2013-14 budget seeks ‘shared sacrifice’

The president’s MHCC budget proposal was unveiled Wednesday at the district budget committee meeting, leaning heavily on a framework of “shared sacrifices.”

President Michael Hay said the proposal, when fully implemented, would enable the board to enhance affordable course offerings, provide competitive compensation packages for employees and support engagement with the community.

Hay said the budget plan is based on shared burden across the campus, on which he elaborated: “From our employees, in agreeing to compensation and benefit contract changes; and from from all of us, in working more efficiently”.

As a part of a two-year deficit reduction effort, MHCC has pursued a balanced approach: 30 percent of deficit reduction will be covered each by increased student tuition and fees; administrative reductions; and reduced employee costs. The remaining 10 percent of the budget deficit reduction will be taken from enrollment and state funding.

No new tuition increase for students is proposed for 2013-14.

Already, the school has banked $2.3 million in higher revenues from tuition and fee increases imposed last September.

However, a small technology fee increase is proposed to help students better gain access to technology. This will hope to bring the college in line with neighboring community colleges.

The board believes student enrollment is going to increase by 2 percent over current levels, bringing in $200,000 more in revenue.

The goal of decreasing administrative costs also has been partially met this school year, with projected savings of $1.9 million to $2.3 million. To close the remainder of the deficit, Hay proposed that the college restructure the Administration, Student Services, Payroll and Benefits and Facilities departments for additional cost savings. He suggested the college also continue “Smart Growth” initiatives, its attempt to eliminate direct program subsidies to the Aquatic Center and efforts to reduce uncollectible tuition through systematic attendance taking and reporting.

There is also hope that the state of Oregon will help fill the funding gap created by previous, lower-than-predicted enrollment growth.

Several assumptions in Hay’s plan rest on many variables. According to the proposal, the state has “bottomed out” economically and will not implement another “holdback” of funds. Employee healthcare costs will rise by 12 percent. Public Employee Retirement System (PERS) costs will remain at $1 million.

Other assumptions include: A full work year with no state furlough days for full-time faculty and non-represented employees; no reductions in the college’s contribution to PERS; no program elimination; and no position reductions of represented employees solely for budget reasons.

The total deficit-reduction target for this and next school year is about $8.8 million. Hay said that current-year changes eliminate $4.2 million of the shortfall through increased tuition and fees, and administrative and faculty reductions.

Hay would address the remaining $4.6 million shortfall through the following: reducing projected employee costs by $2.3 million through the current labor negotiations; anticipating new state revenue of $1.7 million; anticipating a 2-percent increase in student enrollment over the current year (adding $200,000 in revenue); and achieving additional efficiencies for a net savings of $400,000.

Hay’s proposal acknowledges some risks: The improving economy may neutralize efforts to expand enrollment by targeting job seekers; an increased workload on staff may need re-evaluation; labor negotiations may not succeed; and the state may not be able to follow through on its revenue commitments.

Hay noted that this is “a year of transition at MHCC.”

There will be a new college president, who will take the reins July 1. Hay said this budget will leave his named successor, Debra Derr, with “a solid foundation to continue the quest for competitive fee and tuition structures, comprehensive course offerings, improved labor/management positions and a financially stable model.”

In his opening statement on the budget proposal, Hay said, “This is a challenging period in MHCC’s 46-year history. As with other community colleges in Oregon, we struggle with the fiscal realities of our economic times.

“We are challenged to operate with fewer state dollars, which have dramatically diminished over the years,” he said.

The next budget committee meeting will be a public hearing at 5:30 p.m. on May 1, in AC1710.