2021-22 Budget Process for the Upcoming Fiscal Year 2022-23

Dear Colleagues,

I understand the Board of Education and Budget Committee's Approved Budget, which reduces the fiscal year 2022-23 budget by $2 million is causing stress and consternation. Many of you have questions about the impact of the decision and about the process we will use to make reductions.

Fiscal year 2022-23

We are being asked to cut $2-million this upcoming fiscal year (2022-23). This likely will be one-time cuts (e.g., freezing travel or other short-term savings strategies for one year). These reductions should not include layoffs, and under the clear direction of the Board of Education, should have minimal impacts on students.

We will be convening the Budget Advisory Group (BAG) starting in July and meeting over the course of the summer to develop/design a collaborative process for identifying these reductions. All BAG members, including those not on contract over the summer, are encouraged to participate and will be compensated. Then this fall we will begin the process of identifying the $2-million in reductions.

Fiscal year 2023-24

Even with the $2 million in one-time reductions taken for 2022-23, the college will still have a 3-year forecast gap of $10 million through the fiscal year 2024-25. This means the budget process for fiscal year 2023-24 will need to generate $5 million in ongoing reductions to balance to the new 3-year forecast. These reductions will need to be ongoing, not one-time cuts.

The college values its commitment to shared governance, community engagement, and intentional inclusion practices. Therefore, we need to take some time to thoughtfully identify ongoing reductions over the next year to address future forecast gaps. This will be an ongoing process during the 2022-23 academic year.

Enrollment

We are acutely focused on the recruitment and retention of students, and we all play a part in positively impacting student outcomes and enrollment. We are monitoring enrollment on a weekly basis, as it impacts our revenue streams. If we can increase enrollment beyond the 15% increase in our forecast, or from our current projected 4,600 FTE (full-time equivalency) to 5,300 FTE, it could make a significant difference in the forecast gap. If enrollment does not recover by 15%, as assumed in the remaining two years of the forecast, we could face additional ongoing reductions.

Budget webinar

We will be holding a budget webinar question and answer session on Thursday, June 2, at 11:30 a.m. Here is the link: https://clackamas.zoom.us/j/95232386666, and be on the lookout for a calendar invite.

We are asking folks to submit their questions ahead of time so we can better understand what questions you have and how we can best respond to them. If you would like to submit a question, please use this Google form: https://forms.gle/wBWc6rjSjjHcCGHz6. Questions will be accepted through Tuesday, May 31.

Sincerely,

Tim

Dear Colleagues,

The CCC Budget Committee held its annual meetings on May 11 and May 18 to review and approve next fiscal year's budget.

The proposed budget presented to the Budget Committee for consideration was $145,535,948. The fiscal year 2022-23 budget was balanced by backfilling with reserve funds, however, a three-year financial forecast gap of $2 million remained.

It is the role of the Budget Committee, which is composed of Board of Education and community members, to be a steward of how the college manages its budget and ensures our fiscal health. As such, the committee requested the college cut $2 million from the fiscal year 2022-23 budget, and last night approved a budget of $143,535,948.

This means we will need to convene the Budget Advisory Group (BAG) this summer and start working in the fall to identify reductions and cost savings. I am committed to having a transparent and inclusive process and ask for your active participation.

Vice President Plotkin has assembled a group to address student enrollment and retention. That work has started and will continue. We will also continue our work toward returning to campus and providing learning and resources that meet the needs of all our students.

Sincerely,

Tim

Dear Colleagues,

As we near the end of this year's budget cycle, I want to highlight a few key points from the 2022-23 budget, which will be going to the Budget Committee this week for a first reading.

As I mentioned in my May President's Message, we are starting to see enrollment moving in the right direction, but without a significant change in FTE and additional funding from the state, we will still be struggling with an operating deficit.

We have a balanced budget next year because federal stimulus dollars are helping offset our loss of tuition revenue. Those dollars have all been allocated, and as of now, we have not heard of any new rounds of funding.

CCC plans to continue to adjust its operations and take a strategic approach for the future. The pandemic has provided the unanticipated opportunity to test past assumptions and build upon what has been learned through remote operations.

Budget Highlights

• Enrollment: Enrollment for reimbursable FTE (full-time equivalency) is up 6.3% compared to the fifth week of spring term 2021. Our current year-to-date FTE is still down 3.8% compared to this time last year and 28% down compared to pre-pandemic.
• PERS: One significant impact on our financial position is the Public Employee Retirement System (PERS). CCC doesn't anticipate PERS rate relief until at least 2034-35.
• Structural deficit: Our expenses continue to outpace our revenues in the forecast.
• Tuition increase: For fiscal year 2022-23, the Board of Education approved a $6 per credit tuition increase. The increase in tuition will partially offset the revenue losses anticipated due to the change in enrollment.
• State funding: For the 2021-23 biennium, state funding for the 17 community colleges was approximately $699 million. The big question is what will the state allocate for 2023-25.

