Presentation on theme: "Final Budget Presentation 2012 – 13 NSCC Focus Friday June 8, 2012."— Presentation transcript:
Final Budget Presentation 2012 – 13 NSCC Focus Friday June 8, 2012
Background: In FY 2011-12 $5 billion in cuts were made in the state budget. NSCC had planned for $1.89 million in cuts. Actual cut was $2.06 million NSCC planned fairly well. The Instructional Deans did a particularly good job.
Revenue forecasts in September did not hold up! Revenues were predicted to be $1.4 billion short for the biennium. To maintain state reserves, the required cuts grew to $2 billion. 64% of the state General Fund Budget is protected by federal and state law.
$8.7 billion of the General Fund Budget is not protected. The $2 billion worth of cuts to balance the state budget for the rest of the biennium has to come from the $8.7 billion unprotected group. That equals a 23% cut impact to the unprotected group. Higher Education is in the unprotected group!
The district prepared budget plans that reflected a potential cut of 15% for the biennium. Impact* on North: 15% was $2.05 million * Estimate do not include tuition increase in FY’12-13
Key factors that can influence the FY 12-13 budget: – 1.5% permanent cut in state funding for FY 12-13. That results in a District wide cut of $1 M with a resulting cut to NSCC of $250,000 – District overall tuition revenue shortfall of approx. $2.1M - NSCC’s share approx. $545,000 – Increased utility costs due to rate increases: $250,000
The 1.5% $250,000 permanent cut is being accomplished by the following unit reductions : Instruction: $167, 307 Admin. Services: $52,000 Std. Dev. Services: $22,159 President: $10,750 Reserve: $_______ Total Reduction $252,216
Instructional Budget Cost shift administrative positions from state to soft funds $ 82,981 Shift PT Faculty salaries to ABE/ELS TBS budget $ 18,000 Reduce PT Faculty Pool 17,74935,749 Decrease Instructional Equipment Repair budget 25,000 1/3 shared FT Faculty position (@ $52,713 per yr) $ 17,571 1/3 Benefits for FTF position 6,006 $23,577 TOTAL PLAN AMT $167,307 LESS:ORIG AMT(167,307) DIFF $ -
Budget Advisory Committee (BAC) Comments on Instruction Budget The committee strongly suggests that reallocation of WRT funds to purposes not specific to the program be closely evaluated. We appreciate the reminder regarding the importance of alignment of worker retraining funding with the purpose of the funding.
BAC Comments: Instructional Budget There is a practical limit to how much the faculty budget can be reduced while maintaining a reasonable expectation that the college will meet its legislatively mandated responsibility of generating state-supported student FTEs. As enrollment drops and the FTE target stays the same this will have to be closely monitored. We also acknowledge that we are the price point for most students. Mary Ellen O’Keeffe also noted that we are offering classes when they are full and that three full- time faculty positions were restored this year with the hope of more each year.
College Council Comments on Instruction Budget IT Services expressed concern about the reduction to the Instructional Repair Budget because the student portion of the College’s Microsoft Campus Agreement (to license Windows, Office and other MS software on classroom computers) the council would have liked more detail about the $82K of costs that are being shifted to “soft funds.” Which “soft-funds” are these and which costs are being shifted? What have the funds been used for previously? How is it that they are now available? Instruction will continue to pay a proportionate share of the license costs. Please see previous slide with dollar amounts and sources. These were erroneously identified as “soft funds”. Both WRT and the ABE/ESL TBS are state funds with reserve amounts. The question raised when the budget was presented at the May 15 Council meeting still lingers: just how sustainable are the shifts to soft funds? What is the evidence that suggests this is a viable long-term strategy? The reduction in hard dollars has been much more dramatic than the reduction in soft funds over the last 4 years. We are “conditioned” to believe that hard dollars are more stable than soft funds. This has not been the case.
College Council Comments on Instructional Budget What services/functions are we losing by reducing the Executive Dean for Workforce Education position to half-time? For the past couple of years Steve Miller has been focused on special projects including grants. The deans or faculty do not report to the Workforce Director. Therefore, we believe this will be a net gain by narrowing the scope of the position to focus on Workforce. For example, this position will move us forward on new programs and BAS degrees (which can be self support or revenue generating). The funding comes from Steve’s position. Most WF Executive Deans are currently not exclusively fulltime WF Deans.
