Del Allen says he wants to know why Bakersfield College classified staff faces cutbacks when the Kern Community College District has $22 million in a portfolio fund.

Allen, president of the classified employees’ union, wants officials to explain the purpose of $22,024,538 that is sitting in the district’s quarterly portfolio report, the total of the funds and collected interest compiled from money put aside from September 1998 to June 2002. The money has grown through money-market funds, government agency securities, insured certificates of deposit and U.S. corporate bonds, according to a district report.

Classified employees are in the middle of negotiations with the district, facing a reduction of job hours for part- and full-time employees, causing some retirements to be delayed, he said.

“They came in here with the intent that (the employees) were full-time 12-month employees drawing x dollars and now just because of bad management of the district, that concept keeps changing. It’s a very unstable working environment,” said Allen.

“How can I take this back to the people that I represent? Tell them you are going to take a financial loss, that you are going to have to work longer in this district to get your retirement because you are working less now when this district has 21 million-and-some-odd dollars sitting there. It doesn’t seem fair.”

Allen cited third-quarter earnings to arrive at the $21 million mark. However, with fourth-quarter earnings, the actual amount now exceeds $22 million, according to Tom Burke, assistant chancellor of business services for the district. While Allen wants part of the money used to offset staff reductions, Burke maintains that the district can only borrow from the fund, but can’t permanently spend it.

The fund is being held to pay off a balance of a little more than $90 million that is due on certificates of participation started on Sept. 1, 1998. These bondlike debt instruments have a deadline to be paid off by the year 2025.

In 1998, the Kern Community College District Public Facilities Corporation issued and sold $48 million in certificates of participation. The district makes annual payments to the investors through State Street Bank, according to documents provided by Burke.

“The primary use of that money is to pay back the certificates of participation holders now and in the future,” said Burke. “Because that money is significantly larger than our reserve requirements on the fund and our payment obligations, we can temporally borrow from it to help ease the impact on the budget of the reduced income received by the state.”

Burke explained that under a state-scheduled maintenance program, the state provides matching funds for maintenance of campus facilities.

“But you have to match it dollar for dollar. We have traditionally budgeted $900,000 to a million a year for our matching requirements to scheduled maintenance.”

But because of the district’s proposed $180 million bond measure on the November ballot, district officials have a “unique opportunity,” he said. The district can borrow from the portfolio fund to pay for the matching fund requirement, he said.

“Basically, the opportunity for us is that we can shift that matching requirement and take it out of local bond proceeds if (the bond measure) is successful. We are borrowing from ourselves from the cash available from the payment of certificates of participation. If it doesn’t pass, we will have to pay back that loan from out of the certificates of participation restrictive fund and pay it out over a four-year period.”

Even though the district borrowed from the fund, officials can’t borrow to offset staff cuts, he said.

“The cash that is there is an integral part of paying back the certificates of participation over time. So basically I’m limited on what I can use, because I can only borrow it, I can’t permanently take it,” said Burke.

“What Del is thinking is why can’t we use more of this money? Well, if I do, I have to find more money in the future.”

Allen disagrees. “If we are in a financial crisis and they have this money, what are they saving it for, a rainy day? I think they better be aware that we just had a severe storm warning posted. Pull some of that money out and get us stable. There is a lot of other ways outside of hurting employees,” he said.