April 18, 2016 Minutes for Audit/Finance Committee Meeting

The Audit/Finance Committee of the Board of Trustees of Illinois Valley Community College District No. 513 met at 4 p.m. on Monday, April 18, 2016 in the Board Room (C307) at Illinois Valley Community College.

Committee Members Physically Present

Larry D. Huffman, Chair
Jane E. Goetz

Committee Members Absent

Everett J. Solon

Others Physically Present

Jerry Corcoran, President
Cheryl Roelfsema, Vice President for Business Services and Finance
Deborah Anderson, Vice President for Academic Affairs
Sue Isermann, Associate Vice President for Academic Affairs
Kathy Ross, Controller
Renee Prine, Counselor
Vince Brolley, Instructor
Stephen Alvin, Instructor

The meeting was called to order at 4 p.m. by Dr. Huffman.

FY2017 BUDGET ASSUMPTIONS

Budget officers had a deadline of April 18 to have their FY2017 budget information to the accounting office.  This information will be compiled and the budget council will meet on Wednesday, May 4 to prepare a balanced operating budget.  There has been no update on property tax revenues since the last Audit/Finance meeting in February.  The credit hours are projected to remain at FY2015 levels.  Spring enrollments are leveled off and the decline has seemed to slow.  State funding is based on 75 percent of the FY2015 appropriation.  The budget is to be prepared with annual salary increases averaging 2.0 percent.  The previous financial plan projected seven retirements, but eight retirements have been received – six full-time and two part-time employees.  Four of the full-time employees are being replaced and two positions are going to the budget council for discussion.  One part-time position will not be filled and the other position is going to the budget council for consideration to make this a full-time position.  There is one additional position, the agriculture program coordinator/instructor.  Benefits are projected to increase by 8.0 percent.  The administration continues to look for other health care solutions including moving to another health insurance cooperative.  Professional development will be budgeted at $111,000.  Capital expenditures are projected at $200,000 to $300,000.  This will cover upgrades to Information Technology infrastructure and minor facility upgrades.  Information Technology and Learning Technology departments have approximately $400,000 in reserve funds to spend for special projects.  The Protection, Health, and Safety levy will cover the costs to replace air handlers and chillers in Buildings B and D.  A $10,000 match for Project Success is included in each year of the forecast.  If the FY2016 state funding is 75 percent of FY2015 levels and the MAP grants are not funded, this is a loss of $1.2 million in revenue for IVCC.  As of June 30, 2015, the College had $2.1 million in operating reserves above the required 25 percent required by board policy. These excess reserves can be used to cover any deficits caused by the lack of state funding for FY2016 and possibly for FY2017.  After that the College will not have any reserves above the 25 percent.  Budgets have been reduced and the only line items that can be reduced are salaries and benefits.  If the College borrows from the $4.5 million working cash fund, a plan to restore those funds within one year must be developed and followed.  If it is not repaid, the entire working cash fund is abolished.  The College may need to use working cash for cash flow purposes until the 2016 tax payments are received.  With the low commodity prices, the value of farm land may be declining.  Farm land is 16 percent of IVCC’s EAV.  Dr. Corcoran noted that IVCC has been fortunate compared to what information has been received from across the State.  Dr. Corcoran attributes this to Cheryl Roelfsema and the Board’s insistence of reserves.

REQUEST FOR PROPOSAL RESULTS – BANKING SERVICES

Three proposals were received.  Centrue Bank offered the best interest rate, a nearby location and a wide range of services.  Illini State Bank has the lowest fees, a nearby location, did not offer all of the services, but did offer an interactive website.  Illini State Bank does not guarantee its interest rate.  First Midwest offered a wide range of services, the lowest interest rate, the highest fees, and its locations are approximately 25 miles from campus.  The recommendation of Centrue Bank will be presented to the full Board.

DEPARTMENT OF LABOR CHANGES TO OVERTIME RULES

The Department of Labor is expected to issue final regulations in early July modifying the current Fair Labor Standards Act overtime rules for salaried workers.  The new regulations could go into effect as early as September 1, 2016.  This could mean an additional $30,000 in expenditures for the budget. 

DUAL CREDIT PROGRAM ENHANCEMENTS

Two options to enhance the dual credit program are being considered.  If students qualify for the free or reduced lunch program at their school, the tuition could be waived if the courses are taught by a high school instructor.  If the course is taught by an IVCC instructor, tuition would be free up to course capacity.  This would not have any economic consequences but could increase enrollments and provide an opportunity to economically-disadvantaged students.  It could incentivize the students to pursue their education at IVCC.  Thirty-five percent of dual credit students pursue their education at IVCC.  For courses taught by high school teachers, the high schools were reimbursed per course.  The payment to the high schools was required by the ICCB to qualify for reimbursement.  Since the start of the program, ICCB has dropped this requirement and the administration will work with each high school over the next two to three years to phase out these payments.  The other option is for high school students who complete 30 credit hours of dual credit courses in high school could enroll at IVCC in the summer or fall semester following high school graduation and continue to get the reduced tuition for another 30 credit hours.  Universal fees would be charged.  It is estimated that approximately 20 students per year could qualify for this offer.  Completion of a FAFSA would be a requirement to enroll at IVCC.  If the student qualifies for financial aid, the tuition would be paid by Pell or MAP first.  It was suggested to gather information from the schools as to how many received dual credit courses free and how many of them enrolled at IVCC.  It was also suggested to conduct a survey as to the number of free and reduced lunch students would enroll in dual credit courses.  The administration will continue to work with the high schools to discuss the options and transition into it. There will be another Audit/Finance Committee meeting before the tentative budget is prepared to discuss the options further.