By Nick Worth
A preliminary budget analysis was the main topic of business for the Navajo County Community College District Governing Board at Tuesday’s meeting.
“We have finished about the first third of the budget analysis,” Northland Pioneer College (NPC) Vice President for Administrative Services Blaine Hatch told the board. Hatch went on to tell the board the budget process is on target.
According to a summary prepared by Hatch:
* General fund revenue estimates show that overall revenues are expected to increase by $393,618 compared to the current fiscal year.
* The primary property tax is assumed to be levied at the maximum rate, which is four percent higher than current year tax and will require a truth-in-taxation hearing. The current property tax rate is $1.5965 per $100 of assessed valuation, said Hatch. He said the maximum allowable increase would raise that rate to $1.6610, a 4.04 percent increase.
* A tuition increase of $2 per credit hour and a media fee increase of $5 per semester are proposed. Even with these changes, overall tuition and fee revenues are still expected to decline by five percent compared to the 2013-14 budget as a result of enrollment trends and the planned addition of reduced tuition for The Learning Center courses.
* State funding is expected to decrease by approximately $260,000 due to declines in both enrollment and the gap to the rural net assessed valuation average.
* A budgeted increase in investment earnings reflects improved market conditions and other miscellaneous revenues are budgeted to remain the same.
* General fund transfers to other funds remain the same as budgeted in the current year except for a reduction in the transfer to the auxiliary fund by $30,000. Available revenues for the general fund total $24,855,753, an increase of 1.7 percent.
* A recommended two percent increase in wages is included in the request summary. The additional expense is approximately $250,000.
* Benefit cost increases include an employee base health insurance increase of three percent totaling about $45,000 in additional cost.
* Arizona State Retirement System costs for the employer match increase from 11.54 percent to 11.6 percent, totaling approximately $5,000.
* Adjustments to adjunct, faculty overload, lab aid and temporary help expenditures total an additional $50,000.
* Budget managers have submitted a $52,222 (0.8 percent) reduction for non-employee costs, but the addition of potential scholarship programs related to tuition proposals before the board would bring operating expenditures to a net increase of $247,778.
Hatch told the board the proposed preliminary budget will be presented during the regular April board meeting.
Hatch also presented an update on NPC’s financial position to the board members, advising them that revenues are below $500,000 per month.
“Tuition and fees are at 67 percent of last year at this time,” said Hatch. He reported the general unrestricted fund has total year to date revenues of about $15.8 million and total expenditures of $11.2 million. Of that revenue, approximately $78,000 comes from an investment fund.
Board member Prescott Winslow asked about the college’s investment policy.
“We have a conservative investment policy,” Hatch said. “Currently we have about $19 million total in investments. In the last couple of years, earnings on investments have been in the low single digits.”
Hatch then told the board tuition revenues are budgeted at $4.5 million.
“We’re looking at about a five percent reduction,” he noted
Board member Frank Lucero asked how many years student numbers have been going down.
Vice President for Learning and Student Services Mark Vest replied that the decline has been going on for the last several years.
“How do we sell raising taxes for doing less?” Lucero asked. “If we had a fire sale, would that help enrollment?”
“You would probably hit a point of diminishing returns,” Vest said. He added that the school had dropped tuition fees by $2 per credit hour at one time, but it did not have a significant effect on enrollment.
“I mean dropping it down by a lot more, like $50,” Lucero said.
Hatch then told the board the tuition proposals in the upcoming budget “are quite aggressive.”
In going over the auxiliary fund, Hatch noted that bookstore revenues are declining.
“Our pricing is competitive,” he said. “I have not identified exactly why the revenues are going down.”
“This is a national trend,” said Vest. “The Internet has done the same thing to textbook sales it has to shopping malls. It has rendered them obsolete.”
In other action March 18, the board:
* Adopted the wage and salary schedule, which included a recommendation to adjust the faculty schedule from a three percent differential between steps to 1.5 percent.
