The proposed General Fund budget for 2002-2003 is $69,334,973.  This is a decrease of 7.5% from the budget for 2001-2002.

The largest revenue source for the college is state appropriations.  The 2001 State Legislature increased total community college appropriations by $45 million for the 2001-2003 Biennium.  Subsequent state revenue forecasts have caused the Governor and the Legislature to make major changes to state appropriations.  The Governor reduced biennial appropriations to community colleges earlier this year by 1%.  During a March Special Session, the Legislature reduced appropriations another 2%.  At the time of printing of this Budget Document, it is expected that the Governor will call the Legislature into Special Session in June 2002 to make decisions regarding more decreases in total state revenues.  

For the purposes of preparing this budget, the administration has used projections from the Office of Community Colleges and Workforce Development that show a total 4% decrease in the original biennial appropriations for community colleges. 

• State revenues to Lane are projected to decrease by $2,188,465 or 6.9% from the 2001-2002 budgeted revenues to $29,699,829. 
• Property tax revenues are projected to increase by approximately 5.3 percent or $579,678 over current year budget. 

• Tuition revenues are budgeted at $16,897,506, which is an increase of $2,432,567 over the current projections for Fiscal Year 2002. 
• Enrollment is projected to decrease by 6.7% because of reductions in instructional programs and some enrollment loss from the large tuition increase.
• Overall, Instructional Fees are budgeted to increase $1,184,494.
• Because some instructional programs will be moved to a new fund (Fund IX-Special Revenue Fund-Admin Restricted), the Instructional Fees revenue budget in the General Fund will decrease by 24.1% from the current year budget.
• Unrestricted Net Working Capital is budgeted to decrease by $1.2 million and Restricted Net Working Capital is budgeted to decrease by almost $3 million.  

It is clear that Lane Community College is facing a fiscal challenge far greater than any it has faced in the past.  Expenditures have exceeded Revenues in three out of the last five years including Fiscal Years 2000 and 2001. Expenditures will exceed Revenues in the current year as well.  The goal of the Executive Team in recommending a budget with a large tuition increase and large reductions in General Fund support of programs and services is to bring the college to financial stability in the next fiscal year.  At the same time we want to stop any erosion of quality because of reductions in past years and focus on increasing quality in all of our instructional and service offerings.  We believe this is imperative in order to best serve district residents.  Some significant needs of the college are not addressed in this budget and will become a focus of the Executive Team in budget development for Fiscal Year 2004.  These include, for example, physical plant needs that are seriously underfunded and replacement/upgrade of major capital equipment.

The methodology used to project Revenues and Expenditures was changed for this budget development cycle.  Most individual components of Revenues and Expenditures were projected this year using statistical trend analysis based on actual historical Revenues and Expenditures.  The previous methodology was based on showing all restricted revenues as expended which consistently overstated Expenditures for the purposes of projections. The new methodology should state projected Expenditures that are much closer to actual Expenditures at year-end. However, the new methodology is less conservative and carries a higher risk of underestimating Expenditures and overestimating Revenues.  Because budget laws require total resources (including the Beginning Fund Balance) and Expenditures to balance, the Budget Document includes budget expenditure authority for all anticipated resources in Fiscal Year 2003.

This budget document is consistent with the budget laws of the State of Oregon and other applicable policies.  The budget is prepared on a modified accrual basis of accounting (revenues reported when earned; expenditures reported when the liability is incurred; taxes accounted for on a cash basis).  The result is that carryovers of financial obligations from year-to-year are precluded and projections of anticipated revenue are not inflated.

The format and summarization are consistent with the Oregon Accounting Guidelines of Community Colleges.  This budget expresses the basic and essential fiscal requirements of Lane Community College as set forth by the Board of Education.  The 2002-2003 Budget Document is submitted herewith for your consideration and action.  The staff and I are ready to assist you in the important task of reviewing this document.

Respectfully,  

s/Mary F. T. Spilde, College President and District Clerk