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Oregon Bulletin

June 1, 2011

 

Department of Community Colleges and Workforce Development
Chapter 589

Rule Caption: Distribution of Community College Support Fund.

Adm. Order No.: DCCWD 1-2011

Filed with Sec. of State: 4-20-2011

Certified to be Effective: 4-20-11

Notice Publication Date: 3-1-2011

Rules Amended: 589-002-0100

Subject: This rule amendment adds a Biennial Growth Management Component to the Community College State Fund (CCSF) distribution formula. The calculation ties the growth of the actual number of Full Time Equivalent students (FTE) allowed to be used in the formula, to the CCSF’s Current Service level budget and to projected Total Public Resources.

      Beginning wit the 2011–13 biennium, a Biennial Growth Management Component which is applied annually, will be added to the calculation of the three-year Total Weighted Reimbursable Full-Time-Equivalent students (FTE). The purpose of the Biennial Growth Management Component is to manage the level of Total Public resource available per FTE within the Total Public Resources available. The Biennial Growth Management Component is comprised of two sub-component, the Base Growth Management Component and the State Board of Education Quality Growth Factor which are described below:

      (1) The Base Biennial Growth Management Component is the percentage change of actual FTE enrollments that would maintain Total Public Resources per FTE to the same level as the previous biennium plus inflation allowed in the CCSF Current Service Level budget.

      (2) The State Board of Education (SBE) has the authority to, on a biennial basis, set the “Quality growth factor” that may increase or decrease the number of FTE that will be counted for funding purposes above or below the Base Biennial Growth Management Component.

      The net of the two numbers above determines the Biennial Growth Management Component. This component is applied annually; therefore it is divided in half and then applied to each individual college’s actual annual FTE. The result determines the funded FTE that will be used to calculate the three-year Total Weighted Reimbursable FTE. If a community college’s enrollment declines in any given year, the Annual Growth Management Component may be applied to the previous years FTE if it is higher.

      To begin the calculations, Total Public Resources per FTE is based on Fiscal Year 2009–10. The start-up Funded Annual Base FTE used for weighting is based  on Fiscal Year 2010–2011 FTE to which a start-up growth management component has been applied. The State Board of Education will decide what the Quality Growth Factor will be for calculating Fiscal Year 2010–11 start-up growth management component as well as a Quality Growth Factor for the 2011–13 biennium.

Rules Coordinator: Linda Hutchins—(503) 947-2456

589-002-0100

Distribution of Community College Support Fund

(1) Purpose Statement:

(a) It is in the state’s interest to support a strong local community college system that meets local, regional and state economic and workforce development needs. Short- and long-term interests include the consideration of such things as comparable District funding capability, maintaining small districts as a means of educational access and stable, predictable funding. Oregon’s Community College distribution formula is designed to provide a financial foundation to support undergraduate and lower-division education, professional technical education, remedial education, local response to workforce training and other educational services necessary at the local and state level.

(b) The State Board through the authority vested in it by ORS 341.626, uses this rule to state clearly and concisely what the statewide interests are for Oregon community colleges and students through the adoption of a policy-driven distribution formula. The overarching policy levers, chosen by the State Board, have been structured to support access and quality and to do so with equity for Oregon students.

(c) The State Board, the Department, and the seventeen Oregon Community Colleges plan to pursue equalization of resources regardless of funding levels. This goal is reflected in the following principles:

(A) An expectation that equalization will be achieved in six years.

(B) Significant additional funds in a biennium compared to the previous biennium will benefit every college. The State Board will determine what level is significant on a biennial basis.

(C) Historic share of total public resources will be based on the immediate previous year for every year, with the exception of 2005-06. For 2005-06, historic share of public resources will be based on the average of 2003-04 and 2004-05.

(D) Buffered FTE will be used in the formula. The buffering is accomplished by using a three-year weighted average as defined in section (8)(b)(A).

(E) If significant additional resources are available compared to the previous biennium, equalization can go faster. The State Board will determine what level is significant on a biennial basis.

