cgcc may 5 budget committee

Columbia Gorge Community College

Budget Committee Meeting

Tuesday, May 5, 2015

Call to OrderArthur Babitz

Budget Committee Chair

Welcome and IntroductionsDr. Frank K. Toda,

President

Agenda6:15 pm Public Comment – Proposed Budget and

Achievement CompactArthur Babitz, Budget Committee Chair

Budget PresentationReserve Policy & Multi-year Plan to Achieve Structural Balance

Will Norris, CFO

Departmental Presentations Executive Team & Dept. Directors

Motions Arthur Babitz, Budget Committee Chair

Other Arthur Babitz, Budget Committee Chair

9:30 pm Adjourn Arthur Babitz, Budget Committee Chair

Public Comment


Public CommentThose persons who wish to present testimony concerning the proposed budget and/or achievement compact are asked to come forward, state his/her name and address, and present his/her testimony. Speakers are requested to be specific in their presentations and to focus their remarks upon the relevant issues raised by the proposed budget and achievement compact. Questions and comments should be directed to the Budget Committee Chairperson.

Agenda• May 5th

• Reserve Policy & Multi-year Plan to Achieve Structural Balance• Recommended Reserve Amounts• FY15-16 Continued Accessing Reserves• FY16-17 and out-years, structural balance and plan to rebuild operating reserves

• Departmental Presentations• Instruction

• General Education• Career Technical, Science, & Math• Nursing

• Academic Support• Instructional Administration• Library

• Institutional Support• Governing Board, President’s Office, Public Information, Foundation Support, & Legal• Information Technology• Business Office

• Facilities• Other Funds

• Building lease, Pension Obligation Bond, Capital Projects, Reserve Funds

• May 7th • Review Items from Previous Meetings• Adopt Budget Resolutions (if not adopted on May 5th)

FY15-16 Scenario Planning

Tuition &Fee Decline

(3,500,000.0)

(3,000,000.0)

(2,500,000.0)

(2,000,000.0)

(1,500,000.0)

(1,000,000.0)

(500,000.0)

- Reaction

Fiscal Year 2015-16 Scenario Planning

Expected Tuition & Fees $3.18M

$3.18M



(3,500,000.0)

(3,000,000.0)

(2,500,000.0)

(2,000,000.0)

(1,500,000.0)

(1,000,000.0)

(500,000.0)

- Reaction


$3.18M

-3%

-96K


(3,500,000.0)

(3,000,000.0)

(2,500,000.0)

(2,000,000.0)

(1,500,000.0)

(1,000,000.0)

(500,000.0)

-


Reaction


$3.18M

400K Budgeted Contingency

-3%

-96K


(3,500,000.0)

(3,000,000.0)

(2,500,000.0)

(2,000,000.0)

(1,500,000.0)

(1,000,000.0)

(500,000.0)

-


Reaction


$3.18M

400K Budgeted Contingency

-5%

-159K


(3,500,000.0)

(3,000,000.0)

(2,500,000.0)

(2,000,000.0)

(1,500,000.0)

(1,000,000.0)

(500,000.0)

-


Reaction


$3.18M

400K Budgeted Contingency-10%

-318K


(3,500,000.0)

(3,000,000.0)

(2,500,000.0)

(2,000,000.0)

(1,500,000.0)

(1,000,000.0)

(500,000.0)

-


Reaction


$3.18M

400K Budgeted Contingency-12.5%

-400K


Reaction


$3.18M

Operating Reserve$159K559K


(3,500,000.0)

(3,000,000.0)

(2,500,000.0)

(2,000,000.0)

(1,500,000.0)

(1,000,000.0)

(500,000.0)

-

-12.5%

-400K


Reaction


$3.18M

751KFacilities Reserve$192k


(3,500,000.0)

(3,000,000.0)

(2,500,000.0)

(2,000,000.0)

(1,500,000.0)

(1,000,000.0)

(500,000.0)

-

-12.5%

-400K


Reaction


$3.18M

965K POB Contribution

$213k


(3,500,000.0)

(3,000,000.0)

(2,500,000.0)

(2,000,000.0)

(1,500,000.0)

(1,000,000.0)

(500,000.0)

