The Los Rios "Bucket System"
The Los Rios Community College District's "Bucket System" is a decades-old approach to budgeting for employee compensation created in concert with our collective bargaining partners to split new revenues among faculty, staff, and operations fairly and equitably.
Historical Background
This collaborative revenue-sharing model, the Bucket System, was adopted district-wide and has been used for over 30 years, becoming a foundational part of Los Rios's financial management and labor relations. In the early 1990s, Los Rios also embraced an interest-based bargaining philosophy, which complemented the Bucket System by promoting open communication and joint problem-solving between labor and management. Together, the Bucket System and interest-based approach have fostered a culture of trust that helped the district weather economic ups and downs. Over time, the Bucket System has remained remarkably consistent in its formula while being formalized in contracts and policies, and it continues to underpin Los Rios's reputation for fiscal stability and collaboration.
Goals and Purpose
The Bucket System was created to ensure fair, transparent, and collaborative allocation of new funding. Key goals and benefits of the system include:
- Fair Distribution of Resources: New general revenues are shared proportionally across employee groups and district needs, preventing any one group from dominating the budget. This aligns funding with the district's actual cost structure (about 80% of the budget goes to personnel, so roughly 80% of new funds are earmarked for compensation).
- Labor-Management Partnership: The system embodies transparency, as all parties (administrators, faculty, and staff unions) collectively see how much money is coming in and where it goes. This transparency builds trust and shared responsibility for the District's fiscal health. The bucket framework encourages problem-solving based on mutual interests – everyone has a stake in prudent budgeting and the long-term success of the colleges.
- Stability and Predictability: By using a predetermined formula, the Bucket System brings certainty to budget planning. Both employees and management can anticipate how new state funding (e.g. COLA or enrollment growth dollars) will translate into salary and benefit improvements. This helps to reduce conflict and surprises. The Bucket System helps Los Rios to build healthy reserves in good times, since all sides agreed to moderate increases and save for the future – a strategy that preserved jobs during downturns. It also ensures that we don't spend money before we know we have it. Whereas other districts build budgets based on projected revenue, the guarantees of the Bucket System allows us to budget based on real revenue.
Overall, the purpose of the Bucket System is to balance the needs of employees with the operational needs of the District in a consistent, sustainable, agreed-upon way. It aligns financial decisions with Los Rios's values of collaboration and transparency, ultimately in service of stability for both employees and students.
How the Bucket System Works
In essence, the Bucket System is a formula-driven allocation model for new unrestricted revenues (such as state general fund increases). The process works as follows:
- Identify New Funds: At the start of each budget cycle, the district identifies any new ongoing general revenues available for allocation. This typically includes state Cost-of-Living Adjustment (COLA) funds or enrollment growth funding after covering mandated costs. One-time funds are usually considered separately from ongoing funds.
- Split Between Operations and Compensation: Los Rios then splits these new revenues into two main portions – 20% for district operations/other needs, and 80% for employee compensation. The operations portion (roughly one-fifth) is set aside for district-wide needs beyond salaries – for example, covering inflation in utilities or services, funding new initiatives, capital outlay, technology, or adding student programs. The remaining four-fifths of new funds form the "bucket" for all employee groups' compensation improvements.
- Allocate to Each Employee Group: The 80% compensation pool is then divided among the major employee groups (LRCFT, LRCEA, SEIU, LRSA, Confidential, and Management). The allocation to each group is based on each group's share of the total salary/benefit costs. For example, faculty historically make up the largest portion of payroll (around 62% of all personnel costs), so the faculty "bucket" receives roughly that proportion of the 80% pool. Similarly, classified staff and other units receive portions reflecting their size. This step ensures that all employee constituencies receive a part of any new funding.
- Group-Specific Compensation Decisions: Once each employee group has its "bucket" of funds, that group (through its union or association and district negotiators) decides how to use the money to address compensation priorities for its members. Much of the allocation may go toward salary schedule increases (for example, cost-of-living raises). Some funds might cover rising benefit costs or be used for specific improvements like adding new salary steps, enhancing health coverage, or other agreed-upon items. Each group has significant discretion here. Importantly, the resulting pay increases or benefits need not be identical across groups – the Bucket System doesn't necessarily mandate an across-the-board percentage raise. Instead, it guarantees each unit a fair share of resources, which they can then apply as appropriate for that unit. For instance, faculty might negotiate a mix of a salary raise and extra funding for sabbaticals, while classified staff might prioritize a larger across-the-board raise; each is constrained by the size of their bucket, not by what the other group is doing.