I know many of you are working hard to address our enrollment challenges. We are developing a Strategic Enrollment Management Plan. We are offering more wraparound services in multiple modalities. Our new Navigators are getting students to the resources they need. We are adjusting how we deliver our curriculum based on what is best for the program and what our students say they need.

With all the hardships we have been dealing with this year, a balanced budget gave us a much-needed reprieve this year. A challenge moving forward will be to align anticipated employment levels with uncertain levels of enrollment. In the short term, we have been holding many positions vacant. In the next year, we will likely need to look toward personnel and program reductions as a result of a projected budget deficit, depending upon the trajectory of CCC's ongoing enrollment.

Our past, present, and future success depend on the extraordinary efforts of so many. Thank you for your dedication and for all that you do in service to our students, our communities, and each other.

Budget approval process:

• May 11 - First Budget Committee meeting
• May 18 - Second Budget Committee meeting
• June 29 - Board of Education budget hearing and adoption

To view the full budget message and the proposed budget, visit https://meetings.boardbook.org/Public/Agenda/1412?meeting=528080.

Warmly,

Tim

Dear Colleagues,

Though this fall we were forecasting a rosier picture for CCC’s 2022-23 budget, the impacts of lagging enrollment and significant increases to inflation are impacting our bottom line going into the next couple of years.

Federal funding is helping us balance the budget this current year, but our loss of enrollment has eaten up nearly all of those funds. Other external factors are also impacting our budget.

Here is what we know as of now:

Where expenses are rising:

• PERS costs (up $500,000)
• Inflation/personnel (up $1.7 million)

Where revenue is decreasing:

• Tuition revenue (down $2 million)
• State allocation of funding (down $800,000 due to lower enrollment compared to our larger peer colleges)

Where revenue has increased

• Federal funding has been used to offset the above lost revenues ($2.8 million)

Where we are saving money:

• Materials and services ($1.3 million)

We are currently projecting a nearly balanced budget for 2022-23, but then a deficit of $1.2 million for 2023-24. However, increased enrollment, a modest tuition increase, and increased funding from the state (which is an unknown until late spring 2023), may help fill the gap.

2022-23 proposed tuition and fees

At its Feb. 16 meeting, the CCC Board of Education conducted the first reading of proposed tuition and fees for 2022-23. The recommended increase is $5/credit hour and no changes to the universal fees.

During discussion, the board requested that the college to explore raising tuition $6/credit hour. A $5/credit hour increase could generate an additional $1,070,000 over the course of the forecast, and a $6 increase would generate $1,284,000.

More information will be brought to the board at its March 16 meeting, when the board is slated to vote on tuition and fees. 

Budget principles

Also at the meeting, the Board of Education approved carrying over the 2021-22 budget principles to 2022-23. These are guidelines and overarching values the college references during the budgeting process. 

The principles are:

• Ensure budget supports improvements in Mission Fulfillment by integrating Strategic Priorities and program and service area assessment results with budget allocation decisions.
• Consider CCC’s affordability, district median income, and comparability with other metro-area community colleges when establishing total student costs, including tuition rates.
• Focus on fiscal responsibility, return on investment, and strategic resource realignment in budget allocations, and minimize ongoing resource requests beyond the three-year horizon.
• Maintain Board-required minimum ending fund balance throughout a three-year forecast, with an emphasis toward balancing revenues and expenditures over a four-year planning horizon.

Innovation requests

We received 16 innovation fund requests. Fourteen of those are currently being evaluated by the innovation team. Recipients will be announced following some additional process steps, including a stop at College Council. 

Budget improvement process

Work is continuing on the budget improvement process. As a reminder, these are the areas we have workgroups addressing:

• Alignment with the strategic plan/priorities (Leads: Jason Kovac/Jeff Shaffer)
• Alignment with the interim DEI framework (Lead: Casey Layton)
• Level of knowledge needed to provide input/support the process (Leads: Jeff Shaffer/Sue Goff)

I would like to extend my thanks to everyone who has been committed to this ongoing budget improvement work. 

Budget timeline

• March 16 - Board of Education forecast update, tuition and fees vote
• March 29 - Budget Advisory Group meeting (BAG) 
• May 11 - Budget Committee meeting #1
• May 18 - Budget Committee meeting #2
• June 29 - Board of Education budget hearing and adoption

Please stay tuned for opportunities to learn more as we continue to develop the budget and look for ways to stay engaged. 

Warmly,

Tim

Dear Colleagues,

Though this fall we were forecasting a rosier picture for CCC's 2022-23 budget, the impacts of lagging enrollment and significant increases to inflation are impacting our bottom line going into the next couple of years.

Federal funding is helping us balance the budget this current year, but our loss of enrollment has eaten up nearly all of those funds. Other external factors are also impacting our budget.

