The video below shows the Community College Governing Board discussing Dr. Clint Ewell’s tentative budget increase suggestions for 2017-18. The discussion took place January 16 during the regular Board meeting on the Prescott Campus.
It appears that at least three members were uneasy with the Administration’s suggestion that it consider approving in February a 5% tuition increase and in May a 4% property tax increase. (Representative Connie Harris was seen occasionally nodding, which suggests she may have also been concerned.)
Chair Ray Sigafoos seemed most concerned with the property tax rate hike. Representative Deb McCasland pointed out that there was a questionable need for more money to increase deferred maintenance and alluded to the College’s large reserves. Representative Pat McCarver seemed concerned with both the tuition and tax rate hike. The video is about four minutes in length.
The short video below contains Dr. Clint Ewell’s list of needs that the Administration believes justifies its request for a 4% property rate increase and a 5% tuition increase. The list is “preliminary” although the tuition rate will be set next month at the February Board meeting.
The Wills’ administration, in preliminary talks about the 2018-19 budget at the Governing Board meeting on Tuesday, January 16, sought large increases in revenue flowing to the College. The Administration suggested a four percent increase in the Yavapai County Property Tax rate. It also suggested a five percent student tuition increase for 2018-19.
The suggested increases did not go down well with at least three members of the Board. Board members Deb McCasland (Verde Valley/West side), Ray Sigafoos (Prescott) and Pat McCarver (Chino Valley) all indicated concern with the either the tax rate or tuition or both. Sigafoos seemed particularly concerned about the tax rate increase. He suggested the Administration go back to the drawing board and return with a more reasonable proposal.
Third District Verde Valley Representative Connie Harris and Prescott Valley Representative Steve Irwin said nothing.
The proposal by the Wills administration is a preliminary one. In February the first serious test of the recommendation will come when the Board sets tuition for the 2018-19 academic year. The tax rate decision will come after that with a final decision in May or June 2018.
The College estimated in May it will lose an estimated $330,000 in 2017-18 state aid because of the decline in the number of students taking accredited classes. This estimate should change because student enrollment has leveled off.
The aviation program, which has already lost more than a million dollars in tuition and fees over the past two years, will lose another $160,000 in 2017-18 because of the continuing decline in enrollment in that particular program. So far, there is no indication this estimate will change.
County property taxes will not be increased in 2017. 2017 is the second year in a row the Governing Board has not increased the tax rate. Recall that a majority vote of three on this Board can increase the tax rate on the property taxes of Yavapai County voters. (And there is no oversight and no appeal.)
Tuition was increased for 2017-18 by about 5%. This is far above local inflation. The Governing Board has increased tuition in some form every year over the last decade. The tuition increases have far outpaced inflation every year.
What is called the County “new-construction tax” will bring in about $680,000 in additional revenue to the College in 2017-18.
When comparing student headcount from 2008-09 to 2015-16 (the last formal report from the College) there are 3,894 fewer students taking credit courses (14,139 vs. 10,245). This is a drop of 27.5% in student enrollment. The decline continued in 2016-17. While the Governing Board received a prediction in May 2017 that enrollment would decline by 4% in 2017-18, it actually increased slightly.
When comparing student tuition and fees 2008-09 to 2017-18 the College will be collecting $4,678,500 more in tuition and fees in 2017-18 than it did almost a decade ago despite the huge drop in student enrollment. ($6,927,300 vs. $11,605,800).
When comparing primary property tax revenue from 2008-09 to 2017-18 the College will be collecting $8,683,119 more in property taxes in 2017-18 that it did in 2008-09 ($35,227,381 vs. $43,910,500). Almost all of the increase is used to support capital expenditures. Traditionally, the College had to persuade voters to approve a General Obligation Bond before revenue was expended for capital improvements. The Bond was repaid by assessing a County-wide secondary property tax. The College now uses primary tax revenue, which was once intended primarily for programs and staff salaries, for capital projects. This keeps County citizens from asking questions about the projects; the process also gives the Administration almost total discretion to build and renovate whatever it desires without justifying the project to the citizens (and the expenditure of their tax money) or explaining the overall efficacy of the project to them.
Note that in 2008-09 state aid accounted for $4,761,000 in revenue coming to the College. It is estimated that in 2017-18 the College will receive about $1,979,100 from the state of Arizona in total support. That is a difference of $2,781,900.
Overall, it appears that College will have $10,579,719 more in revenue to spend in 2017-18 that it did in 2008-09 and a student body taking accredited courses that has shrunk by almost 30% (using headcount) over the past decade.
The Yavapai Community College administration reported to the Governing Board at its August 8, 2017 meeting that it had spent $17,343,277 during the fiscal year 2016 – 17 on capital projects. It had originally budgeted $11,648,400 to spend on buildings and grounds during that period. It attributed the additional $6 million increase in capital spending to the Prescott Valley building expansion and the Sedona Center remodel.
Because College has so many millions of dollars paid in by taxpayers annually, there was no need for any bonding needed to provide $17 million for these capital projects. As this blog has repeatedly told its readers, the college is flush with revenue. Furthermore, in the opinion of the blog, there is little serious oversight over how these millions are spent each year after basic educational expenses are met.
You may view the College explanation and verify the amount spent on capital projects during the past fiscal year by clicking here and going to page 23 of 154.
The College ended the 12-month fiscal year on June 30, 2017 with a $2.5 million surplus. When college administrators were asked by representative Deb McCasland how that surplus was to be used, they said it would be applied to future capital projects.
Overall the College explained that “General Fund revenues are projected to be below budget by $208,000 and expenditures are projected to be under budget by $2,736,000. Revenues are lower than budgeted due to lower fall and spring semester enrollments and the gradual reduction of the aviation program. Expenses are less than budgeted due to several factors including unspent contingency funds, vacancy savings, lower non-labor expenditures (i.e. utilities) and the utilization of available Proposition 301 monies (in lieu of General Fund monies).”
The College administrators did not offer the Governing Board any possible alternatives for the use of this excess surplus revenue. For example, to award faculty bonuses or develop additional educational programs. In fact, if representative McCasland had not raised the issue about the surplus, it would have been submerged in the consent agenda with no discussion at all.
You may click here to go to the August 2017 agenda where on page 20 of 154 you will see the surplus.
The Administration’s statement on use of the surplus is below.
The Certificate of Achievement for Excellence in Financial Reporting has been Awarded to Yavapai County Community College District by Government Finance Officers Association of the United States and Canada (GFOA) for its comprehensive annual financial report (CAFR). The Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting. Its attainment represents a significant accomplishment by a government and its management.
The CAFR has been judged by an impartial panel to meet the high standard s of the program, which includes demonstrating a constructive ”spirit of full disclosure” to clearly communicate its financial story and motivate potential users and user groups to read the CAFR.