- Governing Agreements and Implementation: The allocations and any salary changes are incorporated into each group's collective bargaining agreement (or management pay plan). Because the Bucket System approach is well-understood and agreed upon in advance, the actual negotiations each year or budget cycle tend to focus on how to distribute each group's bucket, rather than – as is common in other districts – whether employees will get a share. This significantly streamlines the bargaining process and promotes consistency. The end result is that when the budget is finalized, new revenues have been appropriately and fairly distributed to our employee groups in line with the formula.
Through this process, Los Rios ensures that employee compensation increases are proportional to available funding, maintaining fiscal balance. In boom years, all groups share in gains; in lean years, no one group bears an unfair burden. Notably, the Bucket System's transparency means that all parties can verify the numbers (the district regularly shares revenue details), so there is a high level of trust in the outcomes. This method has avoided the scenario common elsewhere where each union fights for a bigger piece of a mysterious pie – instead, the pie is divided by formula, and collaboration replaces competition.
Evolution and Adaptation of the System
While the core mechanism of the Bucket System (the 80/20 split and proportional sharing among units) has remained consistent since its inception, there have been a few evolutions and reaffirmations over the years:
- Formalization in the 1990s: What began as an informal practice became formally embedded in district policy and labor agreements by the early 1990s. The District and its unions memorialized the revenue-sharing formula and procedures in multi-year contracts and Memoranda of Understanding. During this time, the "trombone clause" was introduced – a contractual provision that if state funding declined significantly, the parties would reconvene to adjust compensation (the metaphor being that the salary schedule could slide backwards like a trombone if absolutely necessary). This clause, established under LRCFT President Pat Kirklin's leadership, has been "the basis for LRCCD salary policy for almost 30 years" [1]. It underlines that in difficult times, rather than laying off junior employees, the district and unions would first consider temporary salary freezes or minor pay reductions for everyone, reflecting a shared sacrifice approach.
- Continuous Collaboration: The collaborative ethos around the Bucket System has deepened. By the 2000s and 2010s, Los Rios had an in-house Interest-Based Approach (IBA) Steering Committee and hundreds of employees trained in cooperative negotiation techniques. The Board of Trustees even officially adopted interest-based bargaining as Board policy, reflecting how ingrained the bucket-style shared decision-making has become. New generations of leaders and union officers have upheld the Bucket System as "how we do business" in Los Rios, ensuring continuity even with leadership changes.
- Refinements in Allocation: The fundamental 80/20 allocation ratio has stayed the same, but the exact distribution among employee groups can be revisited to match the workforce. For example, if a new bargaining unit forms or if one group's share of total salaries shifts over time, the formula proportions might be tweaked by mutual agreement. Additionally, the treatment of one-time funds vs. ongoing funds has been clarified. Generally, one-time state funds (such as one-time block grants or budget surpluses) may be distributed using a similar 80/20 concept but directed to one-time uses (like one-time salary improvements, equipment, or temporary projects), whereas ongoing funds (like COLA) go into permanent salary/benefit increases. These nuances have evolved to ensure the system remains sustainable – ongoing costs funded only by ongoing money.
- Recognition and Influence: Over the years, Los Rios' Bucket System has gained recognition statewide as a best practice in budgeting. It has been cited as a key reason Los Rios is considered one of the best-managed community college districts in California.[2] In 2011, the San Diego Community College District modeled its own revenue-sharing plan on Los Rios' example[3], and its Chancellor praised the approach's predictability, equity, and transparency. Despite economic ups and downs, the Bucket System has delivered consistent raises and labor peace, which is a testament to its success. Today, Los Rios leaders still describe the Bucket System as a "best in class" model that gives the district a strong, stable financial foundation.
In summary, the Bucket System has endured with only minor adjustments, proving adaptable to changing fiscal climates while maintaining its original spirit of equitable sharing. Its longevity is a product of continuous support from both management and unions, who see it as mutually beneficial. The system's evolution has been one of reinforcement and fine-tuning, rather than overhaul, which speaks to how well it has worked over time.
