July 5, 2016 Audit/Finance Committee Meeting

The Audit/Finance Committee of the Board of Trustees of Illinois Valley Community College District No. 513 met at 5:30 p.m. on Tuesday, July 5, 2016 in the Board Room (C307) at Illinois Valley Community College.

Committee Members Physically Present

Dr. Larry Huffman, Committee Chair
Jane E. Goetz
Everett Solon

Others Physically Present

Jerry Corcoran, President
Cheryl Roelfsema, Vice President for Business Services and Finance
Deborah Anderson, Vice President for Academic Affairs
Sue Isermann, Associate Vice President for Academic Affairs
Mark Grzybowski, Associate Vice President for Student Services
Jennifer Scheri, Interim Director of Continuing Education and Business Services
Kathy Ross, Controller
Glenna Jones, Director of Human Resources
Emily Vescogni, Director of Learning Technologies
Chris Dunlap, Associate Director of Network Technologies
Rebecca Donna, Instructor
Lori Cinotte, Instructor
Steve Alvin, Instructor
Mike Phillips, Instructor
Vince Brolley, Instructor
Jill Urban-Bollis, Instructor
Missy Killian, Counselor

The meeting was called to order at 5:30 p.m. by Dr. Huffman.

FY2017 Tentative Budget

Cheryl Roelfsema presented a draft of the FY2017 tentative budget. The FY2017 tentative budget will be presented to the Board of Trustees at the July 14, 2016 meeting. Assumptions were built into the financial plan in January and were discussed with the Audit/Finance Committee in January and April. The budget continues to carry out those assumptions. Overall, the budget revenues for all funds are $32,872,000, a decrease of 1.9 percent, and expenditures are $33,568,000, a decrease of 7.6 percent from the FY2016 budget. The FY2016 budget included $235,000 to finish the Community Instructional Center Project. If the $235,000 was eliminated from FY2016, the FY2017 budgeted revenues would decrease 1.2 percent and expenditures would decrease 7.0 percent. Looking at the Operating Funds, which cover the majority of routine expenses at the College, revenues are budgeted at $22,028,000, which is a $445,000, or 2.1 percent increase. To get to that increase, there is an increase in the equalization tax of approximately $800,000; a $5 increase in tuition rates, assuming that credit hours are going to be flat or slightly down; and a significant decrease in State revenues. Operating Fund expenditures are $22,280,000, up $117,000, or 0.5 percent, from FY2016. Since IVCC’s operating tax rate is below the state average, IVCC can levy up to that amount for equalization.

The FY2017 tuition rate is $124 per credit hour.

Due to no State budget, it is difficult to budget State funding. In 2016, IVCC received only 27 percent of the FY2015 State funding, or $611,000. On June 30, 2016, stop-gap funding for FY2017 was passed. The budget was built on 75 percent of FY2015’s State revenues, which is approximately $1.8 million. The stop-gap funding is supposed to cover the first six months of the fiscal year and IVCC’s allocation will be $862,000, or less than 1/2 of the amount budgeted for State funding.

As the budget is rolled out, the administration will need to continue being cautious and look at reducing noncritical expenses in anticipation of what funding will be available for the second six months. It is doubtful there will be any more funding until after the general election in November.

IVCC covered MAP grants in both Fall and Spring of FY2016, being in the minority of community colleges covering Spring 2016 MAP grants. The College received notice that the State will cover all 2016 MAP grants. There is no word yet on 2017 MAP grant funding. The 2017 budget is built on the assumption that the State will pay MAP grants.

On the expenditure side, salary increases range from 2 percent to 2.92 percent. There was one additional position budgeted – Agriculture Program Coordinator/Instructor. Over the last few years, 14 full-time positions and one part-time position have been eliminated, and five positions were reduced from full- to part-time. Benefits are budgeted to increase eight percent due to an increase in health insurance. IVCC will continue to look at other options for health insurance.  Other options will not necessarily be a savings, but IVCC is trying to contain the cost going forward. There is a transfer of $262,000 from Auxiliary Fund 05 to Education Fund 01, to cover ITS capital purchases to balance the operating budget.

If State funding does not materialize, an amended budget may need to be done in the spring. Operating costs have been reduced in every way possible; zero-based budgeting was used.

The utility budget is slightly higher this year to be conservative. IVCC has enjoyed low utility rates for several years.

The committee is pleased that the State funded the MAP grants for FY16 and is really proud of the College’s decision for FY16. The committee hopes to replicate MAP funding for FY17. If the College has something similar for FY17, it will need to be mindful that it might not receive 100 percent funding from the State.

CPPRT is budgeted at a higher number than has been budgeted recently because receipts have been running higher for 2016.

Fixed charges are budgeted at half of the last three years’ budgets because IVCC has a new lease for the semis for Truck Driver Training that is considerably lower than it had been.

