FROM:   Mary Spilde

RE:  2003-04 Budget Process

DATE:  October 28, 2002

We have delayed rolling out the 2003-04 budget process because of the need to focus on the rebalance for this year.  Now that the board has approved a plan for this year we want to lay out the process and calendar for next year's budget.  

There is still a great deal of uncertainty about the 2003-04 budget as a result of the following:
*Probability of further state revenue shortfalls to be announced in December 
*Current Governor's budget is likely to be a "bare bones" budget and will not be announced until December 1
*New Governor's budget not announced until February 1
*Result of the January 28 ballot measure is unknown.
*Modified state funding formula will not be approved until December
*Legislature will be in session and is unlikely to conclude before we need to approve our budget

We do know that the state is facing a $1.5 billion shortfall next biennium.  That deficit is reduced to a little less that $1 billion if the ballot measure passes.  Therefore, it is very likely that community colleges will see more reductions in our state revenue.  The preliminary state figures range from a budget that continues our current service level plus a small amount for growth to a 30% reduction.  As you can see that's quite a range of possibility.  Further, on the expense side we know that we need to budget for the PERS liability, major maintenance and equipment replacement.  We will also be bargaining economics with both unions. 
All of this makes it difficult to develop projections for next year, yet we cannot wait to have all the information before we start the budget development process. We need to move forward despite the uncertainty, building in enough flexibility to adapt, as information becomes known.

We plan for the process to be similar to last year's with some improvements based on what we have learned.  The Criteria Application Work Group has been meeting over the summer to review their process and they have made recommendations for improvement, including slight changes in the criteria.  Later this week, we will be asking you to comment on the criteria.  We will be reviewing our budget projections with the board in November and will need to settle on planning assumptions at that time.  We plan to meet with representatives of employee groups to review the assumptions, projections and criteria before presenting them to the board on November 13. 

College Council is moving forward with the update of the strategic plan.  There will be focus groups of the different community groups we serve and a Citizens' Committee will review our vision, mission, values and strategic directions and make recommendations. All of this will result in an update to the strategic plan that ultimately the board will be asked to approve.  The updated plan will guide our budget decisions.  

Finally, divisions and departments will be asked to complete the templates based on the criteria by early December.  We have asked Kaaren O'Rourke, faculty  representative on the Transparency Work group, to help us implement the recommendations form that group. 

As you can see there are several things going on simultaneously amid a great many unknown factors.  This is just where we are and is pretty much out of our control so we need to focus on what we can control.  I am confident that all of this will come together at some point but we cannot wait to step through this in a linear fashion or we will not meet the deadlines that are imposed on us.  

I have attached the draft calendar for the budget process.  We will be discussing this with the board in November.

Despite all this uncertainty and the prospect of another difficult year budget-wise, I know that you will try to focus on why we are here.  I know that great things are happening in classrooms, offices and buildings across the college as a result of your good work.  Hopefully, that will help sustain us as we meet these challenges.  

We will be communicating with you as things unfold and as always we welcome your thoughts on ways to improve the process.

If you have any questions, please do not hesitate to contact me.    

Mary.