LCC president’s goal to reduce structural deficit encounters pushback

A goal to decrease the Lane Community College’s structural deficit by $3 million a year was the subject of more than an hour of board discussion and public comment at the LCC Board of Education meeting Sept. 30 — and ended in a decision to table the goal until a later meeting.

The dueling priorities: the public’s desire for budget transparency amid financial difficulties for the college and the college’s need to restore its reserves in three years.

While Stephanie Bulger, LCC’s president, pushed the board to approve her goals in order to start the 2026-27 budget planning process, others focused on whether approving a goal for the budget before the process begins is legal. Board members also wanted an explanation on the college’s projected personnel costs.

Ultimately board members voted 4-3 to amend the president’s goals and not include the plan to incrementally reduce the deficit, wanting more information before voting on the matter. 

Board Chair Austin Fölnagy, Vice Chair Jerry Rust, and members Zachary Mulholland and Jesse Maldonado voted for the amendment. Julie Weismann, Steve Mital and Kevin Alltucker voted against. A number of the board’s votes fall along those lines, with the same four members on one side of issues, and the other three opposed.

Bulger repeatedly said to board members that in order to restore the college’s reserves to 10% of the budget in three years (a responsibility of the board), they must support her plan. Postponing the approval of the $3 million a year deficit reductions, she warned, will only require deeper cuts later.

“If you don’t support me, it’s going to take longer, it’s going to be more expensive, more costly to the college,” Bulger said. “It’s something that I don’t want to have to lead the college through, but I will certainly do that. It will be painful — painful for the college, and painful for the board.”

The legality of the plan

The LCC president presents goals to the board every year for approval. They aim to align the institution’s future endeavors and the board’s values. They also act as a framework for the board’s presidential evaluation at the end of the year. Bulger had three goals for the 2025-26 school year with 16 bullet-pointed subgoals.

The main point of uncertainty in the Sept. 30 meeting was whether approving Bulger’s subgoal to reduce the deficit by $3 million a year was within budget law. Passing a public institution’s budget requires an extensive planning process.

The president argued that the board had already seen and approved the plan to make the reductions in the May 7 meeting, a meeting that was dominated by board drama about complaints against Mulholland, a former chair of the board.

In the May 7 meeting, Kara Flath, vice president of finance and operations, presented the third-quarter fiscal year 2025 financial report. This included the three-year plan to restore the ending fund balance to the 10% mark by FY 2029, projecting it will reach $12.9 million after annual reductions of “ongoing expenditures” by $3.2 million for three consecutive years.

Flath also laid out the college’s current structural deficit, which means the college is spending more than it is taking in. She said the college is spending about 2% more than its revenue each year. These excess costs are chipping away at the college’s ending fund balance at an accelerating rate. If the board takes no action to reduce deficit spending, the ending fund balance would fall below zero in FY 2028.

The quarterly report was not an action item that the board voted on, but Bulger said because the board did not object to the plan, members “basically accepted the plan.”

While it’s not against Oregon law to let the ending fund balance fall below 10% of the operating budget, maintaining adequate funds is part of the board’s fiscal responsibilities. LCC Board Policy 6230 states:

“Lane Community College shall maintain an unrestricted General Fund Ending Fund Balance equal to or greater than 10% of total expenditures and transfers. … When the Ending Fund Balance falls to 9% or less, the college shall adopt a plan to replenish the Ending Fund Balance to 10% within three years.”

LCC faculty union president Adrienne Mitchell argued in a letter read aloud that the board had “no legal authority” to approve Bulger’s plan to reduce the deficit because it would go against budget laws for public institutions that require extensive public involvement and planning.

Board member Weismann argued later that the plan set forth by the president was just that: a plan, not a budget. Therefore, it does not require the processes of approving a budget.

“It’s a plan that we are going to get there to reduce structural deficits,” Weismann said. “Reduction does not mean cuts. Reductions means we’re going to do everything we can to get this deficit down. Now, that could be also working with the community to build, bring in new revenue sources, working to build enrollment so we get additional tuition fees rather than rates going up.”

Fölnagy said he was concerned that approving the president’s goal to reduce the deficit by $3 million a year may go against budget laws and auditing processes and said he wants an independent legal review.

“This is not because I don’t trust our staff and your administration,” Fölnagy said. “This is just our due diligence to verify that we’re following all the proper processes.”

Budget transparency

Board members Mulholland and Rust were skeptical of the college’s projected annual 8% increase in personnel costs. Flath said based on the bargaining agreements with employee groups and the current employees on the college’s roster, her team has calculated a 7% to 8% annual increase in wage costs.

Bulger said her team plans to do an in-depth presentation about employee costs to the board at the Nov. 5 meeting, but she expressed frustration that board members were questioning her finance team.

“I need your support, because the numbers are right,” Bulger said. “You’ve got to trust us. If you see that there’s a reason not to trust us, let’s have a conversation. But give me the trust first.”

The board members who voted to table the $3 million annual reduction of deficit plan expressed support for restoring the ending fund balance, and focused their reasoning for their vote on budget transparency and following budget law.

“I would like to get the full knockdown, drag-out plan that happened in May again,” said Maldonado, who was not on the board in May.
”Because to me, a bullet point is not the plan. I would like to see the full plan, and I would like to get it in the minutes that we actually have a vote.”

While Flath hasn’t finalized the ending fund balance for FY 2025, the college’s projected ending fund balance for the fiscal year was $7.5 million. One month of payroll costs for the college is $8 million, putting the college at risk if unanticipated emergencies arise, Bulger and Flath warned.

“It will not go very far,” Bulger said. “This is one of the things that keeps me up at night.”