Financial OverviewFinancial Overview

Linn-Benton Community Linn-Benton Community CollegeCollege

August 2, 2010August 2, 2010

Community College FinanceCommunity College Finance

More students = less $$ per studentMore students = less $$ per student How a 3% increase in taxes can How a 3% increase in taxes can

equal no additional fundsequal no additional funds 3+5=4+43+5=4+4 National and Oregon economies slow National and Oregon economies slow

recovery = A new normalrecovery = A new normal

Micro EconomicsMicro Economics

Cows –B/E 3 yearsCows –B/E 3 years Pigs – B/E 2 yearsPigs – B/E 2 years Sheep- B/E 1 yearSheep- B/E 1 year OptionsOptions

Stay sameStay same Finance growth Finance growth

“pay as you go”“pay as you go” Finance growth Finance growth

with borrowingwith borrowing

Micro Economics-The CommonsMicro Economics-The Commons

Macro Economics- Macro Economics- The CommonsThe Commons

Macro FinanceMacro Finance

Distribution formulaDistribution formulaThe CCSF “Commons”The CCSF “Commons”

A B C

Calculation of Amount Available per FTE:

 CC Support Fund

Available = $218,864,080.24

 Property Taxes Available

= $135,465,104.00

  Total Available = $354,329,184.24

  Total Amount for Base = $14,064,684.73

 Available for FTE

Distribution = $340,264,499.51

 Equity Available per FTE

= $3664.99

 TOTAL Available per

FTE = $3,664.99

  Base Amount = $720.00

Distribution formulaDistribution formulaA B C F G I J

CollegeWeighted

Average FTE Preliminary

Base Payment

Final College Size

Factor

Final Base Payment with

Size Adjustment

Factor

Prelim TPR (W/out Base) at 100%

EquityPrelim Total TPR (W/Base)

at 100% Equity

Blue Mountain 2,090.95 $792,000.00 1.1347 $898,682.40 $7,663,311.57 $8,561,993.97

Central 4,254.76 $792,000.00 1.0027 $794,138.40 $15,593,675.44 $16,387,813.84

Chemeketa 10,962.02 $792,000.00 1.0000 $792,000.00 $40,175,734.83 $40,967,734.83

Clackamas 7,489.32 $792,000.00 1.0000 $792,000.00 $27,448,288.74 $28,240,288.74

Clatsop 1,360.89 $792,000.00 1.2062 $955,310.40 $4,987,657.96 $5,942,968.36

Columbia Gorge 995.86 $754,510.39 1.2784 $964,566.08 $3,649,827.71 $4,614,393.79

Klamath 1,404.09 $792,000.00 1.2062 $955,310.40 $5,145,995.94 $6,101,306.34

Lane 11,798.39 $792,000.00 1.0000 $792,000.00 $43,241,005.69 $44,033,005.69

Linn Benton 6,563.69 $792,000.00 1.0000 $792,000.00 $24,055,892.58 $24,847,892.58

Mt. Hood 8,725.18 $792,000.00 1.0000 $792,000.00 $31,977,738.42 $32,769,738.42

Oregon Coast 442.60 $555,334.29 1.3513 $750,423.23 $1,622,108.42 $2,372,531.65

Portland 23,489.59 $792,000.00 1.0000 $792,000.00 $86,089,175.17 $86,881,175.17

Rogue 4,537.65 $792,000.00 1.0027 $794,138.40 $16,630,463.74 $17,424,602.14

Southwestern 3,068.13 $792,000.00 1.0108 $800,553.60 $11,244,660.98 $12,045,214.58

Tillamook Bay 344.01 $519,843.28 1.3513 $702,464.22 $1,260,790.89 $1,963,255.11 Treasure Valley 1,829.47 $792,000.00 1.1347 $898,682.40 $6,704,988.68 $7,603,671.08

