Hello Colleagues,
It's been a whirlwind academic year so far. I hope you are looking forward to a much-needed break before the Winter term. Today's Budget Message follows an important discussion at the December 3, 2025 Board of Education meeting regarding Lane’s 3-Year Mitigation Plan. This plan is to be given to the Board when expenditures fall below 10% in the ending fund balance within the General Fund.
While the Board received the College’s recommendation and engaged in a substantive discussion on the plan, Board action on the plan was delayed until January 7th. The Board will have an opportunity to continue the discussion at an upcoming Board Work Session on December 17th and potentially vote at the January 7, 2026 Board Meeting.
The budget planning process is underway for the FY27 budget. I want to express my deep gratitude for the thoughtful and candid input received from so many of you in Listening Sessions and the ThoughtExchange online tool. Your participation is essential to this process.
Facing long-term financial challenges requires courage. I have immense hope in our collective ability to rise to this challenge. As we plan and manage our budget during these challenging times, our resilience and commitment to our mission as a community of faculty, staff, and students are our greatest assets. By seeking your input, this process reflects collaboration in setting financial priorities, grappling with tradeoffs, and aligning resources with institutional goals and priorities. The collaborative process we're engaged in is fundamentally about building a sustainable and thriving future for LCC.
Why a Mitigation Plan is Necessary
The Board’s decision reflects the critical importance of the plan and its commitment to fully consider the fiscal roadmap needed to secure LCC’s long-term financial health. The need for this plan is driven by persistent structural deficits LCC has faced for over a decade. These deficits, which have been caused primarily by rising personnel and benefit costs, coupled with limited revenue growth, have steadily eroded our financial reserves. Without decisive intervention, the current financial forecast projects that the General Fund Ending Fund Balance (EFB) will decline to a level of 5.03% by Fiscal Year 2029 (FY29).
The Critical Goal: Reaching a 10% Reserve
The 10% EFB is not merely a preference; it is the minimum safe reserve level required by Board Policy 6230 and is a standard benchmark for public higher education. This reserve is vital for LCC's stability, and acts as a savings account. Here's more about why the reserve is important:
- Cash Flow Management: The reserve ensures LCC can cover salaries and operational expenses throughout the year, especially given the cyclical timing of property tax and state funding payments. A healthy EFB prevents the College from having to take a short-term loan in the event that a tax or state funding payment is received late. To put this in perspective, a 10% EFB is about one and a half month’s payroll.
- Institutional Security: It provides a necessary buffer against unexpected risks, such as state funding cuts, unforeseen enrollment dips, or sudden increases in operational costs.
- Fiscal Responsibility: Maintaining this reserve helps LCC protect its bond rating and avoids increased borrowing costs, demonstrating strong fiscal management to our taxpayers and community.
The Proposed 3-Year Mitigation Plan
The plan presented to the Board is a balanced proposal that pairs necessary corrections to increase budget savings, called structural mitigation, with investments in the mission of LCC while returning to fiscal health. The plan's goal is to achieve a 10.40% EFB by the end of FY29 through growing annual savings and using those savings to reinvest in LCC and restore the EFB.
Next Steps and How to Engage
There are several ways to engage. The next round of community input has opened. I encourage you to share your ideas on this question: What ideas or suggestions do you have to help LCC use its resources wisely and support long-term financial stability, while maintaining focus on our students and our mission? In addition:
- December 17, 2025: A Board Work Session will discuss the 3 Year Mitigation Plan.
- January 7, 2026: The Board will resume discussion and consider approval of the 3-Year Mitigation Plan and set the Budget Parameters for FY27.
- March 2026: Specific, detailed mitigation strategies to achieve the required savings targets will be brought to the Board for consideration.
This work is a collective effort. The budget calendar continues as planned, which includes working with the College Council, and its Budget Development Subcommittee, in alignment with its scheduled work plan. I remain confident that together, through careful planning and our shared commitment to LCC’s students, we will forge a sustainable and successful path forward.
I want you to feel and stay informed. If you have individual questions, please contact Kara Flath, Vice President of Finance & Operations at flathk@lanecc.edu.
Thank you for your dedication to our institution.
Stephanie