Archive for Budget

COLLEGE SPENDS $17 MILLION DURING LAST FISCAL YEAR ON CAPITAL PROJECTS

Total expenditures 148.9% of budget with overrun due to Prescott Valley building expansion and Sedona Center remodel

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.

COLLEGE ENDS FISCAL YEAR WITH $2.5 MILLION SURPLUS IN GENERAL FUND

Surplus headed to capital fund for buildings; no new educational initiatives or other options for excess revenue discussed

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.

YAVAPAI COMMUNITY COLLEGE RECEIVES CERTIFICATE OF ACHIEVEMENT

Highest form of recognition in governmental accounting and financial reporting

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.

PRESCOTT VALLEY, YAVAPAI COLLEGE AND NAU END JOINT LANDLORD/TENANT EXPERIMENT

TOWN TO RETURN $3.75 MILLION PLUS AN ESTIMATED $600,000 IN INTEREST

Ten years ago Yavapai Community College loaned the town of Prescott Valley $3.75 million. The loan was intended to help finance construction of a town library and space for a college facility. The idea behind the loan appears to have been to entice Northern Arizona University to create an experimental three-year program  located in Prescott Valley. NAU wasn’t prepared to invest in the project. The Community College would be the landlord of the educational facilities portion of the library—about 12,000 square feet plus a 120 car parking area adjacent the library. (The library consisted of a total of about 55,000 square feet.)

The construction project proceeded and by September 2008 Yavapai Community College said it was offering to lease the Community College facility to NAU. (The property is often referred to as a “condominium.”) NAU leased the facility and classes began in 2010. Documents suggest that Yavapai College would offer lower division programs and curricula leading to associate degrees (and when appropriate, selected certification programs); and Northern Arizona University would provide upper division and graduate programs and curricula leading to baccalaureate and graduate degrees.”  

As a part of the initial agreement, if the relationship fell through at some point in the future the College could demand that the town of Prescott Valley return the $3.75 million plus interest. By 2016 the experiment in terms of joint sharing teaching responsibilities appears to have collapsed. The College administrators decided to end the relationship and ask for their money back. However, negotiations for return of the money did not receive formal Governing Board approval until the May 9, 2017 meeting. 

The College hopes to close the deal with Prescott Valley by June 30, 2017.

Under the agreement executed with the town of Prescott Valley, the College had the option of receiving either the fair market value of the facility or the $3.75 million investment plus interest. Because the market value of the facility was placed at $2 million, the College at the May meeting indicated it would ask return of the original loan of $3.75 million plus interest. The interest is estimated at $600,000.

It should be noted that as a part of the agreement between the University and the Community College there was to be an annual report made to the Governing Board. However, the Blog has not been able find any such report. The Blog also has not been able to identify the amount of money, if any, NAU paid to Yavapai Community College as a part of the lease agreement. Finally, because a portion of the original loan came from the 2000 $69.5 million General Bond issue, the returned money must be used for construction projects.  Dr. Ewell said it could be used for the ongoing Prescott Valley construction or for other projects in the District.

It is anticipated that NAU will construct its own facility or find more space in the not too distant future in Prescott Valley.  Other relationships with the Community College appear to be continuing.

The brief six-minute discussion between Dr. Ewell and the Governing Board about the return of the money can be reviewed in the video below.

County Property Taxes now provide 75% of Community College operating revenue

Data shows that 98% of revenue to support the general operations of the College come from property taxes and tuition

The Blog is often asked about the source of funding for Yavapai  Community College.  The table that follows shows where the revenue for 2017-2018 is coming from in dollars.  About 98 percent of the revenue comes from County property taxes and student tuition.

The following pie chart was presented to the public by the Community College at the recent budget hearing to explain in percentages where the revenue to operate the College came from. The chart omits secondary property taxes, which are used to pay off the 2000 $69.5 million General Obligation  Bond approved by voters in that year.

 

GOVERNING BOARD RUBBER STAMPS 2017-18 BUDGET

New Verde Representative falls in line with West County voting Bloc

The $82.75 million Yavapai Community College budget received typical rubber stamp approval from the District Governing Board at its May 9, 2017 meeting in Prescott.  The vote approving the budget was 4-1 with Deb McCasland casting the only “no” vote. 

Connie Harris

Connie Harris, the newly appointed representative from the Third District in the Verde Valley voted to approve the budget.  This was the first  time in four years a representative from the Third District had ignored the imbalance in funding  between the East and West sides of the County and approved the unfair allocation of funds. President Wills and the West County voting bloc were no doubt delighted with her vote.

Representative McCasland, whose district encompasses about half of the Verde Valley, opposed the budget because of its unfair allocation of resources among the residents of the County and the five percent tuition increase. Ms. McCasland has staunchly supported the residents  of the Valley since she was elected.

REVENUE SOARS DESPITE FALLING ENROLLMENT

STUDENT ENROLLMENT DECLINE NEARING 30%; $10.5 MILLION MORE REVENUE

This is the information the Governing Board will have Tuesday, May 9, 2017 when the five County representatives vote on the 2017-18 College budget. If history is any indicator, the Budget will be rubber stamped by at least the West County voting bloc.

