June 7, 2018 Audit/Finance Committee Meeting

Committee Members Physically Present

Everett J. Solon, Chair
David O. Mallery

Committee Members Absent

Jay K. McCracken                         

Board Members Physically Present

Jane E. Goetz, Board Chair
Amy L. Boyles
Joseph M. Marenda, Student Trustee

Others Physically Present

Jerry Corcoran, President
Cheryl Roelfsema, Vice President for Business Services and Finance
Deborah Anderson, Vice President for Academic Affairs
Bonnie Campbell, Associate Vice President for Academic Affairs
Chris Dunlap, Director of Information Technology Services
Kathy Ross, Controller
Steve Alvin, President of AFT Local 1810

The meeting was called to order at 4:00 p.m. by Mr. Solon.

FY2019 TENTATIVE BUDGET

The Committee was presented with a draft of the FY2019 Operating Funds budget.  The budget numbers are still in draft stage but not likely to change before the tentative budget is presented to the Board of Trustees at the July 12, 2018 meeting.  The budget is built on the same assumptions shared with the Audit/Finance Committee in January.  Ms. Roelfsema reported on the revenues:  1) EAV increased by 3.4 percent increasing the total levy from $11,325,222 to $11,670,435, an increase of $345,213.  2) Budgeted credit hours were increased to 58,000 with a 2.3 percent increase in the tuition rate which results in an increase in tuition revenue of $48,900.  3) State funding is based on 85 percent of the FY2018 appropriation   The Illinois Community College Board seems confident that FY2019 funding will be level with FY2018.  Ms. Roelfsema then reported on the expenditures:  1) Salaries and benefits are the majority of the budget.  Salary increases are budgeted at 2.0 percent.  The SEIU Local 138 contract expires June 30, 2018 and the AFT Local 1810 contract expires August 12, 2018.  There are five new personnel positions budgeted: Faculty – Cybersecurity Instructor/Program Coordinator; Faculty – Emergency Medical Services Instructor/Program Coordinator; Faculty – Manufacturing/Electrical Instructor/Program Coordinator; Student Services Recruiter – full-time; Student Services Administrative Assistant – part-time.  2) Benefits are budgeted to increase by five percent.  The administration will continue to look for ways to keep health insurance affordable.  The three major areas of uncertainty in the FY2019 budget are:  State funding, enrollments, and labor contracts.  A contingency of $289,000 has been included.  It would not be necessary to formally amend the budget unless the amount of change in any one fund is more than 10 percent of the total fund budget. The administration has reduced operating costs and used zero-based budgeting for a number of years to the point where there are few areas to make reductions other than in personnel.  Over the last seven years, 36 positions have been affected but in FY2018 four of those positions were filled again.  Additionally, six positions have been reduced from full- to part-time.  During this time, there has been a new faculty position added, Dental Assisting.  The Ag instructor position is offset by the retirement of Doug Stockley, former agriculture and computer instructor.  The budgeted Cybersecurity position replaces a Computer Instructor position that was reduced in FY2015.  The FY2019 budget also includes two new faculty positions, Emergency Medical Services and Manufacturing/Electrical instructors. Mr. Solon expressed appreciation for the work that has been done by the administrative team with the budget.

FY2018 FINANCIAL UPDATE

Ms. Roelfsema reported on projections for FY2018 year end for the Operating Funds.  The projected operating fund balance as of June 30, 2018 is $10,153,000 or 46 percent of the budgeted FY2019 expenditures.  The minimum requirement per board policy is 25 percent.  This fund balance will help the College weather the State financial woes, the uncertainty of being able to qualify for equalization funding, and the possibility of pension liabilities being shifted to the local districts.  Ms. Roelfsema reported that at this time, the cash projection for the remainder of FY2018 is positive and no borrowing from the working cash fund will be necessary. Ms. Roelfsema noted that it is a credit to staff, faculty and board members that with reduced enrollments and uncertain State funding, we have been able to monitor our spending and continue to provide quality education and services to our students. Mr. Solon congratulated Ms. Roelfsema and the administration for a job well done. Ms. Goetz noted that she particularly appreciated the teamwork involved in bringing about a balanced budget while serving the educational needs of our students.

INFORMATION TECHNOLOGY SERVICES STRATEGIC PLAN

The Information Technology Services strategic plan included replacement of obsolete Smart technology with interactive projectors, an online student application and a website redesign expected to be launched in September.  Mr. Dunlap pointed out that the plan not only contains projects that cost money, it includes initiatives that take manpower but little to no additional funding.  Mr. Dunlap noted that within the IT department having the manpower to complete projects is as critical as having the operating or capital monies to purchase the equipment and software. There was consensus among the committee that the Information Technology Services Strategic Plan be recommended to the whole Board.

OPTIONS FOR R25 UPGRADE

R25 by CollegeNet, the room, class and event scheduling software that the college has been using since 2006, will reach end-of-life in December 2018.  Since this software requires annual renewal we cannot continue using it beyond December 31.  Mr. Dunlap noted that based on product research and viewed demonstrations the purchase of 25Live by CollegeNet is recommended.  25Live provides features for classroom, meeting, and special event scheduling that we are looking for and need.  As an added advantage, 25Live is the direct replacement for our current R25 product, so implementation time and effort by college staff is greatly reduced because existing room data can be imported rather than recreating it.  The committee was in consensus that the 25Live upgrade be recommended to the whole Board.

ANNUAL DUAL CREDIT REPORT

High School students enrolled in dual credit courses continue to account for about ten percent of overall enrollment.  A similar but enhanced report on dual credit was also distributed to the committee.  The 1,004 students enrolled in dual credit in 2017-2018 accounted for over 5,976 credit hours. Ms. Campbell explained that the Career Technical Education (CTE) course offerings decreased due to the loss of credentialed high school instructors.  Therefore, while dual credit enrollments increased it was offset by a decrease in CTE course offerings which caused an overall decline in the total dual credit hours.  It was noted that online course offerings were increased as it became more difficult to offer face-to-face lectures with our instructors.  Schools are requesting additional dual credit opportunities for their students, and more schools are increasing their online offerings to students in the 2018-2019 academic year.

OTHER

Dr. Corcoran informed that the City of LaSalle and the Village of Utica will be requesting an extension of TIF Districts.  The college will be following past practice and submitting letters of support for the TIF extensions to Representative Jerry Long and Senator Sue Rezin. Ms. Roelfsema advised that these are make-whole agreements and, therefore, the college will not be losing any tax money.  Dr. Corcoran noted that the letters of support will be included as items for information at the July Board meeting. 

ADJOURNMENT

Mr. Solon declared the meeting adjourned at 4:50 p.m.