The Maricopa County Community College District will not raise tuition and property taxes, even though a new state budget eliminates virtually all state funding for the district’s 10 community colleges. But hiring more full-time faculty may be put on hold.
The Yavapai Community College Governing Board voted 3-2 to increase tuition next year by four percent. Without the increase, the College might have to cut out $400,000 of its $111 million dollar Master Plan construction plans. (No student voices were heard at the Governing meeting.) It also intends to raise dormitory rates by about 3 percent.
Voting against the tuition increase was East County Representative Al Filardo, who was not convinced the College had made a proper supporting case for it. Also voting against the increase was second 
district East/West County representative Deb McCasland. Ms. McCasland was concerned about the impact on students and the massive expenditures going out of the General Fund for the Master Plan. The General Fund revenue comes from County taxpayer property taxes and student tuition.
Two factors driving Administrators to push tuition higher are the need to finance the $111 million dollar Master Plan and their five-year failure to increase enrollment. Over 90% of the Master Plan is going to develop the College on the West side of the County.
In January, 2015 the Administration reported that tuition and fees would be $150,000 under budget for the fiscal year because of “lower than projected enrollments.” The College estimated in January, 2015 that it would take in only $11,717,000.00 in tuition and fees along with about $44 million in tax revenue.
A year ago in-state student tuition for 2014-15 was increased by the Governing Board on recommendation of the Administration as follows:
• Tier 1: +$2 from $70 to $72
• Tier 2: +$5 from $78 to $83
• Tier 3: +$5 from $87 to $92
• $360k increase (3.2%).
The total increase for 2015-16 will be 4%.
Tier 1: + $3 from $72 to $75 (4.2%)
Tier 2: +3 from $83 to $86 (3.6%)
Tier 3: +3 from $92 to $96 (4.3%).
In addition, several new and existing courses will have tuition set at what the College describes as “market rates.”
Long-time West County Board members Ray Sigafoos and Pat McCarver led the fight for higher tuition. They have voted to increase student tuition for the past several years. Newcomer Steve Irwin, who represents Prescott Valley, voted for the first time to increase tuition.
In 2004/05 the per hour tuition was $38. It has been increased every year since then. Click on the following to read the details of the tuition increase. Tuition and Fees _ FY 15-16_r1
Many Verde Valley residents are confused over how the Community College raises money for projects by selling bonds. At the February Governing Board meeting, Vice President Clint Ewell outlined the different bonds the College now uses. He said there are three types of bonds. They are: General Obligation bonds, Pledged Revenue Obligation bonds, and Revenue bonds.
The General Obligation bonds are approved by voters and used for capital projects. The last time voters in Yavapai County approved General Obligation bonds was in the year 2000 when they approved issuance of $69.5 million dollars in bonds for the Community College.
Rather than seek voter approval for bonds to support a capital project, College administrators with Governing Board approval can issue “Pledged Revenue Obligation bonds. In the annual financial report issued in June, 2014 the College explained that it used this process in April 2011 when the Community College District issued $14,000,000 of pledged revenue obligations. The $14,000,000 was used to prepay a capital lease and $9,435,487 was used to construct the Prescott Chiller Water Plant and Clarkdale Central Plant. According to the June, 2014 Community College Financial Report, “Pledged revenue obligations and revenue bonds are repaid from tuition, fees, rentals, and other charges to students, faculty, and others.”
When it came to financing most of the $7 million dollars to renovate two of the student residence halls on the Prescott campus, the Administration with agreement of the Governing Board issued $5 million dollars in Revenue bonds to pay for construction. This process also avoided asking for voter approval of the project. According to the June, 2014 Community College Financial Report, “revenue bonds are repaid from tuition, fees, rentals, and other charges to students, faculty, and others.”
The Chair of the Governing Board theorized that this process seemed like a fair one when it came to the student residence halls. Under this theory, the user pays for the construction. The problem is that the user don’t pay enough in annual annual rental fees to cover the principal and interest. Therefore, the facilities must be subsidized at least in part by student tuition. The result is that thousands of students who pay tuition never use the residence halls but nevertheless pay for their construction.
In a statement in the June, 2014 Financial Report, the Community College stated the following: “Annual principal and interest payments on the pledged revenue obligations and bonds are expected to require less than 17.2% of tuition, fees, dormitory rentals, and bookstore income. In the current year, total revenues of $10,751,131 were pledged to cover the principal and interest paid of $1,846,981.” [Video to follow when available.]
The Community College has looked to student tuition to help repay leases and issuance of what are described as pledged revenue obligations relating to issuance of revenue bonds without requiring voter input. The Blog has been unable to discover a tuition use policy for the College, something some Colleges have created.
According to data in the 2014 Annual Financial Report that was just released, in April 2011, the District issued $14,000,000 of pledged revenue obligations, which are backed in part by student tuition. The $14,000,000 was used to prepay a capital lease and $9,435,487 was used to construct the Prescott Chiller Water Plant and Clarkdale Central Plant.
On June 13, 2013, the District issued $5,000,000 of revenue bonds to construct, renovate, furnish and equip the residence halls on the Prescott Campus and to make related site improvements.
The District has pledged future tuition, fees, dormitory rentals, bookstore income and other charges to students, faculty and others to repay the pledged revenue obligations and the June 2013 revenue bonds. The pledged revenue obligations and revenue bonds are payable solely from these revenue sources.
The 2014 Annual Financial Report states that annual principal and interest payments on the pledged revenue obligations and bonds are expected to require around 17.2% of tuition, fees, dormitory rentals, and bookstore income. In 2014, total revenues of $10,751,131 were pledged to cover the principal and interest paid of $1,846,981.
The Blog takes the view that student tuition should not be used for capital projects absent a written policy made with the agreement of students. As noted above, the Blog was not able to find such a policy at Yavapai Community College. You may view the latest Annual Report (scroll down to page 37) containing these items by clicking here.