At the November 13 Board of Trustees meeting, the PCC Board of Trustees unanimously voted to approve AP 6250 which requires the College to keep in reserve 18% of the annual expense budget. This amounts to approximately $30 million. The FA questioned this move in several different forums to no avail.

We need to be clear that the FA is not opposed to the district maintaining a healthy reserve. Of course it is in the best interest of the college to have a reserve. But what we did question was the timing of the mandate and the fact that it is a huge amount of money that cannot be used for anything other than an emergency situation.

First, the timing. We cannot ignore the fact that this AP was put into place while all PCC bargaining units (unions) are in negotiations for salary increases. This means that now The District has sent a message that most of the extra money that PCC has is off limits for salary talks. Convenient.

Now, the amount. Why 18% ($30 million)? The California Community College Chancellor’s office requires a 5% reserve, the ACCJC accrediting agency wants to see 6%. No other college districts in the state have a mandated reserve this large. So what is the story?

When first asked about the size of the reserve, the explanation was that this is simply the amount needed to cover two months worth of salary for all PCC employees. Just in case the state cannot fund the college for two months. Hmm… this has never, ever happened. But it sounds really good. Maybe they are looking out for us . . . maybe.

But later, the reasoning changed–or at least expanded–to include another explanation: PCC wants to borrow money. The way to do this is to get a bond. It seems that the rating agency that issues a credit rating for these bonds wants to see, on paper, that PCC has an 18% reserve. Not 10%Ñ not 15%Ñ but 18%. This makes the bond rating higher and more marketable to the parties that buy these bonds. So, who are they really looking out for?

The key to this is not the just the reserve, but the mandate for the reserve. The reserve is there to protect PCC faculty and staff, NOT people who are investing in a PCC bond.

Again to be clear, the FA is not opposed to the college having a reserve but we feel that the monies at PCC should be invested in PCC employees and students and not used to increase PCC’s credit rating. A reserve is fine; a mandated, untouchable $30 million reserve is a little bit too much.

How this will impact salary negotiations? We will wait and see. It will not affect the way in which we negotiate, but it may be used as a ploy by the district to claim limited resources.