TO:       LCC Employees

FROM:   Mary Spilde

RE:       Update on the budget proposal

DATE:   January 13, 2005

As I mentioned in the all staff meeting yesterday, the board met last night. They discussed my proposal to deal with the budget shortfall for '06 and '07. All board members indicated that they supported the proposal. In summary, based on our projections the college will have a deficit of about $2.9 million for '06 and $4.3 million for '07. There are many unknowns in this projection due to PERS, health care costs, funding formula distribution, as well as the amount we will receive from the legislature. Given all these uncertainties, we do not think it is wise to plunge into huge reductions or tuition increases. Therefore, we do not plan to make dramatic recurring reductions to the budget for '06. Rather we will do what we can to contain costs and reduce one time expenditures to more closely align expenses with revenues for '06. The board will approve the process to accomplish this next month. Simultaneously, College Council will develop the process to address the deficit for the '07 budget. We will ask the board for approval of this process in May, after there has been an opportunity for college-wide review. Following that, we will start the to implement the process to balance the '07 budget if we need to. Hopefully, some of the "unknowns" will go our way and our deficit will be reduced. One caveat that bears repeating is that this is our plan for now and that it may change as we go through the legislative process. If we have to change course I will make sure that you hear about it.

I am hoping that our strategy will allow the college to focus for the rest of this year on what is really important: serving students. It has been wonderful this year and last to go about our work without the specter of budget deficits hanging over our heads. While it's important to understand that there are potential budget challenges looming it's even more important for us to focus on the recruitment and retention of students. Please do all you can with your colleagues to think about how we can increase enrollment slightly. It will make all the difference.

For those of you who were not able to make it to the all staff meeting yesterday, the power point presentation and the budget projections will be up on the web within the next few days.

Thanks.
Mary.