(F) The resource level available compared to the previous biennium may impact the pace of progress toward equalization.

(2) For purposes of this rule, the following definitions apply:

(a) “Total Public Resources.” The Community College Support Fund formula considers 100% of the next year’s imposed property tax revenue and the General Fund appropriation from the legislature.

(b) “Property tax revenues” is defined as the amount determined by the Department of Revenue to be imposed on local property following the application of limits imposed by sections 11(b)(1) through 11(b)(3), Article XI, of the Oregon Constitution, and those limits imposed by legislation implementing Ballot Measure 50. This amount becomes the basis for operation of the funding formula without regard to uncollectible taxes, or taxes collected from previous years. Taxes levied or imposed by a community college district to provide a public library system established prior to January 1, 1995 shall be excluded from the definition of property taxes in this rule. Property tax revenues raised through voter approval of any local option or capital construction levy are not to be included as a resource to be distributed through the funding formula.

(c) “Community College Support Fund” is defined as those funds received through the State’s General Fund appropriation and distributed to the community colleges for the purpose of funding educational programs.

(d) “Full-Time Equivalent (FTE) Enrollment” is defined as 510 clock hours for all coursework and for all terms including a fall 12-week term. For an 11 week fall term, the following calculation will be used; 11/12 of 510 hours or 467.5 hours.

(e) “Total Weighted Reimbursable FTE” is defined as the sum of 40% of first year prior to current FTE, 30% of second year prior to current FTE, and 30% of third year prior to current FTE.

(f) “Historic Share of Public Resources” is defined as the percent of statewide non-base total public resources allocated to each Oregon community college in the prior period. With the exception of 2005-06, historic share of public resources is calculated by dividing each college’s total public resources from the prior year, exclusive of the base, by Total Weighted Reimbursable FTE from the prior year. For 2005-06, historic share of public resources is calculated by dividing each college’s average total public resources from the 2003-04 and 2004-05 fiscal years, exclusive of the base, by the amount of frozen reimbursable FTE used in both the 2003-04 and 2004-05 fiscal years.

(g) “Equalization” is defined as equal public resource support per Weighted Reimbursable FTE, regardless of institution, and exclusive of the base. Equalization is measured by dividing Total Public Resources, exclusive of the base, by Weighted Reimbursable FTE.

(3) The Community College Support Fund shall be distributed in equal payments as follows:

(a) For the first year of the biennium, August 15, October 15, January 15, and April 15;

(b) For the second year of the biennium, August 15, October 15, and January 15;

(c) The final payment of each biennium is deferred until July 15 of the following biennium as directed by Senate Bill 1022 of the Third Special Session of the 71st Oregon Legislative Assembly.

(d) Should any of the dates set forth above occur on a weekend, payment shall be made on the next business day.

(e) All payments made before actual property taxes imposed by each district are certified by the Oregon Department of Revenue shall be based on the Department’s best estimate of quarterly entitlement using property tax revenue projections. Payments shall be recalculated each year as actual property tax revenues become available from the Oregon Department of Revenue and any adjustments will be made in the final payment(s) of the fiscal year.

(4)(a) Districts shall be required to submit enrollment reports in the format specified by the Commissioner, including numbers of clock hours realized for all coursework, in a term-end enrollment report by the Friday of the sixth week following the close of each term. If reports are outstanding at the time of the quarterly payments, payment to the district(s) not reporting may be delayed at the discretion of the Commissioner.

(b) All payments made before actual Full-Time Equivalent enrollment data are available shall be based on the Department’s best estimate of quarterly entitlement using enrollment data from previous years. Payments shall be recalculated each year as actual Full-Time Equivalent enrollment data become available and any adjustments will be made in the fiscal year.

(5) Reimbursement from the Community College Support Fund shall be made for professional technical, lower division collegiate, developmental education and other courses approved by the State Board in accordance with OAR 589-006-0100 through 589-006-0400. State reimbursement is not available for hobby and recreation courses as defined in 589-006-0400.

