STATE BOARD OF EDUCATION – ADMINISTRATIVE RULE SUMMARY
Topic: Contracts Out-of-District OAR 589-002-0100 Date: April 20, 2007
Staff/Office: Cam-Preus Braly, Amanda Richards; CCWD
New Rule Amend Existing Rule Repeal Rule
Hearing Date: __March 26, 2007______Hearings Officer Report Attached
Action Requested:
First Reading/Second Reading Adoption Adoption/Consent Agenda
TITLE/OAR NUMBER: 589-002-0100: Community College Support Fund Distribution
BACKGROUND: Community colleges provide community college services to areas of Oregon that are not part of a community college district via “contracts out-of-district” (CODs). The Oregon Legislature and the State Board of Education have long held the value that access to community college services should be available to all Oregonians, regardless of whether a person lives in an area inside or outside a district boundary. The State Board allocates a small amount of funds for colleges to serve these nondistrict areas. Areas outside a community college district boundary do not pay property taxes for community college services.
The current Oregon Administrative Rule (OAR) provides for an equal increase (or decrease) for COD funding commensurate with the overall percentage increase or decrease in the Community College Support Fund (CCSF). The three colleges that currently provide COD services across the state have not seen any real increase in funding for their services over the last decade and find that the level of services they are able to provide to their communities is dwindling.
Board History: This issue was brought to the Board in December 2006 for discussion and February 2007 for a first reading. This April 2007 item is the second reading required in the OAR amendment process.
PROPOSED OAR AMENDMENT: Provide funding for reimbursable COD activities on the per Full Time Equivalent (FTE) enrollment basis. The amount available for COD’s shall be equal to the number of reimbursable COD FTE from the prior year, multiplied by the amount of Non-Base Community College Support Funds per weighted FTE for the prior year. Changes to the OAR are noted as strikethroughs for deleted text and bold/underline for new text.
RESPONSES TO BOARD QUESTIONS:
1) What is the square mileage and population of nondistrict areas?
County/area / Total Square Miles in County / 2005 PopulationColumbia (Clatskanie SD and Rainier SD) / 687 / 15,000
Gilliam / 1,223 / 1,890
Grant / 4,528 / 7,685
Harney / 10,228 / 7,660
Lake (except northern portion in COCC district ) / 8,359 / 7,505
Malheur (except northeastern section in TVCC district) / 9,926 / 31,800
Sherman / 831 / 1,880
Union / 2,038 / 24,950
Wallowa / 3,153 / 7,130
Wheeler / 1,713 / 1,550
Total Nondistrict (approximate) / 42,686 / 107,050
Total Oregon / 98,386 / 3,631,440
Source: Oregon Blue Book: 2005-06
CCWD staff will provide a map of in-district and nondistrict areas in hardcopy during the April meeting.
2) How many colleges provide contracted out-of-district services? How many nondistrict areas are receiving services?
Three colleges currently provide COD services. According to ORS 341.022, reimbursable COD FTE may not exceed 300 per year under an agreement with a nondistrict area.
Community College / Nondistrict area / 2005-06 COD FTE*Blue Mountain / Grant, Union and Wallowa counties / 46
Clatsop / Northern portion of Columbia county (Clatskanie) / 12
Treasure Valley / Lake county (Lakeview) and Harney county (Burns) / 35
Total / 93
* Treasure Valley COD FTE may be underreported, so an estimate of 35 COD FTE is included here.
341.022 Maximum reimbursable enrollments in nondistrict areas. Annual state reimbursable enrollments under an agreement with a nondistrict area shall not exceed 300 full-time equivalent students.
3) Does the Board have the authority to alter boundaries so nondistrict areas are part of a community college district?
Yes, according to Oregon Revised Statute (ORS) 341.565, the Board may make a motion to change the boundaries of a community college district. The attached document, labeled “Expansion of a Community College District”, outlines the process for changing community college district boundaries.