Here is what we know as of now:

Where expenses are rising:

• PERS costs (up $500,000)
• Inflation/personnel (up $1.7 million)

Where revenue is decreasing:

• Tuition revenue (down $2 million)
• State allocation of funding (down $800,000 due to lower enrollment compared to our larger peer colleges)

Where revenue has increased

• Federal funding has been used to offset the above lost revenues ($2.8 million)

Where we are saving money:

• Materials and services ($1.3 million)

We are currently projecting a nearly balanced budget for 2022-23, but then a deficit of $1.2 million for 2023-24. However, increased enrollment, a modest tuition increase, and increased funding from the state (which is an unknown until late spring 2023), may help fill the gap.

2022-23 proposed tuition and fees

At its Feb. 16 meeting, the CCC Board of Education conducted the first reading of proposed tuition and fees for 2022-23. The recommended increase is $5/credit hour and no changes to the universal fees.

During discussion, the board requested that the college to explore raising tuition $6/credit hour. A $5/credit hour increase could generate an additional $1,070,000 over the course of the forecast, and a $6 increase would generate $1,284,000.

More information will be brought to the board at its March 16 meeting, when the board is slated to vote on tuition and fees.

Budget principles

Also at the meeting, the Board of Education approved carrying over the 2021-22 budget principles to 2022-23. These are guidelines and overarching values the college references during the budgeting process.

The principles are:

• Ensure budget supports improvements in Mission Fulfillment by integrating Strategic Priorities and program and service area assessment results with budget allocation decisions.
• Consider CCC's affordability, district median income, and comparability with other metro-area community colleges when establishing total student costs, including tuition rates.
• Focus on fiscal responsibility, return on investment, and strategic resource realignment in budget allocations, and minimize ongoing resource requests beyond the three-year horizon.
• Maintain Board-required minimum ending fund balance throughout a three-year forecast, with an emphasis toward balancing revenues and expenditures over a four-year planning horizon.

Innovation requests

We received 16 innovation fund requests. Fourteen of those are currently being evaluated by the innovation team. Recipients will be announced following some additional process steps, including a stop at College Council.

Budget improvement process

Work is continuing on the budget improvement process. As a reminder, these are the areas we have workgroups addressing:

• Alignment with the strategic plan/priorities (Leads: Jason Kovac/Jeff Shaffer)
• Alignment with the interim DEI framework (Lead: Casey Layton)
• Level of knowledge needed to provide input/support the process (Leads: Jeff Shaffer/Sue Goff)

I would like to extend my thanks to everyone who has been committed to this ongoing budget improvement work.

Budget timeline

• March 16 - Board of Education forecast update, tuition and fees vote
• March 29 - Budget Advisory Group meeting (BAG)
• May 11 - Budget Committee meeting #1
• May 18 - Budget Committee meeting #2
• June 29 - Board of Education budget hearing and adoption

Please stay tuned for opportunities to learn more as we continue to develop the budget and look for ways to stay engaged.

Warmly,

Tim

Dear Colleagues,

It is once again that time of year when we start working on the budget process for the next fiscal year. 

Balanced budget

The good news is that we have a balanced budget for the next three years primarily due  to one-time federal funding. The bad news is, the budget is balanced because of one-time funding, which means if our enrollment doesn’t turn around, we will soon be facing a structural operating deficit once again.

Additional savings helping us balance the budget are operational savings due to remote work, the use of all our remaining PERS reserves, and a savings of $2 million from issuing pension bonds.

Federal funding

Enrollment headcount is the lowest it has been since 1985. Thankfully, federal stimulus dollars are helping us close a sizable gap created by the loss of FTE. The vast majority of stimulus dollars are being used to cover our loss of tuition revenue. Those funds accounted for 7% of our general fund budget for 2020-21.

Budget process improvement

We continue our work this year to improve the budget process. A small workgroup has identified three goals to work on this year:

1. Aligning with the Strategic Plan and priorities
2. Aligning with the Interim Equitable Decision-Making Framework
3. Exploring the level of knowledge needed to provide input/support the budget process (e.g., audiences and their needs)

Innovation funds

Though there is no room in the budget for substantial additions to department budgets this year, the college is still seeking innovative ideas to advance the college. If you have an innovative idea to generate revenue or create efficiencies, I encourage you to submit an application. The deadline is Dec. 3. Visit the Innovation Fund page (must be logged into portal) for more details and the application. 

Budget process page

Like the last two budget cycles, we will be maintaining a budget process webpage, where you can find all relevant budget messages, presentations, timelines and more. This page will be updated throughout  the year.

It is a relief that we do not have to go through a budget-cutting process again this year. I hope we can use this year to refine and rebuild our budget process, as well as continue to innovate. I look forward to engaging with the college community as we move through this year’s budget process.

Kind regards,

Tim