Financial planning and budgeting are ongoing, realistic, and based upon the mission and goals of the institution.
7.A.1 Governing boards and, where applicable, state agencies have given the institution appropriate autonomy in financial planning and budgeting matters within overall mandates and priorities.
7.A.2 The institution demonstrates that financial planning for the future is a strategically guided process. This planning includes a minimum of a three-year projection of major categories of income, specific plans for major categories of expenditures, and plans for the management of capital revenue and expenditures. Short and long-range capital budgets reflect the institution’s goals and objectives and relate to the plans for physical facilities and acquisition of equipment.
7.A.3 The institution publishes an annual budget distributed to appropriate constituencies, and the policies, guidelines, and processes for developing the budget are clearly defined and followed. Budget revisions are made promptly, and, when necessary, a revised budget or schedule of budget changes is developed and distributed to appropriate constituencies.
7.A.4 Debt for capital outlay purposes is periodically reviewed, carefully controlled, and justified,so as not to create an unreasonable drain on resources available for educational purposes. The institution has a governing board policy guiding the use and limit of debt.
The college operates as part of a system of higher education institutions in the State of Washington coordinated by the Higher Education Coordinating Board. The governance of the college has been vested with the Board of Trustees as set forth in RCW 28B.40.120. Their general powers and duties include: full control of the college’s property; employment of the faculty and staff; and purchase of all goods and services necessary to conduct the business of the college except as otherwise provided by law.
The president and senior staff along with the Board of Trustees establish a legislative agenda and budget request which is then presented to the Office of Financial Management (the Governor’s budget agency) for review and clarification. This legislative agenda after consultation with the Office of Financial Management is submitted to the legislature as part of the Governor’s budget. The legislative agenda also includes capital funding and an enrollment plan with potential new enrollments for the College. The legislature establishes the college’s budgeted enrollment level and limits on tuition rates.
Financial planning for the college is directly tied to the college’s financial goals in the strategic plan. The “strategic directions” for the financial goals are: “diversify revenue streams” and “keep the growth of operating expenditures to sustainable levels”. All major budget decisions are reviewed to ensure they are in alignment with the strategic plan.
Although the legislature funds new enrollment levels, state appropriations, as a percent of operating revenue, have been declining for several years. This decline has been offset by tuition and fee increases. To help keep tuition rates affordable, fundraising is the focus to diversify revenue streams. Increased revenue from fundraising will be used to increase student scholarships and fund faculty development and scholarly work.
Goods and services expenditures are controlled by state and college policies that dictate procedures that result in getting quality products and services at the best possible price. One example of this is the recent state Smart Buy contract with a vendor for office supplies. Energy efficiency is addressed during new construction and other capital projects. Vacancies in existing staff positions and requests for new positions are evaluated before hiring is approved to achieve staff efficiencies.
The state has a two year budget cycle which the college begins a year in advance. During this process the college prepares budgets for major revenue and expense categories based on expected enrollment levels and other program needs, including a capital budget.
The college’s physical resources are specifically addressed in the strategic plan’s support goals. The college has a ten-year capital construction plan which is updated every two years. Funding for capital projects is from two main sources, the legislature and a portion of student fees. The college updated its campus master plan in 2007 based on the strategic plan and this will help guide future capital requests.
In the Spring of each odd-numbered year, while the state legislature is approaching their final budget policy framework, Evergreen’s internal allocation process begins.
The Office of Operational Planning and Budget anticipates changes to our base funding levels such as state budget reductions (or enhancements), enrollment growth funding, and tuition or fee increases to establish an overall revenue policy framework.
The President and Vice Presidents discuss the implications of the anticipated revenue policy framework with the deans and directors to determine the budget themes that need to be addressed in the College’s allocation process. Normally, priorities will be consistent with those themes included in the College’s biennial budget request and may also include other priorities that have emerged since the College’s budget request was developed. It is at this stage that President will decide if any college contingency strategies such as budget reductions or internal reallocation planning will be necessary.
The Vice Presidents are responsible for reviewing all budget decisions and modifications. The Divisional Budget Coordinators, Executive Director of Operational Planning and Budget, and the Business Manager will provide the necessary staff support for the Vice Presidents in this regard.
The Vice Presidents are responsible for 360 degree consultation while they are formulating an overall budget implementation strategy recommendation to the President. The Executive Director of Operational Planning and Budget will be responsible for core coordination activities and posting budget planning material on the College web site.
The Vice Presidents will conduct divisional and campus-wide budget hearings to provide information regarding the college’s most pressing needs and how those needs translate into budget priorities. Included in this discussion is the relationship of the proposed actions outlined in the College Long-range Plans for both the operating and capital budgets. If tuition or fee increases are considered by the Vice Presidents to be necessary, they will make special outreach efforts to consult students.
The President is responsible for finalizing a recommended budget to the Board of Trustees for their approval. The President’s proposal shall highlight any changes to the previously Board approved budget policy. The President will also identify modifications she/he made in the recommendations to the course of action recommended to her/him by the Vice Presidents.
The college publishes the president’s biennial operating and capital budget requests and it is available on the college’s website. Documents such as “Legislature 101: A guide to the Washington State Legislature” and “Budget 101: A Guide to Evergreen’s Budget” were developed to inform the campus community about the various budget processes.
Funding for most state system capital projects is from two main sources, the legislature and a portion of student fees, and therefore no college debt is incurred. However, capital funding for auxiliary services such as housing, food services, and the bookstore, is provided through revenue bonds or capital lease agreements with the Office of State Treasurer.
In 2006, the students voted to self- impose a fee to support a remodel of the College Activities building. The revenue from this fee will used to repay bonds issued to accomplish the remodel.
The college carefully reviews any requests for auxiliary capital funding to ensure that resources are sufficient for repayment. The Board of Trustee’s authorizes the borrowing of money and the issuance and sale of revenue bonds, and certain lease agreements. The college currently has outstanding Housing Revenue bonds in the amount of $7.5 million and capital lease agreements with State Treasurer’s Office in the amount of $1 million.