(6) Residents of the state of Oregon and the states of Idaho, Washington, Nevada, and California shall be counted as part of each Community College’s Total Reimbursable FTE base but only for those students who take part in coursework offered within Oregon’s boundaries.

(7) State funding for community college district operations is appropriated by the legislature on a biennial basis to the Community College Support Fund. For each biennium the amount of state funds available for distribution through the funding formula shall be calculated based on the following:

(a) Funds to support corrections programs shall be subtracted from the amount allocated to the Community College Support Fund before the formula is calculated. The amount available for corrections shall be equal to the funding amount in the preceding biennium, except as adjusted to reflect the same percentage increase or decrease realized in the overall Community College Support Fund appropriation. Funding for individual corrections programs will be determined in consultation with the Department of Corrections.

(b) Funds to support contracted out-of-district (COD) programs shall be subtracted from the amount allocated to the Community College Support Fund before the formula is calculated. The amount available for COD’s shall be equal to the number of reimbursable COD FTE from the prior year multiplied by the statewide average amount of Non-Base Community College Support Funds per weighted FTE for the prior year. Community colleges providing contracted out-of-district services will receive an allocation equal to the college’s number of reimbursable COD FTE from the prior year multiplied by the statewide average amount of Non-Base Community College Support Funds per weighted FTE for the prior year.

(c) The State Board may establish a Strategic Fund.

(A) There are two basic categories for these funds. Incentivized statewide initiatives and activities and requests from individual Districts for assistance in meeting new requirements and expectations stemming from legislative change.

(B) The Commissioner will use a committee of stakeholders and Department staff to determine overall priorities for funding that consider the State Board work plan and initiatives.

(C) Strategic Funds provided to incentivize statewide activities or assist Community Colleges in meeting legislative expectations are provided only for the biennium in which funding is approved. Strategic Funds allocated for either purpose will not be considered in the distribution of funds through the formula described in Section 8 for the current biennium or future biennia.

(D) Any unused monies remaining in the current biennium’s Strategic Fund will be allocated through the formula described in Section 8 at the end of the biennium.

(E) The Commissioner will review, rank, and approve proposals to incentivize statewide activities. After each proposal is approved, the Commissioner will provide the State Board with a report detailing the purpose of the activity, the amount of Strategic Fund monies approved, and the proposal’s merit as assessed under the following parameters:

(i) Purpose of the proposal.

(ii) How does the activity support the initiatives and work plans of the Department and the State Board.

(iii) Does the activity relate to the Department’s Key Performance Measures or other program-specific measures?

(iv) Is the funding one time (for this biennium) or will additional funding be needed in the future?

(v) If future funding is needed, how will those resources be obtained? Is the activity sustainable?

(vi) What is the activity’s impact on the State three years from now? Five years from now?

(vii) What change is anticipated?

(viii) How will progress be measured?

(F) The Department will bring all requests for assistance in meeting new requirements or expectations stemming from legislative change to the State Board for discussion and consideration.

(G) The Department will assess the requests for assistance n meeting new requirements or expectations of the Legislature based on the following parameters:

(i) Purpose of the proposal.

(ii) How will the funds be used? To sustain or increase enrollment (not supplanting existing funds)?

(iii) Is the funding one time (for this biennium) or will additional funding be needed in the future?

(iv) If future funding is needed, how will those resources be obtained? Is the activity sustainable?

(v) What is the proposal’s impact on the Community College three years from now? Five years from now?

(vi) How will progress be measured?

(H) The Department will provide a recommendation and reasoning to the State Board on whether the request merits funding.

(d) Funds to support targeted investments such as distributed learning shall be subtracted from the amount allocated to the Community College Support Fund before the formula is calculated. The amount available for these investments shall be equal to the funding amount in the preceding biennium, except as adjusted to reflect the same percentage increase or decrease realized in the overall Community College Support Fund appropriation.