FAQ: State and Federal Budget
Community college funding comes through the Student Centered Funding Formula (SCFF), which allocates funds based on three main factors: base FTES enrollment, supplemental funding (low-income students), and student success outcomes. These revenues are influenced by Proposition 98, which guarantees a share of state general fund revenues for K-14 education, including community colleges.
Yes, but it's too early to know exactly how. California's budget is highly sensitive to capital gains and personal income tax revenues, which are closely tied to the economy and stock market. Economic slowdowns or federal instability can reduce state revenue, which may impact the overall funds available under Prop 98 and the SCFF.
Yes. While most of Los Rios' core funding is from the state, several key programs rely on federal support (e.g., Pell Grants, Perkins V, TRIO, and Title III/V grants). Significant federal budget cuts or structural changes – like dismantling the Department of Education – could disrupt these programs. The District is monitoring these risks very closely and will do everything in our power to protect these critical programs.
FAQ: Bucket System
The Bucket System is a structured method for distributing new unrestricted general fund revenue. After deducting direct costs of growth, remaining new funds are split:
- 80% to employee compensation (distributed to each unit based on their share of payroll), and
- 20% to the Program Development Fund (PDF) for operational costs and strategic investments.
This model ensures fairness, predictability, and stability during both revenue increases and downturns.
Each unit receives a share of the 80% compensation bucket based on its percentage of total district salary and benefit costs. For example, if LRCEA accounts for 25% of total compensation, they receive 25% of the compensation allocation.
Included revenues are:
- State-funded COLAs
- Growth funding (FTES-based)
- Lottery funds
- Salary savings from retirements/resignations
Note: Restricted or categorical funds (like SEA or Strong Workforce) are excluded.
Each unit's allocation from the 80% compensation portion is based on their relative share of total payroll costs.
Yes. The District tracks how much each unit receives and spends. Units are accountable for managing within their allocated resources.
The PDF receives 20% of new unrestricted revenue. It funds districtwide operating cost increases (e.g., utilities), technology and infrastructure improvements, and other non-salary strategic priorities. This fund helps protect unit budgets from structural cost pressures that may be beyond our control, such as increased utility costs.
The Los Rios Bucket System is not just a handshake agreement – it is well documented and formalized through various official channels:
- Collective Bargaining Agreements: Each of the District's bargaining units (faculty, classified staff, etc.) has provisions in their contracts that reflect the Bucket System formula. For instance, the faculty contract explicitly details how new revenue from COLA and enrollment growth is calculated and what portion constitutes the faculty's "proportionate share" for salary improvements. Similar language exists in other unions' agreements, usually in salary articles or appendices, ensuring that 80% of eligible new funds are allocated to compensation and divided among units. The trombone clause (allowing mid-contract salary adjustment if revenues fall) is also codified in these agreements, underscoring that all parties are legally committed to the bucket principle in both good times and bad. In practice, this means the Bucket System's rules have the weight of a contract: they are binding and enforceable, giving employees confidence that the process will be followed each year.
- Board Policy and Endorsements: The spirit of the Bucket System is backed by the Los Rios Board of Trustees. The Board has formally endorsed the Interest-Based Approach to negotiations and collaborative budgeting as official policy, thereby endorsing the underlying philosophy of the Bucket System. While there may not be a standalone board policy titled "Bucket System," the Board's budget adoption resolutions and guiding principles consistently affirm that employee compensation will be addressed in a formulaic, partnership-oriented way. For example, Board budget presentations often note that employee salary schedule improvements are determined by a formula developed jointly with employee groups. This high-level support has been crucial in sustaining the system over the years.
- District Budget Publications: The annual Adopted Budget book for Los Rios regularly references the Bucket System as a cornerstone of financial planning. In budget messages, the Chancellor touts the Bucket System as a "best-in-class" compensation model that allows the district to appropriately and fairly distribute new resources to our employee groups. The budget documents often explain, in narrative form, how the bucket allocation works and credit it for helping maintain fiscal stability. This serves to inform stakeholders (including trustees, employees, and the public) about the system. Additionally, multi-year financial plans and fiscal health reports mention the Bucket System when discussing how Los Rios manages salary costs responsibly.