College Council Questions for Instructional Budget What is the source of the non-state funding that will support the start-up of this department? When is it expected to be self-supporting? When is it expected to be revenue-producing?. Grant indirect budget built up over the past three years. There is a two year period to break even as a revenue producing and will not be a net for a while. $200,000 will be the target for a break even point and the plan is to have it be revenue generating.
Administrative Services: The total budget adjustments proposed by Administrative Services is $52,000. The adjustment exceeds the $40,418 target of the 1.5% reduction. The Division is cost shifting portions of five positions into the rental budget for a total of $25,000. One position is in the Business Office (Rental Coordinator), three are in the Facilities and Operations area (Custodian, L-G position, Maintenance position) and one is in Security (Manager). These positions contribute towards the success of the College rental effort. The position of Capital Project Manager remains unfunded and not filled for FY 12-13. The Director of Facilities will also not be funded or filled. The two positions are being incorporated into the responsibilities of the Interim VP for Administrative Services. This results in a salary cost avoidance of $27,000. The combination of cost shifting and salary cost avoidance results in an adjustment of $52,000 for the Division.
BAC Questions for Admin. Services There are broad-based concerns that arose during the course of this review that are described as: The reductions in permanent level employee positions, across employee categories (Faculty, classified and Exempt) experienced by the college as a result of cuts over the past several budget cycles have put pressure on remaining personnel to take on heavier workloads. We are in an era of diminished state resources and increased alternative (non-state) resources. We will need to apply new resources to new positions not just to replace but to reimagine old ways of doing things. The benchmarks will drive how we reallocate new and old resources in order to address our core themes – in other words, how we make value judgements regarding resources. Pay attention to the benchmarks!
Student Development Services: To meet the 1.5% budget reduction required of the college, the percentage of share obligated by Student Development Services (SDS) is $22,159. SDS will meet that by a reduction by decreasing allocations of goods and services, travel, equipment and part-time hourly dollars in all our state budgets. Unfilled positions such as Dean and a program coordinator will remain unfilled, but thankfully no additional positions will be left vacant at this time.
BAC/College Council Questions for SDS None listed except for general comments below.
President: $10,750 Will be met through cutting goods/services and travel. Continue sharing of salary for “data-puller” with our sister colleges
BAC Comments on President’s Budget BAC members express a preference that the President is reimbursed for all travel costs correctly owed. So noted and appreciated by the President.
General Comments by BAC Continued permanent reductions in non-permanent personnel categories as well as non-personnel categories presumably leave holes at least in some instances that must eventually be filled. In divergence from past practice in regard to funding costs that cannot be avoided may leave open the question of how ultimately those costs will be covered. Mark stated that this is where the Unmet Needs Process falls into place.
Did the College Council Criteria Align with the Budget? Alignment with mission and core themes: Refilling three vacant full- time faculty positions is a definite step toward rebuilding the faculty core that is so essential to our mission, and a step that the council fully supports. Comprehensive Offerings: The proposed budget seems consistent with this principle. Collaboration/Consolidation: Instruction’s plan to share a faculty member with Seattle Central is a good example of this principle in action. Within Student Development Services, unfortunate as the reduction in part-time hourly funding is, a silver lining may be that it will promote even more cross-training for which that area has already distinguished itself.
College Council Criteria Program/Service Elimination: In Fall 2011, when the college was facing budget cuts of 13-15%, the council wrote that “another series of horizontal cuts will subject the college to ‘death by a thousand cuts’”. Instead, it recommended that “a much better approach for the health of the entire college is to eliminate programs and services that can no longer be sustained.” The budget reductions that have been proposed for 2012-13 reflect a horizontal approach in that the four major units were asked to make across-the-board cuts of 1.5%. However, since the cuts were relatively small, it seems like a reasonable approach, and one that does not seem to seriously jeopardize overall college functioning.
ETEAM Comments on Vertical Cuts Cuts Only and Using Vertical Cuts - $2 million Eliminate Humanities or Eliminate Math/Science or Eliminate both HHS and BEIT or Eliminate all of SDS or Eliminate 50% of Admin Services... Still required to meet target and collect tuition and improve student success and remain accredited
College Council Criteria An exception, however, is within Administrative Services. The council is concerned that applying the same level of cuts within this area, and accomplishing this in part by having one person assume three jobs— Vice President for Administrative Services, Facilities Director, and Capital Projects Manager—amounts to some “hollowing-out” and degradation of essential services within these important areas. Some reported experiencing such degradation already, and fear more of it as the new major construction project begins While applauding Vice President Monterecy’s work ethic in being willing to continue to take on the responsibilities, the council is not convinced it is in the best interests of the college. Beyond the “hollowing-out”/service degradation concerns, there is also a concern that the college would be so dependent on one individual for such a wide range of important responsibilities. Single-person dependency does not seem healthy for the institution in the long run.