1. The College will lose an estimated $330,000 in state aid because of the decline in the number of students taking accredited classes.

2. 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 because of the continuing decline in enrollment.

3. Property taxes will not be increased this year. This 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.)

4.Tuition will be increased by 5%. The Governing Board has increased tuition in some form every year over the last decade. The tuition increases have far outpaced inflation.

5. The new-construction tax will bring in about $680,000 in additional revenue to the College.

6.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 and is predicted to decline by 4% in 2017-18.

7. When comparing student tuition and fees 2008-09 to 2017-18 the College will be collecting $4,678,500 more in tuition and fees than it did almost a decade ago despite the huge drop in student enrollment. ($6,927,300 vs.  $11,605,800).

8. When comparing primary property tax revenue from 2008-09 to 2017-18 the College will be collecting $8,683,119 more in property taxes that it did in 2008-09. ($35,227,381 vs. $43,910,500.)

9. 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 state in total support. That is a difference of $2,781,900.

10. Overall, it appears that College has $10,579,719 more to spend that it did in 2008-09 and a student body taking accredited courses that has shrunk by almost 30%.

BOARD SET TO APPROVE $10.1 MILLION IN TOTAL CAPITAL EXPENDITURES

Awash with taxpayer revenue – Wills’ continues building/spending spreeeeeee

As the Blog has pointed out repeatedly, Yavapai Community College is awash with revenue to spend on construction, reconstruction, renovation, and upkeep. Based on the data furnished to the public on Friday, April 14, it is anticipated the Board will approve a total capital construction/maintenance/upkeep budget of more than $10.1 million at the Tuesday, April 18 meeting at the Rock House on the Prescott Campus.

The following is a breakdown of some of the $10.1 million the Board will authorize in the capital budget on Tuesday:

PRESCOTT CAMPUS: It is anticipated the Board will approve expending $2,596,000 on the Prescott Campus for new construction and renovation. This includes $600,000 for open space improvements that will be spent primarily on an outdoor amphitheater located between Buildings 3 and 4 that is scheduled to begin in July and conclude in August. It will also approve $3,487,500 on what it describes as capital preventive maintenance. This includes spending $825,000 on the baseball field and $275,000 on a breezeway. In total, the Board will most likely approve spending about $5.5 million on the Prescott Campus for capital construction, renovation, and upkeep.

PRESCOTT VALLEY: It is also anticipated the Board will approve spending $3,346,000 on construction and renovation on the Prescott Valley Center. It will also authorize $440,000 for Building 40 roof repair. This brings the total capital expenditures to $3,786,000 to be approved.

CTEC: The Career and Technical Education Center will be approved for spending  $31,500 on various projects.

SEDONA CENTER: The Board will authorize $1,345,000 to complete the renovation of the Sedona Center.

VERDE CAMPUS: The Board will authorize expending $100,000 for Building L Drainage & other maintenance projects.

CHINO VALLEY CENTER: The Board will authorize $55,000 for the Chino Valley Center for various maintenance projects.
The agenda with the budget data can be found by clicking here.

TENTATIVE 2017-18 CAPITAL BUDGET: WEST COUNTY $4.2 MILLION; EAST COUNTY $1.34 MILLION

Capital spending inequity between the east and west sides of Yavapai County continues

The College reviewed its tentative 2017-18 capital development budget with the District Governing Board on March 7, 2017. It appears that the Board will approve spending  a total of $5,547,000 on capital projects in 2017-18.

The revenue for the projects will come primarily from property taxes, Proposition 301 sales taxes, and income from investments. About 24% of the expenditure is on the East side of the County for the Sedona Center.  The remaining 76% will be spent on the Prescott Valley Center and improvements on the Prescott Campus.

Here is the breakdown:

  • Prescott – building one – visual arts phase 2:                      $304,500

  • Prescott – building 15 – arts/music design, construction  $1,692,400

  • Prescott – open space improvements –                                $320,000

  • Prescott Valley – renovation design, const.                          $1,086,000

  • Prescott Valley – land adjacent to building 40                     $460,000

  • Prescott Valley – building 40 – second floor                        $180,000

  • Sedona Center renovation and construction –                    $1,345,000

  • On-campus signage – campus unknown –                            $160,000

  • Total capital projects:                                                                 $5,547,900

The discussion during the District Governing board meeting on March 7, 2017 that focus specifically on capital development spending is reproduced below.

MCCASLAND ASKS: IS SPENDING $1.1 MILLION ON PUBLIC SERVICE A REASONABLE EXPENDITURE WHEN MONEY IS TIGHT?

Property taxes and tuition pay for about $500,000 in expense gap for various public service programs

Second District Representative Deb McCasland asked the Governing Board to reflect on expending $1.1 million dollars on public service projects, especially if the budget became “tight.”  She also asked that in light of the mandate to the Board that spending money on public service projects be “reasonable” that in the future it consider whether such a large expenditure that must be subsidized is reasonable.

Vice President Clint Ewell explained that public service programs that are being subsidized include the Regional Economic Development project, the Performing Arts Center, and other external non-student related projects.

The Governing Board discussion regarding the subsidy for public service may be viewed below.

 

 

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