April 13, 2016
This past fall, the executive team completed updating the college’s mission, vision, values and core themes. It was just after the completion of the seven-year accreditation cycle and a good opportunity to revise and refresh this information prior to entering into the next seven-year cycle. The revision included input from the board, governance groups, and employees. These guiding statements also provide the foundation for the college’s budget principles as each year’s budget is developed based on this framework.
When preparing for the upcoming year’s budget, revenue and expenditure forecasts were prepared within the context of current economic conditions and the college’s financial position. In the general fund, we were able to budget the carry over state funds received in 2015-16 but unspent, as well as projected general fund ending balances. This allowed us to propose investments in salaried positions, to move some faculty positions from trial status to general fund and to make investments in selected department accounts. This budget includes faculty increases per the contract. The classified contract is under negotiation so an estimate of any settlement is included. Administration increases are subject to board approval in May and June and an estimate of those costs is also included. We also increased the rate charged to departments for the Public Employees Retirement system and the cost of employee insurance. Any unallocated budget was placed in contingency and unappropriated ending fund balance to carry over to future budget years.
We continue to see the mixed effects of an improving economy at Chemeketa. State funding is currently stable as income tax collections are very close to expectations. Property taxes continue to show strong growth, both from existing properties and new construction. But, an improving economy typically results in reduced enrollment. Enrollment has declined steadily since the peak in FY2010-11 and we expect it will decline by about six percent this year. Without the increased enrollment due to the Oregon Promise, enrollment was expected to decline an additional four to five percent in FY2016-17. The Oregon Promise’s impact on our enrollment is difficult to pinpoint. We know that over 3,000 students in our district have applied but we cannot predict how many of those students will ultimately attend Chemeketa. Some students will not qualify, some will attend a community college in another district, and others will attend universities either in Oregon or another state. This budget was prepared assuming an enrollment decline of four percent.
Chemeketa has always strived to keep the price of a college education affordable for its students. The college recommended and the board approved no increase to student tuition and fees for FY2016-17. This will be the fourth year in a row that tuition and fee rates will remain the same at $80 tuition and $14 universal fee. Chemeketa is currently the least expensive community college in the state to attend.
A new initiative was created in 2015-16 to support college affordability; the Chemeketa Press. It is widely known that, in an attempt to reduce costs, students often elect to share, borrow, or do without required course materials. The effect of this is to reduce student success in terms of academic performance, completion, and time to complete. The college has set aside student success funds in the Self-Supporting Services fund and Intra-College Services fund to support faculty in the selection, revision, remixing, and/or creation of textbook and course material alternatives. The materials are designed to help manage the high costs of textbooks as they make up a significant part of the student’s costs. Our goal financially is to charge just enough for the materials to cover all of the costs of production.
A major college-wide effort for the past seven to eight years geared toward student success has been the addition and renovation of college buildings to provide state of the art instructional facilities. The transformation of much of the college’s facilities was financed primarily through $92 million dollars of general obligation bonds approved by the voters in 2008. Additional funds such as state capital construction grants, the college’s own internal capital funds and a variety of other sources were added to leverage these funds into over $140 million of capital projects completed during this eight year span. We just completed the final two major projects. One is the construction of a 53,000+ square foot lab and classroom building to serve the college’s Machining, Drafting, and Engineering programs (building 20). The second project is the final phase of the remodel of building 4 which serves the college’s Electronics, Automotive, and Visual Communications programs.
With State funding at $550 million for the 2015-17 biennium, the highest amount it has ever been, Chemeketa’s funding is solid through FY2016-17. But, on the horizon, there are several factors that will likely lead to flat or declining revenues and costs accelerating more quickly. Some of the added cost pressures include paid sick leave for part-time employees, costs associated with Clery Act and Title IX compliance, an escalating Oregon minimum wage, increasing responsibilities with the Affordable Care Act, and most significantly, forecasted employer rates for the Public Employees Retirement System. For revenues, the biggest unknown is the sustainability of community college funding as the state faces similar cost pressures.
There will likely be a prolonged period that will require strong contingency planning and thorough reassessment during each budget year to position the college to meet changing needs and contain costs to match the revenue sources. Typically around eighty percent of the General Fund budget is for personnel costs. The college is striving to maintain and grow the talent level of employees and minimize layoffs while at the same time controlling labor costs. The cooperation of our employee groups has helped tremendously to maintain increases to personnel costs to a manageable level in the past. This cooperation will likely be needed in the future as well.
The college has a long history of strong financial management. We have weathered the recent severe recession on a solid financial foundation. We feel that the level of reserves are adequate to manage the volatility of General Fund revenues, properly fund technology and equipment, and ensure the repayment of long-term debts. We should be well-positioned to manage the looming cost pressures. We remain committed to our students, community and employees as we face new areas of uncertainty. We are hopeful that the Legislature will continue to see the value of investing in all levels of education and translate this into sustained 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.
Respectfully submitted,Julie Huckestein
View past financial documents