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2007-2008 Budget Message

The 2007-08 proposed budget is an expenditure plan based upon anticipated revenues and contractual obligations. The budget is based on achieving a target ending (carry over) balance of 5 percent, a goal established by the College President and confirmed by the MHCCD Board of Education. It assumes the state funding level will be equivalent to that proposed by the Governor, and continuation of the current distribution formula. If the funding level is changed during the current Oregon Legislative Session, the budget may require adjustments in accordance with local budget law to ensure a 5 percent ending balance. Three important points embodied within the proposed budget are: student access will not be reduced due to specifics of this budget, all staff are working cooperatively to meet the budget challenges, and a reduction of the PERS reserve fund will not jeopardize operational stability.

MHCC’s Gresham campus is located on 225 acres and serves a district of more than 270,000 residents within an area in excess of 950 square miles. In addition to the Gresham campus, classes are offered at The Bruning Center for Allied Health Education at MHCC and the Maywood Park campus, as well as instructional space in various locations throughout the district. A seven member board governs the College. All board members serve without monetary compensation and are elected to four-year terms; five represent zones and two serve at-large.

The college mission, vision and values provide a foundation for planning and activities, while the Board’s priorities provide strategies for fulfilling the mission. The MHCC 2010 strategic plan takes all of those elements into consideration and gives direction and focus to college operations and initiatives.

MT. HOOD COMMUNITY COLLEGE
MISSION, VISION & VALUES

MISSION STATEMENT

A COMMITMENT TO THE COMMUNITY

Mt. Hood Community College affords all people a knowledge-based education, giving them the ability to make life choices, adapt to change, build strong communities, contribute to and derive benefit from the new economy, and become part of a skilled workforce.

VISION

The college is dedicated to:

Student learning as the most important outcome
Being a comprehensive community college with initiatives in information, engineering, bio-medical and biological technologies
Seamless transfer opportunities to colleges, universities and careers
Continued, directly applicable, learning at all stages of career and life
Striving to meet learning needs when and where students prefer
Providing learner support

VALUES

Integrity: infusing high standards into all MHCC efforts.
Respect: showing thoughtful consideration for all MHCC community members.
Innovation: promoting creativity and flexibility in all aspects of the MHCC experience.
Service: enhancing opportunities for student achievement and success.

College Goals

Goal #1. Knowledge-Based Workforce. Provide knowledge-based* educational offerings to meet regional economic development requirements.

Goal #2. Access and Diversity. Provide affordable and attractive option for members of the community seeking a post-secondary education, including the creation of an environment in which diversity thrives.

Goal #3. Transitions/Outcomes. Strengthen support for student success and provide seamless transfer opportunities to colleges, universities and careers.

Goal #4. Institutional Capability. Strengthen institutional capability to expand opportunities for student success and financially sustain programs and services.

*Knowledge-based education is characterized by four elements, which must be addressed by all programs within the college:

Interdisciplinary approach to learning
Students receiving skills necessary to function effectively in an information-based society. (That is, able to work in groups, think critically, and possess an appreciation for the humanities, to name a few.)
Strong technological component
High-level skills being imparted to students

Board Priorities

Create an environment, which supports knowledge based education to prepare MHCC students for participation in and contributions to the Knowledge Based Economy and Regional Economic Development.
Create a supportive environment for an increasingly diverse student population utilizing sensitive educational and student service opportunities, which will address the need for an increasingly diverse workforce.
Increase the number of traditional transfer and professional technical students who eventually attain a baccalaureate degree through increased transfer opportunities and support.
Increase the rate of student persistence by 3 percent per year to enhance each student’s ability to attain educational success.
Increase access to college programs in a time of shrinking resources by increasing efficiency and productivity.
Create alternative revenue streams to support the operating and capital budgets of the college.
Increase enrollment of graduates from the district’s high schools by 7 percent this year through improved recruitment efforts.

Adopted by the MHCCD Board of Education 9-14-05
Re-confirmed 9-13-06

The strategic planning process is aligned with the budget plan to ensure that expenditures are tied closely to the college mission statement. The planning includes an analysis of previous years’ expenditure plan success and provides a basis for refining the future budget to better meet the goals and priorities of the college. The processes of budget development, strategic planning, and assessment of progress toward college goals are activities during which input from the entire college community and the public is solicited.

The college maintains a multi-year fiscal projection and forecast of revenue and expenditures. Budget assumptions are developed each year based on enrollment and funding trends, contractual agreements, and forecasted price increases. This information provides a framework for consideration of highest priority needs.