(e) Funds remaining in the Community College Support Fund shall be divided equally between the two years of the biennium, and will be distributed in equal payments as described in Section 3 and through a distribution formula as described in Section 8.

(8) Distribution of funds to Community College Districts from the Community College Support Fund shall be accomplished through a formula, based on the following factors:

(a) Base Payment. Each community college district shall receive a base payment of $720 for each Weighted Reimbursable FTE up to 1,100 and $360 per FTE for unrealized enrollments between actual Weighted Reimbursable FTE and 1,100 FTE. The base payment may be adjusted by the State Board each biennium. The base payment for each District will be adjusted according to the size of the District. District size for purposes of this adjustment will be determined each year by the FTE set forth in section (8)(b) of this rule. The base payment adjustments shall be:

(A) 0 — 750 FTE 1.3513;

(B) 751 — 1,250 FTE 1.2784;

(C) 1,251 — 1,750 FTE 1.2062;

(D) 1,751 — 2,250 FTE 1.1347;

(E) 2,251 — 2,750 FTE 1.0641;

(F) 2,751 — 3,250 FTE 1.0108;

(G) 3,251 — 3,750 FTE 1.0081;

(H) 3,751 — 4,250 FTE 1.0054;

(I) 4,251 — 4,999 FTE 1.0027;

(J) 5,000 or more FTE 1.000.

(b) Student-Centered Funding: The formula is designed to progress toward a distribution of funds based on Weighted Reimbursable FTE students. The equalized amount per Weighted Reimbursable FTE is determined by dividing total public resources — excluding base payments, contracted out-of-district payments, and any other payments directed by the State Board or the Legislature – by Total Weighted Reimbursable FTE. The Department shall make the calculation based on submission of FTE reports by the districts and in accordance with established FTE principles.

(A) A three-year weighted average of Total Reported Reimbursable FTE by the Community Colleges will be used with the first year prior to current actual enrollment weighted at 40%, second year prior to current actual enrollment weighted at 30% and third year prior to current actual enrollment weighted at 30%. The actual enrollment for any year may be adjusted by the Biennial Growth Management Component.

(c) Beginning with the 2011-13 biennium, a Biennial Growth Management Component, which is applied annually, will be added to the calculation of the three-year Total Weighted Reimbursable FTE. The purpose of the Growth Management Component is to manage the level of Total Public Resource available per FTE within the Total Public Resources available. The Biennial Growth Management Component is comprised of two subcomponents, the Base Biennial Growth Management Component and the State Board of Education Biennial Quality Growth Factor.

(A) To establish the initial Annual Base Total Public Resources per FTE, the Funded Annual Base FTE used for weighting and the Annual Base TPR Per Funded FTE to be used for calculating the 2011-13 biennium Biennial Growth Management Components, the following calculations will be used:

(i) The initial Annual Base Total Public Resources per FTE is based on Fiscal Year 2009-10. The Total Public Resources for Fiscal Year 2009-10 is divided by the Fiscal Year 2009-10 actual FTE to arrive at the starting Annual Base Total Public Resources per FTE.

(ii) The Fiscal Year 2010-11 Funded Annual Base FTE used for weighting and to be used in the 2011-13 biennium is calculated using the following steps: First, divide the Annual Total Public Resources for Fiscal Year 2010-11 by the Fiscal Year 2009-10 Annual Base Total Public Resources per FTE. This provides the number of FTE that could be funded and still maintain the Fiscal Year 2009-10 Annual Base Total Public Resources per FTE. Second, the Fiscal Year 2010-11 Start-up Growth Management Component is then calculated. The Fiscal Year 2010-11 Base Growth Management Component is equal to the percent difference between Fiscal Year 2009-10 actual FTE and the number of FTE that would maintain Fiscal Year 2009-10 Annual Base Total Public Resources per FTE. The State Board of Education will adopt a Fiscal Year 2010-11 Quality Growth Factor as defined in 8(c)(C). The Fiscal Year 2010-11 Base Growth Management Component and Quality Growth Factor added together equals the Fiscal Year 2010-11 Start-up Growth Management Component. Third, the Funded Annual Base FTE in Base Year 2010-11 used for weighting is calculated by multiplying the 2009-10 actual FTE and the 2010-11 start-up growth management component. This provides the number that is the Funded Annual Base FTE used for weighting to be used in the 2011-13 Biennial Growth Management Calculation.

