Governing Board Modifies past budget but provides County property taxpayers no relief

It is hard to believe that the College over budgeted in the fiscal year 2015-16 by ten million dollars. However, that is what it reported to the Governing Board at its January meeting. In the agenda for that meeting, the College reported in writing it did not spend $3.9 million of its 2015-2016 budget. However, that figure exploded without explanation to $10 million during the College’s presentation to the Board.

Apparently, the College didn’t need the 2015-16 revenue (but said nothing about this during 2015-16) because: (a) It failed to quickly fill employee vacancies during that period, (b) Contingency revenue was not needed, and (c) It had already spent money in 2014-15 for a number of construction projects that were completed or partially completed in that fiscal year but showed up in the 2015-16 budget.

A short three minute edited videotape of the discussion at the Board meeting in January  follows below.

College has $23 million in reserves; didn’t spend over $2 million in general fund money

The year-end report given to the District Governing Board at the August 9, 2016 meeting confirmed the College ended the year with huge reserves and excess general revenue.  According to the data furnished the Board, the College had $11.457 million in the Plant Fund Reserve fund; $12 million in the Educational and General and Auxiliary Fund reserve), and $2 million in unspent revenue in the General Fund budget.

Following below are the graphs produced by the College showing the reserve amounts and the statement regarding the net revenue surplus issued by the College.

Reports that it now employs 564 employees using a full-time equivalent basis 

Yavapai College is now the tenth largest employer in Yavapai County.  In a February, 2016  report given to the Governing Board, there was the equivalent of 564 full-time employees working for the College.

It has become a major economic engine on the West side of the County and is pumping millions of dollars into the economy over there.  

Alth0ugh the College has not released the data, it is estimated that from 85 to 90 percent of the full-time employees work on the campuses located on the West side of the County.

$3 Million for Soccer field; $5 Million for Events Center

The Wills’ administration has included in its most recent five-year capital development plan expenditures of at least $3 million for a “multi-use field” and $5 million for an Events Center.  There is no suggestion that the College “needs” to expend this money.  It is simply a “want” and the Wills’ folks have their hands on the money. They don’t know where else to use all this  money other than to put it into more and more buildings and athletic fields.

Vice President Clint Ewell tried to justify the multi-use field at the February 9 Boar meeting as necessary to hold graduation ceremonies.  This, of course, is nothing more than an effort to disguise the real reason the College wants this field, which is for its soccer team.  The College now leases two soccer fields: one in Prescott and the other in Prescott Valley. 

As further proof of the deception, one needs only to look at phase one of the Master Plan where you find the following:  “Multi-Purpose Field with Locker Rooms and Concessions.”  This is consistent with the real plans to build a field for the soccer team—something Wills’ has publicly supported.

Apparently, the subsidized Perform Arts Dinner theatre, with 1,000 seats is not a sufficient venue for special events, at least in the eyes of the Wills’ administration.  It intends to spend another $5 million on a new facility.

Board representative Deb McCasland pointed out that the baseball field was originally created out of a grant that promised it would be a “multi-use field.”  President Wills’ made no response to that statement at the Board meeting. 

Another reason property tax increase was not warranted

Thanks to Board Representative Deb McCasland, we now know much more about where the College is getting all the money to fund its multi-million dollar building program.  The newest discovery of a source of revenue came during the February 9 District Governing Board meeting. At that meeting Ms. McCasland was unwilling to let a resolution transferring almost $2.9 million from the general revenue fund to the Capital Accumulation account as a part of the “consent agenda”  pass without question.  Consent agenda items are usually approved without discussion and Ms. McCasland asked that this item be pulled from the consent agenda. The Capital Accumulation account is used to pay for construction projects.

While questioning Vice President Clint Ewell, Ms. McCasland discovered that the policy of the current administration, and one followed for at least the last seven years, is to take any budgeted but unspent year-end revenue in the General Fund and put it into the Capital Accumulation account, where it is used for capital projects. 

The fact that there was $2.9 million excess revenue not needed to meet items in the 2014-15 general budget was not disclosed to the Governing Board in June, 2015 when the College administration asked for a property tax increase.  Had it been disclosed, or a reasonable estimate of the unspent revenue provided the Governing Board, it is hard to believe that the three-member West County block of representatives would have supported the request to increase taxes.

The brief discussion in response to Ms. McCasland’s inquiry can be viewed by clicking here.

Huge reserves well above lines set by Governing Board—College awash in money

The College reported at its December, 2015 meeting that it now has in its Educational & General and Auxiliary Fund Reserve $16 million.  This is $11 more than is required by the Governing Board.  (The following chart was produced by the College.)

The College also reported that it had $9 million in reserves in its Plant Fund Reserve account.  As of November 30, 2015, Plant Fund reserves exceed the Governing Board’s designated reserve amount by $7,760,000.

Removing accounting line item this year, which once showed PAC loses, raises additional issues of trust

The Blog investigates

The Blog was shocked when the Community College, in direct response to a question from Sedona Councilor Scott Jablow at the City Council meeting October 27, 2015,  the College stated that in the last year the PAC subsidy was “about $70,000.”   You may view the exchange between the two by clicking here.  

What the Blog discovered in documented losses

The Blog began to dig through public reporting records from 2012 to November, 2015 to discover how the huge reported subsidy had dropped so dramatically.  What the Blog found did not answer the question of why the dramatic drop occurred, if it did.  What it did discover raises troubling issues of trust.

Huge loses reported for three consecutive years. For example, the College reported PAC losses in June, 2013 of $649,000, June, 2014 of $680,000 and estimated in a budget in April, 2014 loses of $585,000.  (All of the College reports are reproduced below.) Those losses would have to be subsidized. 

Wills’ explains losses. The Blog also discovered that the reason for the losses, as explained by President Penelope Wills to the Governing Board, was the following: “For the PAC, the net profit on shows and related food/beverage operations has been below projections.” (March, 2014). “Overall, the Auxiliary Fund, which was budgeted to break-even, is expected to have a deficit. This is due to Food Services (meal plans) and the Performing Arts Center having larger losses than projected.” (April, 2014).

McCasland questions. The Blog found that once  Deb McCasland was elected to the Governing Board, she began asking questions about the operation of the Performing Arts Center.  She was extremely knowledgeable because as a former Yavapai College employee, she was in charge of the programs at the Center. 

Curtain of secrecy dropped on PAC accounting line item. The Blog also found that the curtain on monthly reports of losses for the PAC was pulled down in July, 2014 by the College. It did this by simply eliminating from the monthly report the PAC line item.  This effectively removed from public view the losses that were being incurred and effectively removed the item for discussion by the Governing Board. 

Demand an independent audit. The Blog believes that Yavapai County Taxpayers cannot trust the College to provide detailed accurate information about the PAC losses, which are subsidized by taxpayers.  It believes that taxpayers should demand an independent outside audit to determine the nature and extent of taxpayer subsidy to this project. 

The following chart, which was prepared by the Blog, is based are the reports taken directly from public Yavapai Community College records.

The following are reports taken from College documents over the last three years verifying the losses stated above.

The new method of reporting auxiliaries–no PAC line item.