- Resource Allocation Guides and Reports: Internal planning documents, such as the Resource Allocation Process guide used by Los Rios colleges, describe the framework established by agreements with employee groups for splitting resources between compensation and operations.
- Presentations and Educational Materials: Los Rios has also developed presentations to educate employees about the Bucket System. For example, informational workshops have been held at College convocations and District budget forums explaining how the bucket formula works. A video presentation titled "The Los Rios Bucket System" was produced to walk employees through the model (using charts and examples of revenue splits). These materials reinforce transparency – any employee can learn how their raise was determined by watching a presentation or reading the summary in a budget FAQ.
All these forms of documentation mean that the Bucket System is institutionalized in Los Rios's governance. It's not an unwritten understanding – it appears in board agendas, fiscal handbooks, union contracts, and official statements. Employees at all levels can refer to these sources to see that the system is real, sanctioned, and stable. This thorough documentation has helped the Bucket System endure: new employees and administrators can learn about it in the orientation manuals or by reading the contracts/board docs, ensuring continuity of knowledge.
In conclusion, the Los Rios CCD "Bucket System" is a collaborative budgeting model with deep roots in the district's history and culture. It was born from an innovative idea to share new revenues fairly, and over the decades, it has achieved its purpose of fostering equity, trust, and financial stability. Under this system, all employee groups – from faculty to classified staff to administrators – rise together when funding increases, and share responsibility when challenges arise. The Bucket System's success is evident in Los Rios's labor harmony and sound finances, and it stands as a proudly "best in class" approach to managing compensation. This overview is intended as a primer; in the detailed FAQ that follows, Los Rios employees can find answers to specific questions about how the Bucket System impacts salaries, budgeting, and our district's future.
FAQ: Employee-Related
Yes. Since the pandemic, statewide COLAs, the budget mechanism in place to account for macroeconomic conditions, have increased by about 21%. In that same period of time, Los Rios employees have seen an increase of nearly 24% in ongoing total compensation and received about 38% over the same time period in one-time salary adjustments.
Whenever the state awards a COLA or other new ongoing funding sources, Los Rios's Bucket System guarantees that 80% of that increase goes straight into the compensation buckets—and then proportionally to each employee group – so that salary schedules and benefit contributions rise in lock-step with inflation and growth. This built-in, formulaic process is the cornerstone of how the district "keeps pace" with COLA and other factors every year.
The District covers all base salaries, benefits, STRS/PERS contributions, and other contractual obligations. New costs resulting from negotiated agreements or growth (for example, adding positions) are paid from unit buckets or specific allocations.
Salary savings from retirements/resignations flow into the unit's bucket as ongoing funds. Units can use these funds for new positions or negotiated improvements.
New unrestricted revenue from the state – like COLA or growth funding – is distributed through the Bucket System once direct costs of growth are covered.
Each employee group decides how to use its allocation (for example, salary vs. health premium contributions) based on member feedback and internal processes.
No. The bucket allocation is based on the total new unrestricted general fund revenue and is split 80/20. Reducing administrative positions doesn't change the total new revenue or the 80% allocation percentage.
Additionally, administrative salary and benefits make up only a small fraction of districtwide employee-related costs. Eliminating administrative positions, in addition to having a negative impact on our ability to serve students, would result in a negligible impact on other employee groups' total compensation. A 10% decrease in administrative positions, for example, would result in approximately only a 0.15% increase to the other units' buckets.
The 80/20 split is a balance between supporting employee compensation and ensuring operational investments through the PDF. It reflects Los Rios' long-standing commitment to both workforce stability and institutional improvement, and is the principal reason why Los Rios's fiscal health is second-to-none. In the event of another economic downturn, this wise planning will protect employees from unnecessary furloughs or layoffs
FAQ: Budget Fluctuations
Employee groups receive retroactive or ongoing compensation adjustments from their proportional share of new revenue. This ensures they benefit from revenue increases without requiring mid-year renegotiation.
The District and employee groups maintain reserves within their buckets. These reserves help avoid furloughs or layoffs and provide a cushion during downturns. If reductions are necessary, they are applied proportionately and transparently across all groups.
Additionally, for specifics on how the Bucket System is implemented for your Unit, see Appendix A of your Collective Bargaining Agreement.