July 28, 2020 Audit Finance Committee Meeting
The Audit/Finance Committee of the Board of Trustees of Illinois Valley Community College District No. 513 met at 4:30 p.m. on Tuesday, July 28, 2020 in the Board Room (C307) at Illinois Valley Community College.
Committee Members Physically Present
Everett J. Solon, Committee Chair
Committee Members Virtually Present
Jay K. McCracken
Maureen O. Rebholz
Committee Members Absent
Board Members Physically Present
Jane E. Goetz, Board Chair
Others Physically Present
Jerry Corcoran, President
Cheryl Roelfsema, Vice President for Business Services and Finance
Chris Dunlap, Director of Information Technology Services
Kathy Ross, Controller
Others Virtually Present
Deborah Anderson, Vice President for Academic Affairs
Mark Grzybowski, Vice President for Student Services
Bonnie Campbell, Associate Vice President for Academic Affairs
Susan Monroe, Dual Credit/Dual Enrollment Coordinator
The meeting was called to order at 4:38 p.m. by Mr. Solon.
Dr. Corcoran informed that the Gubernatorial Disaster Proclamation was signed by the governor on July 24 and will be in place for another 30 days, therefore, parts of the Open Meetings Act relevant to physical and in-person attendance have been waived. This allows us to conduct board business with remote attendance by members of the Board of Trustees.
FY2020 FINANCIAL UPDATE
Ms. Roelfsema reported that the preliminary results for fiscal year 2020 show a strong financial position for the college. For all funds there is a surplus of $960,476, however, three funds show deficits. Operations & Maintenance Restricted Fund is mostly Protection, Health and Safety tax levy money which is collected a year or two prior to the project being completed. This fund still has a balance of over $5 million. The Auxiliary Enterprise Fund shows a deficit due to a loss in the bookstore and the planned usage of fund balance to subsidize athletics. The bookstore is experiencing some major shifts in student preferences as on-line textbooks become more sought after. Due to the pandemic and classes going to on-line instruction, the bookstore missed sales of general merchandise for spring and summer semesters. The Restricted Fund also shows a deficit which is the result of the timing of the receipt of grant funding. General Fund revenues are at 99 percent of budget. Local tax revenues and safe funding were above budget while tuition for credit hour classes, continuing education, and facilities revenue were under budget. For FY2020 credit hours were budgeted at 53,000 but were just under 51,000 credit hours. The only functional area with expenditures over budget was Student Services due to a project with a RSM Consulting on course scheduling. Total Education Fund expenditures were at 93 percent of budget and Operations and Maintenance Fund expenditures were at 79 percent of budget. Auxiliary Enterprise Fund revenue was at 85 percent of budget while expenditures were at 88 percent of budget causing a deficit which was planned for in the FY2020 budget. Restricted Fund revenues were 90 percent of budget while expenditures were 94 percent of budget. The deadlines for many grants were extended due to the pandemic. As these grants are finalized and revenues and expenditures are recognized, there should be no deficit. Liability, Protection and Settlement Fund revenues were 96 percent of budget and expenditures were 67 percent of budget. The lower expenditures were due to switching classes to on-line and reducing the number of employees. Mr. Solon thanked Ms. Roelfsema, and the business office team for the detailed work on the financial report. Dr. Corcoran commended Ms. Roelfsema, Ms. Ross and the entire business services staff for a job well done.
FY2021 TENTATIVE BUDGET
Ms. Roelfsema informed that the plan is for the tentative budget to be presented to the full Board at the August meeting with final passage at the September Board meeting. The Committee was presented with a draft of the FY2021 tentative budget. Ms. Roelfsema noted that budget assumptions were shared with the Audit Finance Committee in January 2020, two months before our instruction moved to almost entirely on-line. Salaries and benefits make up 75 percent of the general fund budget. Salary increases are budgeted overall at 2.5 percent for FY2021. The AFT Local 1810 contract was renegotiated for three years through academic year 2020/2021 with average increases of 2.79 percent the first year; 2.81 percent the second year; and 2.75 percent the third year. The SEIU Local 138 contract was renegotiated for four years through June 30, 2022 with annual increases of 2.5 percent. There are no new positions included in the FY2021 budget. Benefits are budgeted to increase by five percent. The administration will continue to look for ways to keep health insurance affordable. The health insurance premium increases have been two percent each year for the last two years. The FY2021 budgeted revenue for all funds is $32,176,234, a less than one percent increase over the FY2020 budget and 4.4 percent over the FY2020 projected actual. Budgeted expenditures are $32,540,797, a less than one percent increase from the FY2020 budget and 8.7 percent over the FY2020 projected actual. Most categories of expenditures for FY2020 were below budget. The FY2021 budgeted general fund revenue and expenditures increased by 1.4 percent over the FY2020 budget. Revenues and expenditures plus transfers are balanced at $22,595,796. A contingency of $600,000 has been included in the general fund. Early assumptions regarding enrollments were to maintain the level of FY2020 at 51,000 credit hours. Low enrollments are a concern at most of the Illinois community colleges. The State budget is based on additional borrowing and an assumption that the income tax increase on the November 3 ballot will pass. If the income tax increase does not pass, there could be a reduction in State funding. Our methods of instruction have been affected by the COVID-19 pandemic. Face-to-face instruction has been replaced by on-line and blended instruction. Ms. Roelfsema noted that all these uncertainties make it important to have a contingency to cover revenue shortages or invest in personnel, infrastructure, or equipment to effectively deliver instruction. While $600,000 seems like a large sum, it is 1.8 percent of the total budget expenditures and 2.7 percent of the general fund expenditures. The committee was in agreement of moving forward with the tentative FY2021 budget being presented to the full Board at the August 13th Board meeting with final approval at the September 10th Board meeting.
INFORMATION TECHNOLOGY SERVICES ANNUAL PLANS
The Information Technology Services Annual Plans outlined the status of FY2020 projects and the major projects list for FY2021. Mr. Dunlap reported that the listed projects include those that have a cash outlay as well as those projects and initiatives that take manpower but little to no additional funding. He noted that projects completed for FY2020 included: 1) the conversion of Windows 7.0 to Windows 10.0 and all lab and office machines being reimaged and 2) the email migration to Office Exchange 365 for employees. Mr. Dunlap highlighted the plans for the coming year that included: 1) a student planning module; 2) lab upgrades; 3) installation of a self-service financial aid module; and 4) network firewall upgrades.
DUAL CREDIT ANNUAL REPORT
Withdrawals, caused mainly by the move to online instruction during the pandemic, resulted in a drop in credit hours and a decrease in head count of 86 students. There were 842 students in 2019-20 compared to 928 in 2018-19. For FY2021, Ms. Campbell informed that we have added classes at Princeton and discussions are planned with other high schools about additional class offerings for the coming school year. She noted that we will continue to offer more online courses for Dual Credit as well. Mr. McCracken expressed appreciation for all that has been done by the IVCC staff for the Career and College Start and Dual Credit programs. He thanked Bonnie Campbell, Mark Grzybowski and Susan Monroe for their tremendous efforts – Kudos to all.
Dr. Corcoran thanked the Business Services & Finance team for its continued professionalism.
Mr. Solon declared the meeting adjourned at 5:10 p.m.