1. Linn-Benton Community College September 7, 2010 Financial Overview

2. Questions? Ask any time Ask any time The information in this presentation is for your understanding, (I get most of it). The information in this presentation is for your understanding, (I get most of it). The following information is subject to change. The following information is subject to change.

3. Financial Challenge National and Oregon economies projected slow recovery = A new normal National and Oregon economies projected slow recovery = A new normal Hitting Home Hitting Home State Revenue Declines State Revenue Declines Across the Board Reduction Across the Board Reduction $577 million $577 million Additional $377 million Additional $377 million Waiting for the next shoe to drop Waiting for the next shoe to drop 2011-13 CCSF 2011-13 CCSF

4. Why the “New Normal” National unemployment National unemployment Reported 9.6% Reported 9.6% Estimated when adding discouraged 16% Estimated when adding discouraged 16% Labor Force Labor Force Grows 120,000 per month-demographics Grows 120,000 per month-demographics Private Sector adding 140,000 jobs a month Private Sector adding 140,000 jobs a month Gap between peak and today 11,000,000 Gap between peak and today 11,000,000 If 200,000 jobs added per month- 12 year recovery If 200,000 jobs added per month- 12 year recovery If jobs were added at pace of 1990’s- 4 years If jobs were added at pace of 1990’s- 4 years

5. Why the “New Normal” Labor Force Labor Force August numbers just out August numbers just out Private sector grows 67,000 for month Private sector grows 67,000 for month “Bright Spot” “Bright Spot” Unemployment up Unemployment up 9.5% to 9.6% 9.5% to 9.6% discouraged workers getting back into the job search. discouraged workers getting back into the job search.

6. This is not our first rodeo We have been here before We have been here before 2002-2003 reductions 2002-2003 reductions 2006 reductions 2006 reductions 2009 reductions 2009 reductions But this time is different But this time is different We expect much slower rebound We expect much slower rebound Restructure for “new normal” Restructure for “new normal” Design for the long term, rather than “holding our breath” Design for the long term, rather than “holding our breath”

7. State Expenses vs. Revenue Billions (before latest revenue forecast)

8. State Revenue Community College Support Fund

9. August 2008 Planning Before the effects of the big “R” Recession

10. January 2009 projection CCSF reduction M66 &67 pass

11. Subliminal Message Tums Tums

12. Hannah and Grandma

13. Not in Kansas anymore! Oh My!

14. August 2010 projection CCSF reduced from $450.5 to $430 million 2011-13 Biennium CCSF 405 million Account for delayed payment

15. September 2010 projection CCSF reduced from $450.5 to $416 million 2011-13 Biennium CCSF 387 million

16. Importance of Ending/Beginning Fund Balance Can be an indicator of resources available for operations Can be an indicator of resources available for operations FY2010 EFB $9.2 million. FY2010 EFB $9.2 million. FY09 EFB was $8.4 million, but 4 million IOU FY09 EFB was $8.4 million, but 4 million IOU Can be used for one-time expenses Can be used for one-time expenses Temporary cushion if actual revenue comes in less than projection. Temporary cushion if actual revenue comes in less than projection. Provides cash for grants & contracts prior to reimbursement Provides cash for grants & contracts prior to reimbursement

17. Importance of Ending/Beginning Fund Balance 3.5 million = 30 days FY11 expenses 3.5 million = 30 days FY11 expenses Reveals timeframe to balance revenues and expenditures Reveals timeframe to balance revenues and expenditures FY11 one-time change to revenue to eliminate accrual of deferred state payment. FY11 one-time change to revenue to eliminate accrual of deferred state payment. Current projection of EFB for FY11 is $2,367,950 or 20 days operating cash. Current projection of EFB for FY11 is $2,367,950 or 20 days operating cash.

18. Macro Finance-The Commons

19. Oregon Community Colleges TPR per FTE

20. TPR per FTE-Inflation adjusted

21. Distribution formula The CCSF “Commons”

22. Back to the Farm New assumptions-growth has over utilized the commons New assumptions-growth has over utilized the commons Not enough grass to feed everyone's herds Not enough grass to feed everyone's herds What was once thought to be a drought is now predicted to be “climate change” What was once thought to be a drought is now predicted to be “climate change” Response must change Response must change

23. Macro Finance

24. Two sides of the coin Public good – Private Good Public good – Private Good

25. Continuing Service Level 2009-11 General Fund appropriation $ 450,500,000 2009-11 Phase-ins, phase-outs, one-time expenditures - 2009-11 Timber tax estimate 25,308 2009-11 Property tax estimate 264,300,000 2009-11 General Operating Revenues $ 714,825,308 Percent of budgetGrowth PERS2.9%79.1% 16,448,355 Health insurance9.4%14.5% 9,728,585 Pension obligation bonds4.2%10.3% 3,099,697 Remainder Personal Services67.0%3.1% 14,835,842 Remainder Services and Supplies16.5%2.4% 2,834,139 Increase in General Operating Revenues6.6% $ 46,946,618 2011-13 General Operating Revenues 761,771,926 2011-13 Timber tax revenues (25,308) 2011-13 Property tax estimate (284,200,000) 2011-13 Current Service Level $ 477,546,618 Increase in General Fund from 2009-11 LAB6.0% Start here! End here.

26. What budget? Continuing Service Level Continuing Service Level $477 million as calculated to maintain. $477 million as calculated to maintain. Ignores growth in FTE Ignores growth in FTE Current Projection of Community College Support Fund Current Projection of Community College Support Fund $387 million $387 million 81% of CSL 81% of CSL More revenue forecasts to come…. More revenue forecasts to come….

27. LBCC Resources

28. ANSWERS? Questions?