341.565 State board as boundary board; petition, hearings; legislative approval required; effective date of change; filing of change. (1) The State Board of Education shall constitute the boundary board for making any changes in the boundaries of community college districts. The state board on its own motion or on petition from a petitioning territory may propose changes in the boundaries of a community college district. The state board must find that the proposed change will have no substantially adverse effect upon the ability of the affected districts to provide and continue their programs and is not made solely for tax advantages to property owners in the district or area affected by the proposed change. The state board may submit the question of a boundary change to a vote of the electors of the territories affected by the boundary change. The election must be held on the same day in both of the affected territories.
4) Is there a requirement to offer contracted out-of-district services to nondistrict areas? Are community colleges obligated to provide services?
No. According to ORS 341.019, all areas within the state must be served by a community college district; either by the formation of a district or through contacts with an existing district. However, in order to obtain services, residents of a nondistrict area must indicate interest in receiving services. According to ORS 341.021, CCWD can then invite community college districts to apply to provide contracted services to the area. No college is obligated to apply or provide services.
341.019 All areas in state to be served by district; procedure; responsibility; rules; local advisory committees; duties. (1) All areas within this state shall be served by a community college district. Such services may be provided either:
(a) Directly by formation of a community college district; or
(b) Indirectly by contract with an existing community college district.
(2) The Department of Community Colleges and Workforce Development shall fix responsibility for serving each area that is not within a community college district. Where feasible, each area shall be a whole county or a group of counties or that part of a county not already in a community college district.
(3) In order to obtain the services described in subsection (1)(b) of this section, residents of a nondistrict area must indicate their interest in receiving services by requesting formation of a local advisory committee and seeking the advice and counsel of the Department of Community Colleges and Workforce Development.
341.021 Provision of service outside districts; proposals; costs. (1) The Department of Community Colleges and Workforce Development shall invite existing community college districts to submit proposals for the provision of service to an area that has officially indicated its interest in receiving service.
5) How are COD services funded? Do nondistrict areas contribute funds?
According to OAR 341.021, the budget for COD services may include only three funding sources: 1) CCSF reimbursement, 2) nondistrict student tuition and 3) nondistrict resources (gifts, contributions, or grants from individuals, groups, organizations, businesses or industries; may include financial support from school districts, education service districts, municipalities, counties or another public agency or private organization).
Yes, nondistrict areas must contribute funds. According to ORS 341.021, the nondistrict area will contribute a share of the budget, which the Board sets in Oregon Administrative Rule (OAR). In OAR 589-002-0600 Section 13:
· The Board requires a cash contribution from the nondistrict area, which must represent at least 10% of the budget in the initial contract year, 15% in the second year, and 20% for all subsequent years.
· The Board may grant a waiver of these requirements.
· Areas serving 12 or fewer FTE annually do not have to make a cash contribution in the first three years and the contribution in subsequent years is ten percent of budgeted expenditures.
341.021 Provision of service outside districts; proposals; costs.
(3) Agreements between the community college district and nondistrict entities as listed in ORS 341.315 shall include an annual budget setting forth both revenue and expenditures. The budget shall be based upon the following conditions:
(a) Subject to ORS 341.022, eligible full-time equivalent student enrollment produced under the agreement may be claimed for state reimbursement purposes by the community college district. Such reimbursement shall come from the Community College Support Fund established in ORS 341.620 and shall be distributed as directed in ORS 341.626 and the rules of the State Board of Education.
(b) A share of the budget shall be provided by those individuals or agencies receiving service under this agreement as specified by rule of the State Board of Education adopted under ORS 341.024 (3).
(4) Agreements developed under this section shall be wholly supported by Community College Support Fund reimbursement, nondistrict student tuition and nondistrict resources. [1987 c.191 §3; 1991 c.757 §4; 1995 c.67 §4]
OAR 589-002-0600: Access by Unserved Areas to Community College Services; and Procedures for Contracted Out-of-District Areas
(13) The local nondistrict financial effort shall be in cash:
(a) The contracting entities may exercise the option of increasing local effort in order to reduce tuition costs to students;
(b) The minimum cash contribution that will be required in the budget shall be determined in the following manner:
(A) For the initial contract year, not less than ten percent of the budgeted expenditures must be supported by a cash contribution;
(B) For the second contract year not less than 15 percent of the budgeted expenditures must be supported by a cash contribution;
(C) For the third contract year, and all subsequent years, not less than 20 percent of the budgeted expenditures must be supported by a cash contribution.