(iii) The initial Annual Base Total Public Resources to be used in the 2011-13 biennium is calculated by adding the 2010-11 CCSF Resources distributed by formula to the community colleges 100% imposed property taxes for 2010-11.

(B) The Base Biennial Growth Management Component is the percent change of actual FTE enrollments, as described in (8)(b)(A) that would be included based on changes in inflation and total public resources. The Base Biennial Growth Management Component is calculated as follows in subsection (A)(i) through (A)(viii). [Table not included. See ED. NOTE.]

(i) The Annual Base Total Public Resources is defined as the prior biennium’s Community College Support Fund available for distribution through the funding formula plus each Community College’s imposed property tax annualized. The most recent Community College Support Fund Formula Distribution Model provides these numbers.

(ii) For purposes of this rule, Funded FTE is defined as the actual FTE enrollments that are to be included in the three-year weighted calculation after the Growth Management Component is applied.

(iii) The Funded Annual Base FTE is the prior biennium’s Funded FTE enrollments annualized.

(iv) The Annual Base Total Public Resources per funded FTE is the Annual Base Total Public Resources divided by the Funded Annual Base FTE.

(v) The Annual Base Total Public Resources per FTE is increased based on the Current Service Level inflation for the Community College Support Fund calculated during the State’s budget preparation process. This is the calculation for the new biennium’s preliminary Cost Adjusted Total Public Resources per funded FTE.

(vi) The Annual Total Public Resources is defined as the annualized amount of the current biennium’s Community College Support Fund available to distribute through the funding formula as of the first quarter of the biennium plus the Legislative Revenue Office’s biennial projection of community college’s property tax revenue.

(vii) The Funded FTE that will be used in weighting is calculated by dividing the Annual Total Public Resources by the Cost Adjusted Total Public Resources per funded FTE.

(viii) The Biennial Base Growth Management Component is the percentage change from the Funded Base FTE Enrollments to the Funded FTE to be used in the funding formula. The annual change is limited to half of the biennial percent change.

(C) The State Board of Education (SBE) has the authority to, on a biennial basis, set the “quality growth factor’ that may increase or decrease the number of FTE that will be counted for funding purposes above or below the Base Growth Management Component. The SBE will consider the following principles as guidelines for setting the ‘quality growth factor’:

(i) Balance the desire to support growth beyond that which is funded through the funding formula distribution model with the desire to enhance quality by increasing the level of funding provided on a per-student FTE basis.

(ii) The Total Public Resources per FTE should not erode by more than 5% on an annual basis.

(iii) Where current Total Public Resources per FTE is determined to be insufficient to support the “quality of education” desired, a growth factor could be established that would increase the Total Public Resources per FTE.

(iv) If revenue is significantly reduced during a biennium, the Board may reduce the “quality growth factor.”

(D) The Growth Management Component is applied to an individual college’s Actual FTE to determine the Funded FTE used in the three-year Total Weighted Reimbursable FTE. The lower of the actual FTE or the FTE allowed under the annual Growth Management component is used in the Weighted Reimbursable FTE for each college.

(a) For any given year for any individual institution, the maximum funded FTE is calculated by applying the Annual Growth Management Component to the greater of the two prior years’ reimbursable FTE (RFTE) for that institution.”

(d) Equalization. The State Board of Education expects to achieve Equalization in funding for all community college students in six years.

(A) Progress to Equalization is defined as: On an individual Community College level, progress toward Equalization will close the gap between non-base total public resource support per Weighted Reimbursable FTE and fully equalized non-base total public resource support per Weighted Reimbursable FTE by some fraction per year.

