April 1, 2013 Audit/Finance Committee Meeting

SABBATICAL LEAVE REQUEST

Amanda Cook Fesperman is requesting a full-year sabbatical leave at half-pay for the 2013-2014 academic year.  Three sabbatical requests were received, but only two were received by the deadline.  This request is unusual in that she had already been granted a previous sabbatical in 2007-2008 and she is requesting a second sabbatical sooner than the typical six-year interval.  The current faculty contract states that “A faculty member is eligible for consideration for leave after the sixth consecutive full year of service.  Special consideration will be given to granting an out-of-sequence leave to a faculty member enrolled in a doctoral program who may require such a leave to complete residency requirements.  Faculty with thirty (30) semester hours of non-traditional teaching will be credited with one year toward sabbatical leave.  Examples of non-traditional teachings include summer; weekend; evening extension centers; and classes in compressed, on-line, and blended formats.”  Amanda has 72 hours of non-traditional teaching since 2008.    Her first sabbatical was for the purpose of working on a PhD and she needed to take a full year of course work over the two semesters.  Her current sabbatical request will allow her to complete her doctoral work.  She has completed a great deal of research for her doctoral and is sharing this information in her classes now.  The projected savings to the College for the 2013-2014 academic year will be between $25-30,000 by using part-time faculty or other full-time faculty at the part-time or overload rate to cover Amanda’s classes.  The Audit/Finance committee members supported Amanda Fesperman’s sabbatical leave request and the request will move forward to the full Board for approval.

PURCHASE REQUEST – COMMUNITY INSTRUCTIONAL CENTER PROJECT PHASE 1 AND 2 TECHNOLOGY EQUIPMENT

The Committee received a list of technology equipment to be purchased for the Community Instructional Center project Phases 1 and 2.  This equipment goes beyond the classroom technology equipment that was presented by Sue Isermann at the February board meeting.  This will include networking, phone system, and equipment for the meeting rooms.  Funding for this equipment will come from the Information Technology fund balance and the Student Technology fund balance.  By combining the CTC equipment with the east campus equipment, the administration believes they could receive a better price.  Cheryl Roelfsema provided an update on the CIC Project change orders and technology budget.  For Phase 1 the contingency was $1,056,900 minus the approved change orders ($85,574) as of March 4, 2013, leaving a balance of $971,326.  The Phase 2 contingency was $471,039 minus the approved change orders ($38,454) as of March 4, 2013 leaving a balance of $432,585.  The CIC budget included $1,000,000 for furniture, fixtures, and equipment.  This budget was inadequate to include all the technology and furniture so the capital campaign was started to fund the educational lab equipment and the smart classroom technology.  The IT fund balance was $818,821 as of June 30, 2012.  In September 2012, the Board authorized using $318,636 for the SQL Migration Project.  With the $405,604 being requested for the CIC project, the remaining fund balance will be $94,581.  The student technology fund balance as of June 20, 2012 was $333,096.  Smart room technology clearly fits the parameters of the student technology fund.  The fund balance after the CIC project purchase will be $168,746.  If the furniture for the project is less than $1,000,000 any remaining funds would be used for technology and the withdrawal from the student technology funds would be reduced.  It was suggested that Dr. Corcoran send this information to the other board members. 

FY2014 AND FY2013 OPERATING BUDGET UPDATE

With the revenues being estimated and the requests from all the budget officers submitted, the operating budget has a deficit of $900,000.  This is just a starting point for the FY14 operating budget.  The total operating revenues are expected to be $20,700,000.  This is $168,000, or .08 percent, greater than FY13 budgeted revenues.  Local revenues are expected to decrease by 2.1 percent and the state revenues by 6.6 percent.  The Illinois Veterans Grant has been cut.  Revenues from tuition are expected to increase by 6.7 percent.  This includes a 2 percent credit hour decrease and an increase in tuition.  Expenditures are 4 percent over budget.  The $100,000 contingency was eliminated for FY2014. By eliminating the contingency there would another $100,000 that could be used toward contract services or travel and development.  This is a conservative measure but a way to meet as many needs as possible.  If something should happen, the expense would be taken out of fund balances and the fund balances would still be in line with the state and local guidelines.   Dr. Corcoran was pleased with the response from Tracy Morris and Tommy Canale in reducing athletic tuition waivers which will result in an immediate savings to Fund 1 in FY2014 and doubling the amount in FY2015.  They have also identified a savings in Fund 5 and this will mitigate the support from the College Bookstore.  To arrive at a balanced budget, the Budget Council is considering the following:  prioritization of personnel vacancies, addition of new strategic growth area positions, elimination of nonessential positions, increase in professional development opportunities, inflation factor of 2 percent and an increase in salary and wages of 3 percent, capital equipment requests, and a reduction in athletic waivers.  The current fiscal year is close to budget and is being closely monitored.  If there is an opportunity to purchase equipment for next year, it will be funded in the current year to utilize any potential surplus. 