Umpqua 3,485.19 $792,000.00 1.0081 $798,415.20 $12,773,182.75 $13,571,597.95

Totals 92,841.79 $12,917,687.96   $14,064,684.73 $340,264,499.51 $354,329,184.24

Back to the FarmBack to the Farm

New assumptions-growth has over New assumptions-growth has over utilized the commonsutilized the commons

Not enough grass to feed everyone's Not enough grass to feed everyone's herdsherds

What was once thought to be a What was once thought to be a drought is now “climate change”drought is now “climate change”

Response must changeResponse must change

Macro FinanceMacro Finance

TPR per FTETPR per FTE

TPR per FTE-Inflation adjustedTPR per FTE-Inflation adjusted

Two sides of the coinTwo sides of the coin

Public good – Private GoodPublic good – Private Good

Continuing Service LevelContinuing Service Level2009-11 General Fund appropriation $ 450,500,000 2009-11 Phase-ins, phase-outs, one-time expenditures -

2009-11 Timber tax estimate 25,308

2009-11 Property tax estimate 264,300,000

2009-11 General Operating Revenues $ 714,825,308

Percent of budget Growth

PERS 2.9% 79.1% 16,448,355

Health insurance 9.4% 14.5% 9,728,585

Pension obligation bonds 4.2% 10.3% 3,099,697

Remainder Personal Services 67.0% 3.1% 14,835,842

Remainder Services and Supplies 16.5% 2.4% 2,834,139

Increase in General Operating Revenues 6.6% $ 46,946,618

2011-13 General Operating Revenues 761,771,926

2011-13 Timber tax revenues (25,308)

2011-13 Property tax estimate (284,200,000)

2011-13 Current Service Level $ 477,546,618 Increase in General Fund from 2009-11

LAB 6.0%

What is the budget?What is the budget?

General FundGeneral Fund Auxiliary FundAuxiliary Fund Special Revenue FundSpecial Revenue Fund DebtDebt Capital Projects/ReservesCapital Projects/Reserves Financial AidFinancial Aid EnterpriseEnterprise

All Funds BudgetAll Funds Budget

What about General Fund What about General Fund budget?budget?

State Community College Support State Community College Support FundFund

Property TaxesProperty Taxes TuitionTuition OtherOther

InterestInterest Transfers-InTransfers-In MiscellaneousMiscellaneous

General Fund Budget-General Fund Budget-RevenuesRevenues

General Fund Budget-General Fund Budget-ResourcesResources

Delayed Payment Cash vs Delayed Payment Cash vs AccrualAccrual

QTR 1

QTR 2

QTR 3 QTR 4 QTR 5 QTR 6 QTR 7 QTR 8

$$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$

QTR 1

QTR 2

QTR 3 QTR 4 QTR 5 QTR 6 QTR 7 QTR 8

$$$$ $$$$ $$$$ $$$$ $$$$ $$$$ $$$$

$$$$

CASH

ACCRUAL or RESERVE

EVEN FISCAL YEAR

ODD FISCAL YEAR

Cut in FY10-11 (estimated)Cut in FY10-11 (estimated)

College

Impact of 50/50 across the board reduction and through the formula reduction to the CCSF's Biennial Budget of $450.5