-

-12.5%

-400K

Pension Obligation Bond

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24

FY25

FY26

FY27

FY28

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Fund Balance

Bond Payment

Contribution

POB Fund Balance

FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28Beg. Balance 1,289,539 1,332,318 1,332,318 1,242,955 654,467 568,035 484,928 406,510 329,247 254,710 189,592 130,710 78,977 33,791 -

Payment 272,720 287,710 302,720 817,720 332,720 347,720 362,720 382,719 402,720 417,720 437,720 458,758 482,496 503,640 237,600Contribution 315,499 287,710 213,357 229,232 246,288 264,613 284,302 305,456 328,183 352,602 378,838 407,025 437,310 469,849 237,600

End Balance 1,332,318 1,332,318 1,242,955 654,467 568,035 484,928 406,510 329,247 254,710 189,592 130,710 78,977 33,791 - -


FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24

FY25

FY26

FY27

FY28

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Fund Balance

Bond Payment

Contribution

POB Fund Balance



End Balance 1,332,318 1,332,318 1,242,955 654,467 568,035 484,928 406,510 329,247 254,710 189,592 130,710 78,977 33,791 - -

Today


FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24

FY25

FY26

FY27

FY28

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Fund Balance

Bond Payment

Contribution

POB Fund Balance



End Balance 1,332,318 1,332,318 1,242,955 654,467 568,035 484,928 406,510 329,247 254,710 189,592 130,710 78,977 33,791 - -

Past Contributions


FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24

FY25

FY26

FY27

FY28

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Fund Balance

Bond Payment

Contribution

POB Fund Balance



End Balance 1,332,318 1,332,318 1,242,955 654,467 568,035 484,928 406,510 329,247 254,710 189,592 130,710 78,977 33,791 - -

Proposed Contributions


FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24

FY25

FY26

FY27

FY28

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Fund Balance

Bond Payment

Contribution

POB Fund Balance



End Balance 1,332,318 1,332,318 1,242,955 654,467 568,035 484,928 406,510 329,247 254,710 189,592 130,710 78,977 33,791 - -

“Catch-up” payment from failed PERS

reform


Reaction


$3.18M

1.9M

5th Payment$944k


(3,500,000.0)

(3,000,000.0)

(2,500,000.0)

(2,000,000.0)

(1,500,000.0)

(1,000,000.0)

(500,000.0)

-

-12.5%

-400K

Reasons for Continued Use of Reserves• The institution has reduced significantly, but

needs one more year to fully adjust to the current revenue environment.



• First layoff in the college’s history



• First layoff in the college’s history• Costs are trending downward

Reasons for Continued Use of Reserves

FY07-08 FY08-09 FY09-10 FY10-11 FY11-12 FY12-13 FY13-14 FY14-15 Expected

FY15-16 Proposed

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

State Tuition, Fees, & Sales Property Tax Other EXPENDITURES

FY 14-15 Budget, assuming no contingency funds expended5th State payment applied to preceding yearTransfers to and from Operating Reserves excluded

CGCC Structural Revenue & Expenditures

Spending through October showed the College on

track for a $2M Structural Deficit in FY14-15


FY15-16 Proposed

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000





Through mid-year cost cutting, the structural deficit has been reduced to a projected $1.3M


FY15-16 Proposed

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000





The 2015-16 Proposed Budget continues to rely on $300k of

one-time funds


FY15-16 Proposed

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000





If Contingency Funds are left unused, the College will end

FY15-16 Structurally Balanced



• First layoff in the college’s history• Costs are trending downward• Academic master planning process will allow the

college to deliberately tailor programs and degrees to community demand

• $15k Gap Analysis currently underway• Full academic plan will include participation of all

stakeholders

Recommended Reserve Amounts


Study of other Community Colleges and Local Governments

General Fund Reserve Contingency Facilities

Lane CC 5% - - -Portland CC 7% Required - -

City of Salem 15% -City of Long Beach 17% -

City of Lake Oswego 16% -City of The Dalles 33% 10% 2.5% -

Study of other Community Colleges and Local Governments

General Fund Reserve Contingency Facilities

Lane CC 5% - - -Portland CC 7% Required - -

City of Salem 15% -City of Long Beach 17% -

City of Lake Oswego 16% -City of The Dalles 33% 10% 2.5% -

Columbia Gorge CC 10% 10% 2.5% 450K

Reserve vs Gen Fund Balance• General Fund Balance

• “Prudent Person” reserves• Cannot be reduced except due to emergency or

otherwise unanticipated circumstances

• Operating Reserve• Deliberately grown during periods of surplus and

expended during periods of low-enrollment• Shields the Institution from the chaotic effects of