The following trends informed the development of the 2007-08 expenditure plan:

Recently the college has overspent revenues in a purposeful way, which resulted in a considerable reduction in the general operating fund balance. Due to an unanticipated 5 percent decline in tuition revenue in 2006-07, additional planned reductions in reserves are required. In the 2007-08 plan, PERS fund reserves are used in a responsible way to ensure the projected ending balance is at or near the 5 percent ending balance target.
The proposed budget recommends no increase in tuition and anticipates static enrollment which together result in no tuition revenue growth. Given historical enrollment trends experienced by the college and uncertain economic conditions, the underlying assumption of no significant growth in tuition generating enrollment is a prudent one.
The need to maintain, upgrade and repair the physical plant has a significant influence upon this and future budgets. Since the 2006 general obligation bond measure dedicated to the facility was not approved by the voters, only the most important and critical facility needs will be met within the constraints of the budget. The danger of this situation is that funds needed for other crucial college services may be required to support the facility.
Another important trend is the need for increased services for childcare and early childhood education in our district. To address this trend, the Board has declared the replacement of the Child Development Center (CDC) as the highest facilities priority. The CDC is a college partnership with the Early Childhood Education (ECE) and Head Start programs. The CDC provides high quality, affordable child care for MHCC student parents and community members while offering a unique laboratory experience for ECE and other program students. A partnership with Head Start, the state, minimal district resources and fund raising will provide the support necessary to replace the aging facility and allow for expanded opportunities for students and the community.

Several assumptions were identified in the development of the 2007-08 budget and discussed with all college constituencies, including the Board, before the budget plan was prepared. These assumptions are:

No tuition increase;
No lay offs or program reductions;
COLA increases, step advancements and other district obligations will be met;
A reduction of the board established PERS reserve;
Increase the equipment fund over 2006 levels to $100,000
Hire five full time faculty;
Reduce the work year by one day for all staff;
Non-faculty hiring will be considered through a case-by-case analysis of need;
Create savings in excess of $100,000 through increased efficiencies; and
Reduce the college’s need-based financial aid fund in light of the proposed increase in State financial aid.

The trends and assumptions discussed above were considered during the budget development process and are included in 2007-08 expenditure plan. Adjusting resources and programs to meet emerging economic conditions will be critical, therefore the college will consider the positioning of the institution in this changing environment. Efficiencies will be developed and continued efforts will be made to contain costs. Student recruitment, retention and persistence will increase in order to create economies of scale and leverage effective use of resources. Efforts to create additional innovative and productive public-private partnerships are necessary. Since the Board has declared replacement of the Child Development Center a top priority, time and effort will also be dedicated to developing capital funds and ensuring a sustainable operating budget for a new facility.

The 2007-08 proposed budget includes elimination of the Food Services and Special Projects Reserve Funds. Beginning July 1, 2007, all food service related revenue and expenditures will be accounted for in the general fund. Revenue and expenditures for this fund are estimated at $55,000. The Special Projects Reserve Fund is no longer required due to projects completed utilizing ASH Mountain funds and Full-Faith and Credit Obligation proceeds. Those projects include the Student Services area remodel, construction of The Bruning Center for Allied Health Education at MHCC, the Library remodel, and classroom upgrades. Remaining resources estimated at $200,000 will be transferred to the Physical Plant Maintenance Fund.
Other factors affecting the budget include:

Enrollment

Oregon community college enrollment remained relatively flat in 2006-07. According to a recent statewide study that examined the relationship between state appropriations, tuition and enrollment, statewide SFTE is projected to increase between 2.7 percent and 3.1 percent from 2006-07 to 2008-09. Despite this anticipated rise in enrollment, MHCC’s FTE and headcount in 2007-08 will remain below their historical high of 2001-02. Increases to tuition and fees, necessitated by insufficient state funding and when adjusted for inflation are anticipated to be nearly 50 percent higher in 2007-08 than in 2001-02, are the primary causes of the enrollment decline.

The complexity of the enrollment forecast is compounded by declining high school graduation rates and going-to-college rates. Over the past decade the going-to-college rate in Oregon decreased by 18 percent, due in part to a drop in the number of students graduating from high school. In addition, MHCC’s capture rate of district high school students dropped from 25 percent in 2001 to 13 percent in 2006.

Deficient State Funding

Over the past several years state funding has decreased from representing 55 percent of general fund revenues to a projected 46 percent ($23.2 million) in 2007-08. In response, tuition rates have been increased to help bridge the gap, thereby reducing accessibility and affordability of a community college education. Since tuition increases directly affect enrollment, the college is committed to holding tuition flat at $66 per credit for the foreseeable future.

In 2007-08 tuition and fee revenue is projected to account for $14.4 million (29 percent) of general fund revenue, representing a 5 percent decrease in actual tuition revenue compared with 2006-07. Rounding out the general fund revenues are property taxes representing nearly $8.9 million (18 percent), with $3.4 million (6 percent) provided by investment and other income sources.

In summary, the college remains on strong financial footing and the proposed budget demonstrates and reflects the strength of the college’s commitment to its students and community. Support of students remains a priority as demonstrated by increased instruction and student service budget allocations, including faculty hires. As reflected in a recent climate survey, staff take great pride in the student-centered focus of their work. The college values its diverse community, including business and industry partners, and is committed to serving them. No drastic measures such as lay offs are anticipated for the next year, but continued cooperation by all is necessary to ensure a bright future for MHCC.