Million

 Prior CCSF FY 11 Payment

No ReductionEstimated Reduction

% Change

Blue Mountain 4,296,398 (436,066) -10.1%

Central 3,899,946 (683,600) -17.5%

Chemeketa 24,290,203 (2,352,422) -9.7%

Clackamas 13,309,670 (1,458,912) -11.0%

Clatsop 2,115,405 (255,518) -12.1%Columbia Gorge 3,771,438 (288,980) -7.7%

Klamath 4,373,434 (359,976) -8.2%

Lane 28,080,189 (2,605,287) -9.3%Linn Benton 18,271,665 (1,570,789) -8.6%

Mt. Hood 22,795,797 (2,016,375) -8.8%

Oregon Coast 1,339,193 (111,308) -8.3%

Portland 60,537,114 (5,400,500) -8.9%

Rogue 6,262,662 (809,022) -12.9%

Southwestern Oregon 6,923,937 (662,975) -9.6%

Tillamook Bay 893,350 (79,163) -8.9%

Treasure Valley 5,869,440 (476,649) -8.1%

Umpqua 10,664,595 (880,579) -8.3%

Total 217,694,437 $ (20,448,120) -9.4%

August 2008 PlanningAugust 2008 Planning

Revenues (Excluding Beginning Balance) and ExpendituresENDING FUND BALANCE

0

4,000,000

8,000,000

12,000,000

16,000,000

20,000,000

24,000,000

28,000,000

32,000,000

36,000,000

40,000,000

44,000,000

48,000,000

52,000,000

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

REVENUE

EXPENDITURES

ENDING FUND BALANCE

Why the “New Normal”Why the “New Normal”

National unemployment National unemployment Reported Reported 9.5%9.5% Estimated when adding discouraged Estimated when adding discouraged 16%16%

Labor ForceLabor Force Grows Grows 120,000120,000 per month per month Private Sector adding Private Sector adding 140,00140,000 jobs a month0 jobs a month Gap between peak and today Gap between peak and today 11,000,00011,000,000 If If 200,000200,000 jobs added per month- jobs added per month- 12 year 12 year

recoveryrecovery If jobs were added at pace of 1990’s- If jobs were added at pace of 1990’s- 4 years4 years

State Expenses vs. RevenueState Expenses vs. RevenueBillionsBillions

Values, Commitments and Values, Commitments and Strategic planStrategic plan

Create opportunities for Create opportunities for success-success-ValueValue

Ability to respond to Ability to respond to emerging needs-emerging needs-Strategic Strategic PlanPlan

ResultsResults Ability to respond to Ability to respond to

opportunitiesopportunities Flexibility & shifting Flexibility & shifting

resourcesresources

Excess budget capacityExcess budget capacity Dedicated to Growth-Dedicated to Growth-

Instruction-Instruction-paypay as you as you gogo

Designated Contingency-Designated Contingency-General Fund-General Fund-oneone time time $1.1M FY1011$1.1M FY1011

Auxiliary Revenue Auxiliary Revenue Program-Program-paypay as you goas you go

Special Revenue Special Revenue Program- Program- pay as you gopay as you go

Values, Commitments and Values, Commitments and Strategic planStrategic plan Create fiscal, physical, and Create fiscal, physical, and

social environments that social environments that support student success support student success and a positive workplace and a positive workplace climate.-climate.-CommitmentCommitment

Diversify and expand Diversify and expand revenue sources, while revenue sources, while maintaining conservative maintaining conservative spending practices.spending practices.--Strategic PlanStrategic Plan

ResultsResults PhysicalPhysical

Madrone HallMadrone Hall White Oak HallWhite Oak Hall Parking ImprovementsParking Improvements

FiscalFiscal Overall decline in General Overall decline in General

Fund and grant revenuesFund and grant revenues Spent over 100% of GF Spent over 100% of GF

salary budget in FY10salary budget in FY10 Shift of cost from state to Shift of cost from state to

studentstudent Drew down reservesDrew down reserves Cost per FTE is declining Cost per FTE is declining

BubbleBubble

Grant and Contracts RevenueGrant and Contracts Revenue

Grant and contract RevenuesGrant and contract RevenuesDiversify SourcesDiversify Sources

Cost per FTE by ProgramCost per FTE by Program

Values, Commitments and Values, Commitments and Strategic planStrategic plan Any available resources Any available resources

should first be invested in should first be invested in efforts related to the efforts related to the strategic plan.strategic plan.

ResultsResults

FY10-11 InvestmentsFY10-11 Investments Learners Learners -$100K-$100K

First year experienceFirst year experience AdvisingAdvising AssessmentAssessment Special accreditationSpecial accreditation

EnrollmentEnrollment On-line services On-line services

improvement improvement -$150K-$150K RevenueRevenue

Bond election planning Bond election planning and architectural and architectural development development -$100K-$100K