rapid changes in size

Reserve AmountsFiscal Year 2015-16

Proposed Draft Policy Amount

5th Payment $944k Reserve for Future Expenditure (9975) $944k

General Fund Ending Balance $479k 10% of Reoccurring Revenues

or one State payment $1M

Operating Reserve $159k 10% of Reoccurring Revenues $1M

Facilities Reserve $192k Current Policy $450k

Contingency $400k 2.5% of Operating Expenditures $230k

$2.17M $3.6M

Multi-Year Plan to Rebuild Reserves


Multi-year Reserve Plan• An appropriate reserve plan must consider:

• Cyclical nature of Community College revenue• Financial stability vs Institutional Stability• Equity issues surrounding of using today’s student

revenue to expend on future students• The ideal reserve plan will:

• Build reserves during periods of revenue surplus• Expend reserves to maintain college infrastructure

during periods of low enrollment• Maintain a basic level of “Prudent Person” reserves

at all times

Enrollment Trends

20002001

20022003

20042005

20062007

20082009

20102011

20122013

20142015

0%

2%

4%

6%

8%

10%

12%

14%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Enrollment as % of District Pop. Oregon Hood River

Enrollment as % of Dist. Pop. & Unemployment

Source: Oregon Employment Department & CGCC Records

Enrollment Trends

20002001

20022003

20042005

20062007

20082009

20102011

20122013

20142015

0%

2%

4%

6%

8%

10%

12%

14%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%




12% - Max unemployment since 1976

Enrollment Trends

20002001

20022003

20042005

20062007

20082009

20102011

20122013

20142015

0%

2%

4%

6%

8%

10%

12%

14%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%




4.7% - Min unemployment since 1976

Enrollment Trends

20002001

20022003

20042005

20062007

20082009

20102011

20122013

20142015

0%

2%

4%

6%

8%

10%

12%

14%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%




6.9% - Median unemployment since 1976

Enrollment Trends

20002001

20022003

20042005

20062007

20082009

20102011

20122013

20142015

0%

2%

4%

6%

8%

10%

12%

14%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%




Building Reserves

Enrollment Trends

20002001

20022003

20042005

20062007

20082009

20102011

20122013

20142015

0%

2%

4%

6%

8%

10%

12%

14%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%




DEFICIT SPENDING

Multi-year Reserve PlanCurrent Period of Low-Enrollment

• FY2015-16 Continues to Rely on $300k Transfer from Reserves

• If Contingency is left unused, the year will end structurally balanced

• FY2016-17 until growth returns• Pass structurally balanced budgets

• Ongoing revenues match ongoing expenditures

• Class sizes will be incrementally moved toward state-wide averages

• 5th Payment reserved for future expenditure

• Continue to budget Contingency above 2.5%

• Year-end savings applied to grow Fund Balance and Reserves

Multi-year Reserve Plan

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 -

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

1,373,244

1,621,877

1,676,594 921,769 1,135,294

761,285 1,600,177

2,557,681

3,175,440

1,197,744

Budgeted Expenditures Difference

Expenditures Under Budget

Multi-year Reserve PlanNext growth period

• Grow courses and temporary personnel to meet student demand

• Maintain core programs and degrees as if enrollment was equal to 2% - 2.2% of District Population

• Grow reserves amounts to equal or exceed the recommended policy

Next period of low-enrollment• Reserves left inaccessible until enrollment falls below

2.2% of district population and the unemployment rate falls below 7%. Reductions to courses and temporary employees occur as an immediate and automatic reaction to declining student enrollment

Economic & Revenue Environment

FY94-95FY96-97

FY98-99

FY2000-01

FY2002-03

FY2004-05

FY2006-07

FY2008-09

FY2010-11

FY2012-13

FY2014-15

FY2016-17

FY2018-19

FY2020-21

FY2022-23

FY2024-250

200

400

600

800

1,000

1,200

1,400

1,600

Actual Student FTE

Severe Recession

Moderate Re-cession

No Recession

Enrollment

Departmental Budgets


Overview

Overview:- Increase average class size to 19-23 from 15- Reduction of 21 positions

- Seven layoffs- Fourteen vacant positions removed

Adjourn