(B) The proposed model calculates how far each Community College’s non-base allocation is from full equity every year, then moves incrementally toward Equalization each year. Each Community College makes the same percentage movement to Equalization each year unless the harm limit (described in section (8)(d)) is invoked. Community Colleges at or near equity do not move much in real dollars under the equity adjustment. Community Colleges further from equity move more in real dollars under the equity adjustment.

(C) In early years, the focus is on stability as Community Colleges adjust to Equalization. A smaller proportion of funds is distributed through Equalization and a larger proportion is distributed based on historic share of public resources. As the timeframe progresses, this proportion reverses, and in later years more funds are distributed through equalization.

(e) Harm Limit. The harm limit is designed to prevent individual Community Colleges from losing more than a certain percent of non-base total public resources from one year to the next due to Equalization. The harm limit does not limit losses in total public resources due to changes in FTE enrollment, changes in the General Fund appropriation, or changes in public resources. The harm limit is determined by combining the percent change in state appropriation funds from one year to the next with an adjustment percent determined by the State Board each year. In determining the adjustment, and therefore the total harm limit that results from combining the adjustment with the percent change in resources, the Board should consider the following issues:

(A) The total harm limit must not unnecessarily impede progress toward Equalization in the expected six-year period.

(B) The total harm limit should be adequate to ameliorate unreasonable negative effects of Equalization.

(f) Distribution of Significant Additional State Resources. In a biennium when significant additional state resources are available compared to the state appropriation in the previous biennium, in each year of the biennium:

(A) Fifty percent of additional state resources will be allocated through the Equalization methodology.

(B) The remaining fifty percent of additional state resources will be allocated based on the Community College’s historic share of public resources.

(C) The State Board will determine on a biennial basis what level of additional resources is considered significant.

(D) The State Board retains the authority to alter the percent of significant additional state resources allocated according to equity and historic share of public resources for each biennium, beginning in 2007–09.

(9) State general fund and local property taxes for territories annexed or formed effective June 1, 1996, or later shall not be included in the funding formula for the first three years of service. Additionally, the FTE generated in newly annexed territories shall not impact the funding formula during the first three years of service. Beginning in the fourth year, funding will be distributed through the formula as outlined in this rule.

[ED. NOTE: Tables referenced are available from the agency.]

Stat. Auth.: ORS 326.051, 341.015, 341.022, 341.317, 341.440, 341.525, 341.528, 341.626 & 341.665

Stats. Implemented: ORS 341.015, 341.022, 341.317, 341.440, 341.525, 341.528, 341.626 & 341.665

Hist.: 1EB 9-1979, f. & ef. 6-11-79; EB 12-1991, f. & cert. ef. 7-19-91; Renumbered from 581-043-0260; ODE 27-2000, f. & cert. ef. 10-30-00; DCCWD 1-2001, f. & cert. ef. 3-21-01, Renumbered from 581-041-0200; DCCWD 2-2001, f. & cert. ef. 5-7-01; DCCWD 3-2002, f. & cert. ef. 6-5-02; DCCWD 7-2002(Temp), f. & cert. ef. 12-16-02 thru 6-5-03; DCCWD 3-2003, f. & cert. ef. 5-14-03; DCCWD 1-2004, f. & cert. ef. 7-1-04; DCCWD 1-2005, f. & cert. ef. 7-13-05; DCCWD 2-2006(Temp), f. & cert. ef. 6-15-06 thru 11-30-06; DCCWD 6-2006, f. 10-3-06, cert. ef. 10-4-06; DCCWD 8-2006, f. 12-13-06, cert. ef. 12-15-06; DCCWD 2-2007, f. & cert. ef. 7-6-07; DCCWD 4-2007, f. & cert. ef. 10-1-07; DCCWD 3-2009(Temp), f. & cert. ef. 8-5-09 thru 1-31-10; DCCWD 5-2009, f. & cert. ef. 10-28-09; DCCWD 1-2011, f. & cert. ef. 4-20-11

Notes
1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2010.

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