To: Chemeketa Community College Budget Committee
From: Cheryl Roberts, President and CEO
Date: April 9, 2014
RE: Budget Message
Dear Budget Committee Members,
I want to begin this year's budget message by first thanking members of the budget committee and the Board of Education for your willingness to serve Chemeketa and our community through your participation in our budget process.
As in past years, this budget message gives you a description of our current budget environment and of the significant assumptions used to create the budget.
As I mentioned in last year's budget message, the Oregon Education Investment Board requires community colleges to enter into an annual Achievement Compact. In our Achievement Compact, we set targets that will contribute to reaching Oregon's 40/40/20 educational goal. At a time when the Governor and the Legislature want more students to complete their education, state funding for community colleges remains less than the funding levels in the 2007-2009 biennium. This has and will contiue to present budget challenges for Chemeketa.
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. The budget presented in this document continues to prepare Chemeketa for changes that we believe are coming in the way community colleges are funded.
In the current year, we have been experiencing a drop in enrollment, which affects our tuition revenue. The college currently receives over 30 percent of its funding from tuition, and further decreases in enrollment could significantly impact our budget since enrollment impacts both state revenue and tuition.
General Fund Resources
The Board of Education approved the college's recommendation to hold tuition at the current rates. Additionally, there was no increase to the universal fee. Because the college expects to receive additional revenue from the Legislature for 2014-15 and as well as our savings from previous years, we are able to make general fund investments of approximately $300,000 and not eliminate general fund positions due to budget constraints. Our savings and the Legislature's investment allow us to make these investments in a time of enrollment decline.
In building this budget, we assumed that the trend of having fewer students attending college will continue. We will continue our focus on student enrollment, retention and progression in an attempt to moderate enrollment declines and protect the financial viability of the college in future years.
In budgeting revenue from the State, we originally prepared the budget for 2013-14 assuming that the Legislature would appropriate $428 million to community colleges for the biennium that includes 2014-15. After the 2013-14 proposed budget was prepared, the legislature appropriated $450 million. We placed the difference in contingency for the adopted budget. After the budget was adopted, the legislature then added another $15 million for the biennium to be paid in 2014-15. This is approximately $1.5 million and will help offset the reduction in tuition and fee revenues.
General Fund Costs
Personnel costs make up the largest portion of Chemeketa's budget. The budget for 2014-15 includes an amount equivalent to step increases for eligible classified and exempt employees. Currently, the college is in negotiations with the faculty association so the final cost of that settlement is not known at this time.
Also included in the budget are various student success investments in our Core Themes of College Preparation, Transfer Studies and Workforce Education, like dual credit programs that we hope will help us reach the targets contained in our Achievement Compact.
In Spring 2014 the college will issue the last of the $92 million of bonds voters approved in 2008. The $14 million issue will be added to the $78 million sold since 2008. In addition to the sale, the college anticipates refunding a portion of the 2008 bonds which will save taxpayers approximately $2.3 million in current dollars due to lower interest rates.
The final sale of bonds will allow the college to complete two major projects. The larger project is the continuation and completion of a 53,000+ square foot lab and classroom building to serve the college's Machining, Drafting and Engineering programs. The second major project is the continuation of the remodel of building 4 which serves the college's Electronics, Automotive and Visual Communications programs.
This budget proposal is balanced. Due to Chemeketa's sound financial decisions of the past, Chemeketa is well positioned to be flexible to the challenges we will face in 2014-15 and will continue to plan for the future. We remain committed to our students, community and employees as we face uncertainty about the new governance structure at the state, the state distribution model and our enrollment. We are hopeful that the Legislature will continue to see the value of investing in all levels of education and translate this into increased funding for Oregon's community colleges. We will continue to work to show them the important contribution community colleges make to our students and the future economic vitality of the state.
Cheryl Roberts, Ed. D, President/CEO
Budget Message Addendum
June 28, 2014
In June 2014, the Chemeketa faculty association and the college agreed to a three-year contract. The new contract is effective July 1, 2014 and continues through June 30, 2017. The associated costs of this new contract are included within the adopted budget.
View past financial documents