commit up to $200,000.00 to renovate bookstore and will commit $70,000.00 for computer systems | Will Commit up to $275,000.00 for bookstore renovations and will invest $42,000.00 for the installation of JDAWindows DSS point-of-sale and bookstore management system. |
| PRICING POLICIES | NEW TEXTBOOKS: up to 27% gross margin
USED TEXTBOOKS: priced 25% less than new selling price
COURSEPACKS/TEXTBOOKS FROM PUBLISHERS WITH RESTRICTIVE POLICIES: up to 30% gross margin |
NEW TEXTBOOKS: up to 25% gross margin
USED TEXTBOOKS: Not more than 75% of the new text book selling price
COURSEPACKS/TEXTBOOKS FROM PUBLISHERS WITH RESTRICTIVE POLICIES: up to 30% gross margin |
| FINANCIAL COMMITMENT | On an annualized basis, Barnes & Noble will pay GWC the guaranteed payment or the percentage of gross sales, whichever is greater as follows:
Guaranteed amount: $200,000.00 plus a one-time unrestricted contribution of $75,000.00 at commencement of the contract.
|
Competitive five-year financial proposal that sets the standard in bookstore management industry. We offer GWC a commission based on the bookstore’s sales:
Guaranteed amount: $300,000.00 annually
|
| SCHOLARSHIPS | $3,000.00 for annual textbook scholarships | $10,000.00 annually in textbook scholarships |
| STAFF | Reimbursement of all classified bookstore employee payroll costs and benefits. | Follett understands and agrees to the requirements. We understand there are two full-time employees, one half-time employee and three 47.5% classified bookstore employees. Follett is prepared to reimburse the college for the wages and benefits, including future salary increases. We could also offer all employees the opportunity to become Follett associates at their same salary and benefit level. |
- Comparing business with the OCC bookstore shows Barnes & Noble as the bookstore contractor until June 30, 2008 with a guaranteed $500,000.00 to the campus. Follett took over the bookstore after Barnes and Noble with a guaranteed $750,000.00 to the campus. This last fiscal year, Follett gave the campus $984,000.00 based on sales.
- Contract with Follett can be for up to 5 years.
- Steve Ludwig reported that about 7500 less textbooks were ordered, which equals to about $500,00.00 in sales
- Classified Union Representative suggested that if the bookstore is outsourced, that the language on the contract be clear. In addition, the need for a bookstore council will need to be represented by a GWC member and not by a Follett member.
- The Bookstore Task Force recommended the following to Planning and Budget:
- Because:
- Bookstore has experienced a financial loss for the past two fiscal years
- 2007-2008 = ($42,300.23)
- 2008-2009 = ($157,692.80)
- Sales continue to decline due to reduced number of sections as well as increased competition
- Expenses continue to rise despite the Bookstore’s efforts to minimize without impacting service
- Bookstore has experienced a financial loss for the past two fiscal years
- Because:
- The Task Force Recommends:
- Unanimous decisions to contract out the management of the Bookstore
- Contract out with Follett (unanimous vote that Follett was the stronger proposal)
- Benefits
- Staff is retained and protected
- Annual guaranteed income to Golden West of $300,000.00
- Annual textbook scholarship in the amount of $10,000.00
- Capital improvements in the amount of $275,000.00 to the existing store
- Follett will purchase all usable inventory which will provide a one-time stream of revenue to the campus
- Installation of new point of sale system in the amount of $42,000.00
- Lower mark up on new textbooks (25%)
- Offers a textbook rental program
- Conditions:
- Task Force strongly recommends that a committee be established to make recommendations to Planning and Budget on how the revenue is to be allocated.
- After reviewing all previous information, Planning and Budget voted to contract the bookstore with Follett.
Enrollment Report – Lois Miller
- As of today, the unduplicated head count is 13,839 students.
- If we can keep this head count up until Census date, GWC will generate over 5,000 FTES
- GWC’s target is to reach 10,400 FTES. With 900 FTES from last summer, we will be in a good path to reach target.
- Winter Session has been eliminated
- Some of the courses usually offered in the winter will be incorporated into the Fall and Spring
- Spring course offerings will show a minimal change compared to last spring since the major cuts in the number of sections offered were done in spring 2008.
- Spring schedule is in process. The schedule should be ready by the end of September and posted by the end of October.
- An important note is that the spring schedule is being built knowing that there will be mid-year cuts in January. This means that this situation will get worse before it gets any better.
College Land Development Committee
- CVS will give GWC $250,000.00 per year once CVS is operating. This project is on schedule to open in November
- Other land development proposals have been submitted. Wes Bryan will explore options with the Land Development Committee and will share to Planning and Budget by October 14th.
- It is in the College Plan and directed by the Board to look for land development ideas that provide recreational facilities. These facilities should be joint facilities for GWC use. Neighboring homeowners next to the campus would like to see only land developments that are recreational in nature.
Vacant Positions and the Hiring Slowdown
- The following faculty positions are on hold for hire. These positions have been incorporated into the budget and are on hold in order to balance the 50% law. If these positions are eliminated, GWC would have to eliminate twice as many positions from the other side to balance the 50% law.
- Counselor – Tentative Spring 09 hire
- Instructor, Computer Science – Tentative Spring 09 hire
- Instructor, English – Tentative Spring 09 hire
- Instructor – Tentative 10/11 hire
- Instructor – Tentative 10/11 hire
- Instructor/Coordinator Learning Resources (80%) – HOLD-AFT Release
- The following Classified positions are on hold for hire. These positions have been incorporated into the budget and are being held for possible transfers. Categorical programs are suffering from major cuts from 16% to 82%. The District backfilled any cuts over 16% using State stimulus money. This is only for this fiscal year. In order to protect current classified positions under categorical programs, the intention of the President is to possibly transfer some of these positions to current or future vacancies and protect the jobs of the Classified Staff.
- System Network Analyst II
- Information Sys Tech Sr.
- Maintenance Skilled
- Staff Aide (Enrollment Services)
- Switchboard Operator Sr.
Reports
- Income Development Committee will report next meeting
- Cost Cutting Measures Committee will report next meeting
Next meeting is scheduled for September 30, 2009.