City College of San Francisco Close to Bankruptcy

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Sep 21, 2012

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The largest community college in the country, City College of San Francisco, may be on the verge of bankruptcy, with overpaid employees partially to blame.

The junior college recently underwent an audit by the Accrediting Commission for Community and Junior Colleges to determine whether accreditation would be reaffirmed. In the Commission’s report, they declared that the college employs far more employees than its counterpart institutions and also pays them more than average. The Commission reports an overall lack of efficiency among administrative employees, and a failure to implement budget changes laid out in previous audits.

The Commission has ordered CCSF officials to produce a “Show Cause” report, leaving the burden of proof that they deserve accreditation on the institution, and a comprehensive budget restructuring plan by March 2013. When colleges lose their accredited status, they lose state funding along with it. Without state funding, CCSF will be forced to shut down, leaving 86,000 students to seek classes at nearby institutions, or forego educational endeavors all together for lack of convenience.

CCSF is facing immense financial problems with a possible $2.5 million deficit, according to SFGate.com. Undergoing a sort of bankruptcy, or “fiscal insolvency,” as it’s being referred to, will be an unprecedented move as no other educational institution has undergone such a budget restructuring. Insolvency means a debtor, in this case the college, does not have enough backing, or assets, to pay the debts that it has signed on to pay. In other words, its liabilities exceed its assets. An insolvency is like a Chapter 11 bankruptcy filing: the goal is to restructure debts while continuing to operate.

San Francisco’s community college is a microcosm of a financial epidemic. Like a corporation or individual in bankruptcy, the institution’s irresponsible spending habits have led it down a path that is financially unsustainable. Now, faced with the threat of losing accreditation, and the uncertainty of whether a severely weakened budget can be revitalized, CCSF may have no choice but to dissolve.

The institution’s Board of Trustees, along with a board-approved state advisor, has until March of next year to get its financial act together, make the necessary budget cuts, reassess employee salaries, and prove to the Commission that the campus is worth their stamp of approval. Meanwhile, students are frustrated, and voicing their discontent as recent protests erupted at a board meeting in early September.

The following is an update of the college’s finances from Vice Chancellor of Finance and Administration, Peter Goldstein, and new Interim Chancellor of City College of San Francisco, Dr. Pamila Fisher, published in May, 2012.

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