October 7, 2008 Audit/Finance Committee Meeting

The Audit/Finance Committee of the Board of Trustees of Illinois Valley Community College District No. 513 met at 8 a.m. on Tuesday, October 7, 2008 in the Board Room (C307) at Illinois Valley Community College.

Committee Members

Thomas C. Setchell

Physically Present

Deborah L. Sweeden
Cassie Fuller

Committee Members Absent

Others Physically Present

David L. Wilcoxson, Board Chair
Jerry Corcoran, President
Cheryl Roelfsema, Interim Vice President for Business Services and Finance; Controller
Sue Isermann, Interim Vice President for Academic Affairs
Bob Marshall, Vice President for Student Services
David Spiller, Auditor
Stephen Carlson

The meeting was called to order at 8 a.m. by Mr. Setchell.

FY08 AUDIT

Mr. David Spiller, auditor, reported no weaknesses and no instances of noncompliance in the audit. The auditor’s opinion was unqualified. Mr. Spiller expressed his appreciation for all the help from the college staff. Mr. Wilcoxson noted the financial position of the College improved during the last year and also two years prior. Although the College’s tuition and fees have increased over the years, they did not increase as much as compared to the other community colleges in the State. The equalized assessed valuation has climbed. Mr. Wilcoxson commended the administration for maintaining the financial position of the College. Mr. Setchell questioned the reason for the financial improvement. One reason could be a healthy tax base growth. The student enrollment has been stable during this period of time. Mr. Spiller noted revenues increased by $600,000 from FY07 to FY08. Mr. Setchell noted the formal investment policy does not limit maturities; however, they have been short-term. The administration will take a look at this. Mr. Setchell also noted two funds were overspent. Cheryl Roelfsema explained that grants are not budgeted until the College receives notification. Mr. Setchell would like the audit to show that the College has a credit card limit of $10,000. Mr. Spiller indicated there would be no management letter and no recommendations to the College’s internal controls. He stated the College has excellent internal controls.

Mr. Spiller left the meeting at 8:25 a.m.

2008 TENTATIVE TAX LEVY

Cheryl Roelfsema recommended keeping the tax levy below a five percent increase over last year’s extension to avoid the need for a public hearing. The College will be levying at the maximum rates in the education fund, operations and maintenance fund, social security, and audit at the same levels as in 2007. The College will not levy for Tort. The equity tax for 2008 will be 8.16 as compared to 8.18 in 2007. Ms. Roelfsema has received information on the state tuition rates. The average tuition in the state is $84.40 per credit hour. To continue to qualify for equalization, IVCC’s tuition must be 85% of the state’s average tuition which would be $71.43. IVCC’s tuition is currently $67.75 per credit hour, which means the College would consider increasing tuition by $3.68 per credit hour in February when the administration plans for next year’s budget. Ms. Roelfsema is assuming a six percent increase in EAV, but if the tax rate goes flat or declines, this will affect the bottom line. Mr. Wilcoxson would like to see the hearing notice this year in case there is a chance of exceeding five percent. The tax rate is going down for a couple of reasons – the Tort levy was dropped and the bond issue rate dropped. Mr. Wilcoxson does not believe this a good time to leave money on the table. He would like to have a hearing and pick up what is available. Mr. Setchell asked for the discussion to be continued with the whole Board.

ATHLETICS

There has been a lot of discussion and a lot of documents shared associated with the cost of the athletic program. A year ago the recommendation was made to cut expenditures and cut the athletic director’s position to half-time and these plans have worked well, but it is not a long-term solution to the problem. Dr. Corcoran feels the athletic director position needs to be filled by a full-time employee. Looking at the whole picture, one of the goals established was to look at a more reasonable distribution of waivers. The tennis courts are not usable and are a real eyesore. Dr. Corcoran recommended dropping men’s and women’s tennis as soon as practicable and also taking a look at eliminating golf. This would free up a number of waivers to recruit students for academic excellence. Ms. Fuller asked about adding soccer as a sport. Dr. Corcoran suggested starting it on an intramural basis first. Mrs. Sweeden was not in favor of dropping these sports. She felt eliminating golf and tennis would greatly limit opportunities for students. She would agree to drop the amount of money spent on waivers. She asked if it would be possible to improve the tennis courts. Dr. Corcoran has looked at improving the tennis courts. An estimate to tear down the courts would be approximately $35,000 and to move the courts to the south end of the campus could cost approximately $150,000 per court. The tennis program has been problematic in finding a place to play and practice, limiting the number of contests the College can host. It was the recommendation of the athletic director to drop the programs. Ms. Fuller was not in favor of dropping the sports. Dr. Corcoran stated the College has eight sports; if the College eliminates men’s and women’s tennis and golf and adds soccer, it would have six sports which is in step with other community colleges. Dr. Corcoran stated a plan would be initiated over a period of time so that no one would be negatively affected. Mr. Setchell stated athletics is not a core mission of the college. It is a question of our resources and how much we spend on it. He would like to concentrate on academics. Mr. Wilcoxson is not against athletics, but feels if the College is going to have sports, it needs to do it well. Mr. Setchell asked if the College could support club organizations. Ms. Fuller stated the Student Government Association just approved the support of a runner’s club. Mr. Corcoran’s recommendation is to make the athletic director position full-time by splitting the time between athletic director and a retention specialist/academic advisor. Mrs. Sweeden stated this would address the need of increasing the students’ accessibility to meeting with counselors. Mrs. Sweeden supported the athletic director position. Mr. Setchell suggested looking into clubs for sports. When the students show they want to play, then they get funding. Mr. Setchell suggested taking the athletic program plan to the whole Board. Sue Caley-Opsal, faculty union president, stated that athletics is a very important part of a student’s success and club sports can be a very useful way to begin to develop genuine enthusiasm for the students.

TAX INCREMENT FINANCING (TIF)

Illinois Valley Community College has over 40 TIFs in its district. Mendota is in the process of extending one of its TIF districts. IVCC does not have an agreement with Mendota on this extension. This TIF is key because it is contiguous with the other TIFs. Funds cannot be transferred from one TIF district to another unless they are contiguous. Questions that were raised included: 1) what development has occurred that would not have without TIF incentives; 2) has Mendota followed the plan in the first 23 years and what are the results; and 3) is there accountability with the current TIFs. It was suggested the College set a policy on renewing TIF extensions so that all would be treated the same and would eliminate lengthy discussions on each.

Cassie Fuller left the meeting at 9:28 a.m.

Mr. Setchell believes ICCTA should provide more documentation on the impact of TIFs and the results. Mr. Carlson stated a number of projects have increased the EAV, but he does not believe these businesses would have left town. Mr. Carlson believes this TIF to be very problematic and would take an act of the General Assembly to dissolve it. He asked the College to carefully consider its position and argue for the best deal and work together with the other taxing bodies. Mr. Setchell wants the College to be fully informed on whether they should take a stand. IVCC is a minor player, but would receive 100 percent if the TIF dissolved. Mr. Setchell suggested 100 percent of the new base, or re-establish the new base and settle for 50 percent on the new construction; one hundred percent would be much better. Mr. Setchell also suggested that Mike Monaghan check with Tom Ryder to present testimony if extensions start to grow. The extension of the TIF is different than the creation of the TIF. This TIF should be closely examined before it is approved. Mr. Setchell suggested waiting to see what the agreement is once Dr. Corcoran discusses this with Tom Jacob.

The meeting adjourned at 10:02 a.m.