Response to College Council by Admin Services The context within which wearing three hats developed is based on the following: The Interim VP of Administrative Services, during this period of diminishing funding, felt that the Division needed advocacy and action during the resource redistribution process. Facilities, IT, and Custodians had been historically understaffed and underfunded. These functions could not be reduced any further. Maintaining the capital position and facilities director vacant assisted in those areas without fiscally overburdening the Division budget. The VP’s education and experience can support this activity for a period of time while developing existing talent on campus to backfill critical functions.
Response to College Council by Admin Services During this period of diminishing resources, talented in-house staff was identified, their skills recognized and developed. The Business Office, Facilities and IT are critical functions in attracting/keeping students and in providing the essential delivery system for the educational products we provide. We focused with First Impression Projects: campus wide power washing; elevator upgrades; furniture replacement; landscaping improvements; established a day-time custodial crew; bathroom upgrades; undertook minor renovation projects with in-house staff; IT created enhancements and cost saving improvements throughout campus; and the Business Office established a budget director and added an internal auditor function. The critical parts of the capital budget function are: creating the project idea; identifying funding sources; getting resources aligned; manage/oversee the design process and overseeing construction. The last phase is the easiest, this phase mainly requires budget oversight, maintaining momentum and facilitating the construction process.
Response to College Council by Admin Services The major essential portions of the capital process are now past. It will be quite a while before another major capital project occurs at North. Most activity will be minor projects: For Example: Art Gallery, E-learning Expansion. Internal talent has already been identified and developed for this. By FY’14 the Facilities Director administrative function will be reestablished. The functions of capital project manager and VP of Administrative Services will continue to be combined. The Division will continue to look for opportunities for sustainable cost shifting where possible; rebuild staffing to adequate levels; develop in-house talent and continue to develop job growth opportunities within available resources.
College Council Criteria Privatization Should Be Considered: In Fall 2011 the council wrote that it “does not see privatization of college services as a preferred strategy,” but when faced with the then anticipated 13- 15% budget cuts, “all strategies [including privatization] must be ‘on the table’”. When discussing the proposed budget at the May 15 council meeting, the Executive Team acknowledged that it had considered privatizing Food Services, but then rejected that option. Instead, it hired Amanda Lopez-Castanon as the new Food Services Manager and charged her with reversing the trend and turning food services into a revenue center. The council appreciates the fact that the Executive Team considered privatization as a possible strategy (e.g. not rejecting it outright), and it congratulates Amanda and her colleagues for the successful turn-around of Food Services.
College Council Criteria Self-Support: The council sees the creation of the contract training department under Steve Miller, supported with non-state funding, as consistent with this principle. It is a step in the right direction toward making more areas of the college not only self- supporting, but revenue-producing. The anticipated revenues from such ventures will be increasingly important if, as expected, state support for higher education continues to decline.
General Comments by College Council Vacancies by Default Rather Than Design A common practice during recent budget-reduction years has been to address budget shortfalls by not filling vacant positions. The council’s acute concern about this practice within Administrative Services has already been noted, and yet a similar concern was registered for Student Development Services where several years’ of single individuals wearing “multiple hats” is putting a strain on both personnel and systems. This approach is understandable and expedient, but—like horizontal reductions—it does not reflect a strategic approach. That latter would make budget reductions and/or organizational restructuring decisions based on a clearly articulated vision of what the campus needs for the future it wants to create. There is some concern among the council that the college may simply be postponing difficult decisions—what some see as inevitable decisions—about what it wants to be and whom it wants to serve in the future.
Response to College Council The strategic plan core themes, goals, indicators and benchmarks will drive the budget next year. The benchmarks will be critical in determining where we allocate resources and where we eliminate resources. The benchmarks will be established by the ETEAM and a comment period will provided next fall quarter.
Thank You A special thank you to the Budget Advisory Committee and Dennis Yasukochi for thoughtful commentary and questions on the first draft of the budget. Another special thank you to the College Council for their review of how we did or did not meet the criteria established in December.