Per Dr. Huffman: Cheryl has painted an accurately dismal picture for state funding. Tuition and local taxes are the College’s only salvation. If MAP is covered, the College is more likely to keep enrollment close to prediction levels; MAP grants have to be funded for that to happen.

Per Dr. Huffman: Equalization taxes, compared to neighboring and comparable colleges, is still only 75 percent of the average. The average tax rate is 50.64, while IVCC’s tax rate is 36.45.

The impact of the stop-gap budget for FY16 is very disappointing since State revenues are down $1.5 million and IVCC is going to have a deficit for 2016.  The College did not withdraw Working Cash funds this past year but it was very close. If the Working Cash funds are withdrawn, it must be paid back within 12 months. There are not many revenue streams and IVCC will be forced to dip into reserves. If reserves go below 25 percent, IVCC will need to create a plan to increase reserves.

The committee is glad to see a contingency included in this budget.

The committee thanks Cheryl and the Business Office and everyone who is “penny pinching.”

FY2017-2019 STRATEGIC PLAN FOR Information Technology

The Committee was provided PowerPoint presentation slides from Harold Barnes and Emily Vescogni. The Strategic Plan for Information Technology was originally developed in 2004. The Strategic Plan is a plan for technology across campus, not just for ITS.  Six technology goals are aligned with campus goals and IVCC’s Key Performance Indicators. Emily reviewed projects that were completed in FY2016 and introduced FY2017 projects. ITS has been very busy in FY2016: upgrading the phone system to virtual servers, replacing network switches between buildings to increase bandwidth, establishing an A/V network, and launching Office 365 for students. Students received new email addresses, beginning with summer 2016 semester, and they can now download Office 365 to their personal computers for free. ITS also joined the State Authorization Reciprocity Agreement (SARA), to enroll online students from other states. Upcoming projects include: Website redesign (no additional expenses anticipated); Customer Relationship Management (CRM) updates for online applications, automated communication, communication analysis, and reporting and diagnostic tools (annual cost of $32,000); performing a security audit ($26,500); implementing a data dashboard (no additional costs); upgrading the server room uninterruptible power supply ($49,000, annual cost of $3,000); and searching for a new Director of ITS with the retirement of Harold Barnes in December 2016.

The committee appreciates doing a security analysis versus what it is going to cost if an analysis is not conducted and there is a breach in the system. The committee really appreciates tying the IT goals to the College’s AQIP goals and the delineation of funding sources, which is helpful and relieving to know that most of the funding isn’t taking away funding from operational areas of the College.

Dual Credit Enhancement Pilot Project

Deborah Anderson presented two dual credit enhancement pilot projects. The first project offers dual credit courses at no cost to high school students eligible for free or reduced lunch. The second project offers incentives to students who have completed 30+ credits in dual credit/dual enrollment courses while in high school and matriculate to IVCC on a full-time basis at the reduced tuition rate. These projects will start with the fall 2016 semester, pending Board approval. The pilot will take three years, which should be enough time for students to complete dual credit courses as juniors and seniors and then attend at least one year at IVCC. A Dual Credit Task Force is putting together measures that will determine the success rates of these projects. The goal is to increase the matriculation rate, which is currently 34-35 percent, while also increasing enrollment in dual credit courses, which would hopefully lead to higher enrollments as those students graduate from high school. This addresses two KPIs – degree attainment and market penetration – while also responding to the needs of the communities IVCC serves.

The Committee requested a projection of figures be presented to the Board, including the percentage of students who qualify for free or reduced lunch and expected data feedback by semester and school. Approximately 45 percent of high school students qualify for free or reduced lunch and over 30 students have taken over 30 dual credit courses over the last three years.

Department of Labor Overtime

The Department of Labor is raising the minimum salary for exempt employees. The threshold went to $47,476 and goes into effect December 1. Glenna Jones, HR Director, has identified nine employees that will be affected by this, which brings the amount to approximately $16,000. IVCC will work with individual supervisors to either raise the employees’ salaries to the minimum level or convert them to an hourly rate. This information will be brought to the full Board in October or November, for implementation on December 1.

Affected employees will know what is happening on December 1.

Revision to Board Policy 3.29 – Tuition Policies

This revision applies to the administrative procedure for Fitness Center enrollment and pertains to those who have completed the 20-course sequence in the Fitness Center.

A team, consisting of Mark Grzybowski, Sue Isermann, Deb Anderson, Cheryl Roelfsema, Tony Ruda, and Ron Groleau, met to craft this recommendation. ICCB is not approving any additional fitness courses for credit. IVCC does not want to penalize individuals who want to maintain their level of fitness.

The recommendation could be a monthly fee that is realistic but not expensive, $25-$30/month, which is about half of what it would cost to go to the YMCA. Taking into consideration the operating costs of the Fitness Center, this cost is reasonable.