(c) Upon request from the college providing the contracted services, the Commissioner may recommend to the State Board a waiver or renegotiation of all or a portion of the matching requirement;
(d) A nondistrict area that contracts for not more than 12 FTE annually shall be subject to a separate cash contribution standard:
(A) Such areas may enter into contracts that provide for no cash contribution for the first three years of service;
(B) For the fourth, and all subsequent years, the cash contribution shall be ten percent of the budgeted expenditures.
6) Are all community college districts under tax compression?
Sixteen colleges are at compression.
*Note: includes operating levies only (no bond levies).
Source: Oregon Dept. of Revenue, Research Section, 3/29/2007
7) How much funding is currently directed to CODs?
2005-06:
Blue Mountain / $46,417Clatsop / $7,288
Treasure Valley / $35,284
Total / $88,989
8) What is the estimated impact on funding for 2007-09?
Estimated CCSF expenditures for 2007-09 will be $256,690 more than in 2005-07:
a. Estimated Non-Base CCSF per weighted FTE for 2006-07 = $2,231.93
b. Estimated COD FTE in 2006-07 = 95
c. For 2007-08, multiply: 95 FTE * $2,232 = $212,033.35
d. For 2008-09, increase by 5% = $222,635.02
e. Total 2007-09 estimated COD payments = $434,668.37
NEXT STEPS: The OAR was open for public comment through March 26, 2007. The Board will consider the amendment during a second reading on April 20, 2007. The Board will vote on the proposed amendment on May 18, 2007, and if approved, the proposed change would go into effect for the 2007-08 year.
Expansion of a Community College District
M E M O
DATE: March 26, 2007
TO: Department of Community Colleges and
Workforce Development
FROM: Linda Hutchins, Hearing Officer
RE: Presiding Officer’s Report to Agency on Rulemaking Hearing
Hearing Date: March 26, 2007
Hearing Location: Public Service Building, Room 251-A
Rule Title: 589-002-0100 – Distribution of Community College Support Fund
The rulemaking hearing on the proposed rule was convened at 9:00 a.m.
Before receiving comment, I briefly summarized the proposed rule amendment.
No one attended the hearing, which was adjourned at noon, March 26, 2007.
Transcription of this hearing is filed on the CCWD Shared drive/OARs/589-002-0100-Distribution of CC Support Fund/COD Disbursement.
C: Amanda Richards, Administrative Rule Lead
File
Summary of Public Comments
Proposed Changes to OAR 589-002-0100
Regarding Process for Distribution of Strategic Funds
March 26, 2007
In Support – Minor Changes Proposed
The Department of Community Colleges and Workforce Development (CCWD) received one public comment in support of adopting the proposed amendment to OAR 589-002-0100 from Portland Community College. PCC suggested minor changes to the proposed OAR:
1. Recommend the total amount of Base funding for community colleges statewide be removed from the calculation.
CCWD action: Excluding the Base funding from the calculation was the original intent of the proposed amendment, but the language was not sufficiently clear. This clarification has been made.
2. Alternate wording suggested: 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 statewide average Non-Base Total Public Resources per FTE for the prior year, multiplied by the ratio of CCSF funding to TPR funding, for the prior year, multiplied by the COD reimbursable FTE for the prior year.
CCWD action: No action taken. The proposal’s intent is to provide the same amount of Non-Base CCSF funds to COD FTE as are provided to FTE from in-district areas. The current language and calculation provides that funding. The alternate wording is a different way of calculating the amount available for CODs, and provides a slightly lower amount per reimbursable COD FTE than is available for in-district FTE.
Final Wording:
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.