To: Chemeketa Community College Budget Committee
From: Cheryl Roberts, President and CEO
Date: April 10, 2013
RE: Budget Message
Dear Budget Committee Members,
I would like to thank the members of Chemeketa’s Budget Committee for giving your time and talents not only to Chemeketa, but also to our entire community. This budget message will give you the background and assumptions used to develop Chemeketa’s budget proposal, summary information about the budget, and major budgetary changes from last year to this year.
For the sixth consecutive year, we have developed our budget with either decreased state funding or without knowing what funding we will receive from the State Legislature. To receive state funding, we are required to enter into an Achievement Compact annually with the Oregon Education Investment Board. This proposal helps prepare the college for changes that we believe are coming in the way community colleges are funded. Currently, the formula used to distribute funding to community colleges is based on the number of enrolled students. This formula focuses on student access to higher education. In the future, funding will likely be based on access, student performance and completion. For Chemeketa, we anticipate serving around 3,500 more Full Time Equivalent students next year than we did in 2005 while the state funding remains less than or equivalent to the 2005 level. We are supportive of the Governor and legislature’s aim of increasing the number of educated Oregonians as manifested in their 40/40/20 goal. However, with continued decreased funding from the State, the need to raise tuition will limit access for students in our district as well as put a strain on the level of student support services for students who do attend.
When we did our initial projections for this budget, we showed a budget shortfall. The budget proposal that we are presenting to you is balanced by making reductions to some programs and services expenditures, reallocating staff resources through retirements and vacancies, using a portion of our fund balance and increasing tuition. The Building Inspection program has been suspended due to the lack of industry need, as well as recommendations made by the advisory committee. This affects one full time faculty member. We are proposing some budget increases in staffing, programs and services that students support and we believe will position us for the future as we focus on student success through access, retention, progression, and completion. One area of uncertainty in our budget is the cost associated with our Classified employees’ collective bargaining contract. We are currently in negotiations so we are not able to budget this cost with certainty.
General Fund Resources
The governor and the co-chairs of the Ways and Means Committee have proposed funding community colleges at $428 million for the coming biennium. The Ways and Means Committee recommendation requires that two percent of the funding be held back until February 2014 when more is known about the State’s economy. Based on the outcomes of past legislative sessions, it is unlikely that our funding will exceed $428 million. It also must be noted that there are other political factors that may negatively impact our final appropriation. These include proposed reforms to PERS, public safety, and corrections in order for community colleges to receive the Governor’s proposed $428 million budget. Due to this uncertainty, we used an approach similar to the Ways and Means Committee proposal. We budgeted state revenue based on $428 million but held back expenditures as if funding were at the $410 million level. To balance the budget, the difference in state funding from $428 million to $410 million is placed in contingency.
Our tuition revenue is based on projected enrollment at the 2012-13 level. This budget includes a tuition increase of $2 per credit hour from the current $80 per credit hour to $82 per credit hour and an increase in the universal fee of $4 per credit from $10 per credit to $14 per credit. ($1 of the $4 increase resides in the Other Funds-Student Success within the Self-Supporting Services fund.) The $4 universal fee increase will go to support our college goals with an emphasis on investments in staffing, classes, services, and technology that students tell us are helpful to their success. We believe the college’s investments in these initiatives will improve student graduation rates, as well as meet the state education reforms requirement to achieve the State’s 40/40/20 goal. Chemeketa’s overall cost to students remains below the state average for community colleges. For the typical student, Chemeketa’s tuition is approximately half the tuition cost of Oregon’s public universities.
General Fund Costs
The largest portion of Chemeketa’s budget is personnel costs. This budget includes an amount equivalent to a cost of living adjustment for exempt, part-time hourly, and student employees of 2.3%. It also includes step increases for eligible faculty members. The budget for part-time faculty is increased to fund the current level of sections. There are also increases in budgets for materials and services, capital and health insurance by the annualized Portland CPI-U of 2.3%. The transfers budget is also increased due primarily to an expected increase in the number of Chemeketa Scholars and to allow for the increased cost of scholarships. As I mentioned earlier, we are currently in negotiations with the Classified employees so the final cost of this contract has yet to be determined.
Special Projects fund: Oregon Community Colleges submitted a capital development package to the legislature that includes an $8 million request from Chemeketa for the Applied Technology project on the Salem campus. Our request along with those from other community colleges and the University system will be part of the decisions made during the legislative session. This amount will help leverage the bond dollars approved by the taxpayers in 2008. These dollars are considered grants from the state and are recorded in the Special Projects fund, rather than the Capital Development fund.
Self-Supporting Services fund: One dollar of the universal fee was added to the student success fund to pay for key student success initiatives.
Although the college is fiscally stable due to the prudent financial decisions we have made in the past, the college’s expenditures continue to outpace the revenue we generate. We recognize that this is not a sustainable budget scenario and are attempting to reverse this trend gradually. While we continue to advocate at the Legislature for adequate funding to support achieving the completion goals, all indications point to the final allocation for community colleges falling short of the level that would fund investments adequately to address the rising financial and educational needs required to meet legislative expectations.
Cheryl Roberts, Ed.D. President/CEO
Budget Message Addendum
June 28, 2013
In June 2013, the classified association and the college agreed to a three-year contract. The contract is effective July 1, 2013 and continues through June 30, 2016. The associated costs of this contract are included within the adopted budget. Also in June 2013, the state legislature approved $450 million of funding for community colleges for the 2013-2015 biennium. It is currently awaiting the Governor’s signature. The college budgeted state revenue at a level of $428 million for the proposed budget. For the adopted budget, the college increased the state funds to coincide with a level of $450 million. The difference in these funding levels was added to the General Fund contingency budget. In February 2013, the board approved a $2 tuition and $4 universal fee increase for the 2013-2014 fiscal year. This was based on state funding at $428 million. If the state funding level falls between $450 and $460 million, the $2 tuition increase will be rescinded. The board also approved that for every $10 million dollars above $460 million, an additional $1 universal fee reduction will occur up to the original $4 approval.
View past financial documents