* Adopted a previously presented 12 credits scholarship plan, which will give students free tuition on the last 12 credits they need to gain a degree.
* Adopted a seven credits scholarship program for high school students who can take seven credit hours of general education courses tuition free. The students would have to apply for the program.
Winslow noted that high school administrators he spoke with were enthusiastic about the program, but asked, “Will it be that popular with the students? Textbooks and computer texts are expensive, so it’s important that we offer what we can.”
Winslow then suggested a textbook scholarship.
Vest said students from dual enrollment show a slight uptick in regular enrollment.
“There is a greater uptick in those who participated in NAVIT (Northern Arizona Vocational Institute of Technology), because it takes place on our campuses,” Vest said. “This would, hopefully, provide an uptick because the students would be on our campuses and think of themselves as college students.”
Vest also noted that while the seven-credit program is focused on high school students, he hoped there would be a side benefit for adult students who may enroll in the same evening classes as the high school students.
* Approved a 50 percent tuition reduction for adult basic education courses.
Hatch noted he anticipates tuition revenues would decline by $15,000.
* Approved a 50 percent tuition reduction for all summer classes.
* Adopted the proposed tuition and fee schedules.
Hatch said 2014-15 revenues are expected to drop approximately $255,000, even with the proposed $2 per credit hour increase and a $5 increase in the media fee per semester.
Lucero moved to approve the increase for this year, but to leave future years as recommendations. Board member James Matteson also said he did not want to lock in future tuition fees.
Hatch noted that no sitting board can lock a future board into anything.
* Adopted a future capital reserve policy that will establish a fund for capital works, so that the college can do future building projects without having to take out a loan.
* Heard an update on the Higher Learning Commission financial ratios.
* Approved a faculty sabbatical for Dr. Mike Solomonson for the spring 2015 semester.
* Approved the purchase of 125 HP Desktop computers and monitors from World Wide Technology, Inc. for $105,325.00.
* Approved restoring credit to Business and Industry Training (BIT) courses.
Vest said the college had removed credit from “fun” courses in the Community Education and BIT courses.
“We want to restore credit to the BIT courses,” Vest said. He explained that courses that can be considered as working toward a degree would once again receive credits, while “fun” community education courses would not have credit restored.
Board chair Ginny Handorf asked about music groups, such as the White Mountain Symphony Orchestra and the barbershoppers.
Vest said the difference was between offering courses to the community and courses that worked toward a degree.
“I’m not sure supporting the arts can be called ‘fun’ courses,” said Handorf. She noted that when the music groups left the college, “I feel like we lost a lot.”
Vest and NPC President Dr. Jeanne Swarthout both agreed.
“We were not funding a lot of money in that direction,” Handorf said.
Vest replied that it was about $30,000.
* Approved the purchase of new carpet tiles for several centers for $238,825.
* Approved the purchase of 1,084 new chairs and 139 stools for $121,500.
* Approved the 2015-16 academic calendar.
Spring break was moved from the fourth to the third week in March to break the semester into two eight-week blocks. Vest said this would address an increased demand for eight-week courses. He also noted under the new calendar summer school would start on June 6.
* Heard an update on the Affordable Healthcare Act.
Winslow asked Hatch if NPC would curtail some employees hours in order to not give them insurance.
Hatch replied that it is illegal to do so, but that some temporary individuals would be restricted to one job at NPC. He said that currently some temporary workers are “cobbling together” two or more temporary positions.
“They would be affected,” said Hatch.
* Saw a presentation on NPC students involved with the All-Arizona Academic Team.
* Approved a new EDU certificate of proficiency in education professions.
* Deleted the photography technician program.
* Approved a change in the cosmetology program to alter the description of the nail technician certificate of proficiency.
* Approved an articulation agreement with Grand Canyon University to make it easier for NPC students to transfer credits.
“This facilitates transfers and adds to our prestige,” Handorf said.
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By Nick Worth