By Linda Kor
Northland Pioneer College administrators outlined the proposed budget plan for the coming fiscal year for members of the Navajo County Community College District Governing Board Tuesday, and discussed concerns regarding the unanticipated reduction in revenues due to closures at the Cholla Power Plant in Joseph City under the operation of Arizona Public Service Co.
APS officials recently announced that they would only be operating Units 1 and 3 at the plant during the summer months, which translates to a lower assessment of commercial value. The result is an unanticipated decrease of 17 to 18 percent in revenues from the utility for the college in the coming fiscal year.
Vice President of Administrative Services Maderia Ellison explained that if the primary property tax is assumed to be levied at the maximum rate, which is two percent higher than the current year tax levy, it would still produce a $150,000 decrease in revenues from last year. Without the levy, the loss would be approximately $400,000.
“This will take some work to explain, because it won’t be easily understood. We plan to provide information at the next meeting as to why we will be increasing the tax rate to raise less money than we did last year,” stated Ellison.
The maximum levy equals an increase in the current tax rate of $1.7423 per $100 net assessed residential valuation to a rate of $1.7884, but would result in decreased revenues of nearly $150,000.
Ellison explained that other revenues are expected to have an increase of nearly $267,000, with $24,000 of that related to enrollment cost increases and $243,000 related to an increase in state equalization aid. Equalization aid is provided to districts that have an insufficient property tax base compared to the minimum assessed value.
The enrollment figures include a proposed tuition increase of $2 per credit hour for a total revenue increase of $100,000. Also proposed are fee increases to cover consumable costs associated with certain programs such as Mechatronics and the nursing program. There are no proposed increases to the arts and sciences programs, and a reduction in costs associated with Career and Technical Education.
Ellison pointed out that even if the board should approve an increase in tuition and fees, with the rate increases proposed by other community colleges in the state, NPC would be the least expensive at $70 per credit hour.
She also explained that the state’s proposed executive and legislative budget would provide $353,700 in funding for STEM (Science, Technology, Engineering and Mathematics) related activities, an increase of $8,200 from the current year appropriation.
Revenues related to intergovernmental contracts with Apache County and the Northern Arizona Vocational Institute of Technology (NAVIT) will remain unchanged compared to the prior year.
It was noted that staff members recommended a salary and wage increase of two percent for all eligible employees in the coming fiscal year, but that was prior to being made aware of the reduction in revenues, which may have an impact on that recommendation.
If the salary and wage increase were to be approved, the total additional expenditure would come to approximately $250,000. Benefit cost increases include an anticipated increase on the employee base health insurance of 10 percent totaling about $150,000 in additional costs. The employer match for the Arizona State Retirement System increased from 11.47 percent to 11.48 percent for an expenditure impact of less than $2,000.
In reference to the loss of revenues, a trend that will likely continue, board member Prescott Winslow replied, “We need to draw the bigger picture for ourselves. With the closures of Catalyst Mill, Cholla, the reduction of central property taxes is all more pressure to look toward responding to the leaders in our county. We need to diversify our economy. How do we address those needs to provide jobs? Otherwise, we develop a ‘bunker mentality’ of doing less.”
Winslow added that the decrease in general state aid to community colleges is all just burden shifting.
Ellison clarified that the proposed budget considerations were just that, and a final decision is to be made at the March 15 meeting.
The board also heard the final report regarding the Equitable Access to Gainful Learning Experiences grant by Dr. PJ Way, director of Information Services.
The board held no discussion on an item posted regarding the Skills Center settlement.
In other business Feb. 16, the board:
* Approved a program deletion of the Business Associate of Applied Science, Certificate of Applied Science and Certificate of Proficiency in Retail Management.
* Approved the renewal of an intergovernmental agreement between the college district and Apache County.
* Authorized acceptance of the audited annual budgeted expenditure limit report.
* Approved an adjustment to the fiscal year 2014-15 adopted budget to reconcile the budgeted expenditures with the actual expenditures for the fiscal year.
* Approved an award of contract to Mechanical Products Southwest to purchase heating and cooling equipment for a total cost of $164,353.81 as the sole bidder.
The equipment will be placed on the roof at the Nizhoni Learning Center on the Painted Desert Campus in Holbrook.
By Linda Kor