1.  Attendance
The meeting of the Lane Community College Budget Committee was called to order by John Hamilton at 5:30 pm in the Lane Community College Boardroom. Present were budget committee members Jay Bozievich, Bert Dotson, Paul Holman, Larry Romine, Mike Rose, Kathleen Shelley, Dennis Shine, and Jerry Sirois. Also present were President Mary Spilde and Vice President Marie Matsen. Budget committee members Stephen Alison, Roger Hall, Sandie Hitchcock, Kevin Wells, and Rick Yecny were unable to attend.

2.  Approval of May 11 minutes
Rose moved to approve the May 11, 2005 minutes. Dotson seconded.
Motion carried unanimously.

3.  Reqests for Information
Spilde stated that the Oregon House of Representatives will vote
for Information on a budget bill that allocates $439 M for all Oregon community
colleges. The Oregon Senate budget is lower - $428 M. The May revenue forecast is higher by several million dollars. Democrats wish to use the additional dollars to increase the state budget but Republicans likely will not. The college governance system has fully reviewed some, but not all, of the recommendations before the budget committee today.

Matsen shared several documents providing additional data:

• PERS Reserve ñ four options to fund
• Capital Reserve
• Stabilization Reserve
• Differential Pricing Evaluation
• Tuition Policy
• General Fund Budget Summary
• Summary of All Funds
• Response to R. Spooner budget questions

4.  Discussion
For the past two years, the college has held funds in reserve to pay for expected increases in the cost of the state retirement system for public employees. The current balance of that reserve is $3 M. Of the four options addressing the PERS reserve, the administration recommends option two. Option two adjusts the FY06 funding rate from the current 3.9% to 1.17% at an annual OPE cost of $479,000 and covers estimated rate increases through FY09. Most budget committee members agreed that option two is the prudent course of action as it will cover the increasing cost of PERS (through FY09) while allowing the college to carry out its educational mission.

A Capital Reserve will help support the new Major Maintenance Long-Term Plan and Capital Improvement Plan.

A Stabilization Reserve was established with $500,000 this fiscal year to help offset expected deficits in FY07 and FY08.

The board will need flexibility to provide for investments that advance the strategic position of the college. Strategic investments will be possible if this year’s ending fund balance is above target and if revenue from state resources is higher than projected (currently $416M for Oregon community colleges).

Two years ago, the college began charging additional fees for certain professional-technical and transfer programs that are expensive to offer or have a higher than average number of instructor contact hours. The handout summarizes the impact of differential course fees on enrollment and revenue; and it offers feedback from students and staff. The Physical Education Department volunteered to participate in this program in an effort to become more self-supporting. The administration recommends removing PE classes from the differential pricing list. Lost revenue should be offset by increased enrollment in those classes. Some committee members do not favor differential pricing for any programs and advocate instead for more state support to fund the more costly programs.

The Finance Council recommended revisions to the board policy on tuition. Sunset language is deleted and the comparison of Lane’s tuition to that of other Oregon community colleges is clarified.

The new FY06 budget projections include an additional $1M in state revenue to be placed in a ‘hold for allocation’ contingency account. Board approval is necessary to spend the money, if it is realized. With an additional $1 M, the FY07 deficit is estimated at $1.8 M.

5.  Motions
The following votes are advisory to the Board of Education.

Holman moved to forward PERS Reserve Option #2 to the board for final action. Option #2 results in an annual OPE savings of about $1.1 M over each of the two years of the 2005-2007 biennium. Bozievich seconded.
Motion carried unanimously.

Holman moved to create a Capital Reserve at an initial level of $300,000 with the expectation (not commitment) to add another $300,000 in FY07. Bozievich seconded.
Motion carried unanimously.

Holman moved to increase the Financial Stabilization Reserve by $300,000 for total reserve of $800,000 in FY06. Shelley seconded.
Motion carried unanimously.

Holman moved to set aside any remaining unallocated funds in the Unrestricted Ending Fund Balance. Sirois seconded.
Motion carried unanimously.

Bozievich moved that any total public resources realized in excess of the current projection of $38.6 M be placed in “Hold for Allocation”; and that the board must approve any strategic investment expenditures using these funds or other unrestricted funds carried over from the current year. Sirois seconded.
Motion carried unanimously.

Rose moved to discontinue differential course fees on Physical Education courses, continue differential course fees on the 100-level and 200-level courses in Advanced Technology and Family & Health Careers that currently carry the fee, continue to evaluate the methodology used to asses differential fees, and begin (for first-year students) a Culinary Arts and Hospitality Management two-year differential fee pilot project in Fall 2005. Shelley seconded.
Motion carried unanimously.

Shine moved to recommend that the board continue to adjust the per-credit tuition rate to reflect changes in an appropriate index for two-year public colleges. [Shine’s motion does not include any changes to the language of the policy.] Holman seconded.
Motion carried unanimously.

The following actions constitute Budget Committee approval of the revised proposed budget.

Rose moved that the Lane Community College District budget committee approve the 2005-2006 fiscal year operating budget for all funds totaling $202,715,222. Holman seconded. Bozievich questioned whether this budget has the resources to position the college as a vital community partner and to achieve and sustain fiscal stability.
Motion carried unanimously.

Rose moved that the Lane Community College District budget committee approve taxes for the 2005-2006 fiscal year at the permanent rate of $.6191 per $1000 of assessed value for operating purposes, and in the amount of $5,193,669 for payment of bond principal and interest. Dotson seconded.
Motion carried unanimously.

6.  Adjourn
Chair Hamilton adjourned the meeting at 8:30 pm.

Approved:

_______________________________ _______________________________
John Hamilton, Chair                Date  Mary Spilde, President             Date

Recorder: Mary Bolton