AFFORDABLE CARE ACT IMPLEMENTATION – LOOK-BACK PERIOD

The Affordable Care Act allows employers to apply different look-back periods for different classes of employees.  The importance of the look-back period determines the stability period that the College has to offer health insurance to full-time employees.  The administration is considering a 12 month look-back period.  This can be changed in the future.  The collective bargaining units do not need a look-back period.  Only full-time employees are allowed in the units, so there is no uncertainty of status in this class.  Salaried employees, including part-time faculty will have a 12 month look-back period to determine full-time status.  Any employee working more than 1,560 hours in calendar year 2013 will be eligible for insurance for all of 2014.  A 12 month look-back period will allow for some scheduling flexibility and enough time to adjust schedules to remain in compliance with the Act.  Hourly employees will also use a 12 month look-back period to determine full-time status.  Any employee working more than 1,560 hours in calendar year 2013 will be eligible for insurance for all of 2014.  This will allow the College to increase hours during peak times and decrease hours during slower times to meet the needs of the students while remaining compliant with the Act.  Part-time hourly employees will be capped at 1,450 hours per year.  Part-time faculty will be limited to nine credit hours per semester and this will still allow them to teach a limited number of Continuing Education classes or perform program coordinator duties.  This will be monitored closely at the supervisory level.  Until IVCC receives an official ruling, it will use these calculations.

HIGH DEDUCTIBLE INSURANCE PLAN

Pat Berry, Glenna Jones, and Cheryl Roelfsema have worked with Steve Bushue, consultant for the Community College Insurance Consortium, to provide an affordable health insurance option under the Affordable Care Act and to reduce health insurance costs.  This option is a High Deductible Health Plan which could be offered to IVCC employees starting January 1, 2014 along with the two plans currently in place.  The proposal would include a $2,000 deductible for an individual plan and a $4,000 deductible for a family plan.  The plan for in-network charges pays 90 percent after the deductible is met and for the out-of-network charges, the plan pays 70 percent after the deductible is met.  This could be a savings of $2,834 for employee only plan, $5,724 for employee plus one, and $7,130 for the family plan. These are preliminary numbers and on the conservative side. A Health Savings Account works hand in hand with a High Deductible Health Plan.  Suggested College contributions to the employee Health Savings Account, based on a formula that includes the annual premium savings would be:  Employee ($2,000), Employee plus one ($3,000), and Family ($5,000).  This is modeled from colleges in the Insurance Consortium that have a High Deductible Plan in place.  The College will realize a substantial savings, also.  This is a big decision for the employees.  Mr. Bushue plans to provide sessions for employees before summer.  It was suggested to provide case studies for the employees as to how they will save money with this plan.  The Audit/Finance Committee agreed that it is well worth pursuing.  The final decision will be a Board action. 

OTHER

The City of Granville would like to establish a TIF district in its downtown area and property south of Route 71 for retail.  The first meeting of the Joint Board of Review was held.  Every taxing body involved was invited to attend.  Only three were in attendance – the mayor, an at-large member, and Cheryl Roelfsema, representing IVCC.  There is no intergovernmental agreement with the college.  Cheryl has spoken to the Granville Mayor regarding an intergovernmental agreement and would like to continue to work with him in considering such an agreement similar to those the College has in place now with other cities.  It is not a large monetary amount, but it is the principle that we have intergovernmental agreements with other municipalities.  The Audit/Finance Committee was in agreement to pursue this issue.