January 28, 2020 Audit/Finance Committee Meeting
The Audit/Finance Committee of the Board of Trustees of Illinois Valley Community College District No. 513 met at 4:30 p.m. on Tuesday, January 28, 2020 in the Board Room (C307) at Illinois Valley Community College.
Committee Members Physically Present:
Everett J. Solon, Committee Chair
Jay K. McCracken
Maureen O. Rebholz
Board Members Present:
Jane E. Goetz, Board Chair
Others Physically Present:
Jerry Corcoran, President
Cheryl Roelfsema, Vice President for Business Services and Finance
Deborah Anderson, Vice President for Academic Affairs
Mark Grzybowski, Vice President for Student Services
Bonnie Campbell, Associate Vice President for Academic Affairs
Fran Brolley, Director of Community Relations and Development
Kathy Ross, Controller
Mr. Solon called the meeting to order at 4:34 p.m.
THREE-YEAR FINANCIAL PLAN (FY2021 – FY2023)
Ms. Roelfsema presented the three-year financial plan covering the fiscal years 2021 through 2023. She informed that the financial plan is intended to provide a framework for the Board of Trustees and the administration to discuss the implications of major financial decisions. This three-year financial plan is part of the annual planning cycle that integrates the college’s strategic plan with the financial resources necessary to meet these strategic planning objectives. The major operating funds of the college consist of the Education Fund and the Operation and Maintenance Fund. The major sources of revenue for these funds consist of property taxes, tuition and state funding. In comparison of similar-sized Illinois community colleges, based on the most recent information available, Illinois Valley has the third lowest total levy rate and the third lowest rate for operating and equity levies, tied with Kankakee and Lewis & Clark. In 2019 the equalization tax for Illinois Valley was lowered to .1205, however, the levy request was based on an estimate rate of .1180. The operating levy is .13 for the Education Fund and .04 for the Operations and Maintenance Fund. The equity levy (equalization tax) allows IVCC to levy for a total of .2912, the average rate for operating funds of Illinois community colleges. Enrollment growth is not projected to increase for FY2021 or FY2022 with only a one percent increase in FY2023. Credit hours are projected at 51,000. The FY2020 budgeted credit hours were 53,000 and the actual credit hours for FY2019 were 51,645. The state base operating grant is based on credit hours earned two years prior to the current year, multiplied by the current year reimbursement rate. The decreasing number of credit hours would have had a more detrimental effect if not for the fact that nearly all the Illinois community colleges experienced a similar decrease in credit hours. In this plan tuition and fees are held at FY2018 rates and increased by slightly over two percent for FY2022 and FY2023. For the operating funds, the largest expenditures are for personnel costs. In FY2019 personnel costs represented 80 percent of the total operating expenditures of the college. Benefits are projected with a slightly less than five percent annual increase for the three-year projection. The health insurance rates for calendar year 2020 increased by 2.5 percent. The college joined the Community College Health Insurance Consortium (CCHC) on January 1, 2017 after belonging to the Community College Insurance Consortium (CCIC) for 13 years. The CCHC has a larger pool of employees and is better able to spread the costs. Over the next three years, contractual services, materials and supplies, and travel are projected with a two percent annual increase. Fixed costs which include the Ottawa Center rent and the Truck Driver Training leases are projected at no increase during this three-year period. The Ottawa Center lease agreement expires June 30, 2020 and the current annual lease payment is $132,000. (Note: This amount was corrected to reflect an annual lease payment of $115,500.) The five-year lease for truck driver training equipment will expire in January 2021. The Auxiliary Enterprise Fund will continue to have annual deficits as changes to the way that students obtain textbooks is a challenge for the college bookstore. Ms. Roelfsema noted that the college has a practice of a balanced operating budget which is defined as a budget where revenues are greater than or equal to expenditures and one time revenues are not used for operational expenditures. The college maintains a working cash fund of $4.5 million to be used to pay expenses when awaiting property tax receipts or state funding. Board Policy requires 25 percent of annual operating expenses for a fund balance in operating funds. At the end of FY2019 the Operating Fund balance was 61 percent of annual expenditures. In conclusion, Ms. Roelfsema informed that the major sources of revenue – property taxes, tuition and fees, and state funding – are expected to increase only slightly in the next three years. With these limited resources, Ms. Roelfsema noted the importance of the Board, faculty and staff to continue working together in order to maintain the college’s reputation as a high-quality teaching and learning institution.
TUITION UPDATE & DUAL CREDIT/DUAL ENROLLMENT TUITION FEE STRUCTURE
Ms. Roelfsema informed that the administration is recommending no tuition increase at Illinois Valley Community College in 2020-2021. This is the second straight year that the administration is recommending no tuition increase. Dr. Corcoran added that at the February Board meeting the full Board will consider a plan to freeze for the third consecutive year the combined tuition and universal fee at $133 per credit hour for 2020-2021. The proposed rate currently places IVCC among ten other colleges in its peer group: Black Hawk, Heartland, Highland, Kankakee, Kishwaukee, Lake Land, Lewis & Clark, John A. Logan, Richland and Sauk Valley. Average 2020 tuition and fees for the group is $136 per credit hour while the state average for all 39 community colleges is $147. Mr. Solon had inquired about the tuition rate at Black Hawk and Joliet Jr. colleges. As a follow-up, Dr. Corcoran informed that Black Hawk is at $149 per credit hour (all tuition with no universal fee) and Joliet is at $148 ($113 for tuition and $35 for fees).
Dr. Anderson proposed that IVCC consider the following pricing structure for dual credit/dual enrollment courses.
- Institute a flat fee of $30 per course for courses taught at the high school by a qualified high school instructor.
- Maintain the current 75 percent of tuition rate for courses taught at high schools by IVCC instructors.
- Reduce on-campus rate to 75 percent of tuition rate. Maintain the current online rate of 75 percent of tuition rate. Therefore, dual credit/dual enrollment courses taught at the college including online courses would be at 75 percent of the current tuition rate.
- Maintain the Free and Reduced Lunch discount ($5 registration fee only).
- Maintain the 30 for 30 discount. (Students with 30 credit hours through dual credit/dual enrollment are eligible to take another 30 credit hours at a reduced tuition rate.)
- Maintain $500 annual payment to high schools to help defray administrative costs.
Dr. Anderson proposed that instead of specifying courses for high school student enrollment, the college move toward opening the schedule for dual credit/dual enrollment students and allow these students to enroll in any course that they choose. Dr. Anderson suggested that we re-brand our efforts with the goal of eliminating the confusion between the Transfer Academy and the College and Career Start programs. She recommended that we use the College and Career Start labels to provide consistency. Mr. McCracken expressed support of this recommendation as the dual credit/dual enrollment opportunities would be uniform and clearer for high school students, parents and the administration. Mr. McCracken noted that the dual credit/dual enrollment rates presented are fair and provide a win-win situation for all involved. The committee recommended that the tuition update and the dual credit/dual enrollment tuition fee structure be shared with the full Board.
Course fees are reviewed annually by program coordinators and deans using approved course fee guidelines. Ms. Campbell noted that we currently have 374 active courses with approved course fees. The recommendation is to change 77 course fees for FY2021: 60 increases, 11 new courses, 1 decrease, plus the assignment of a course fee to 5 existing courses. A list of 77 courses were reviewed by the committee members. Ms. Campbell informed that some courses have additional fees because of consumables, software needed, guest speakers and materials unique to the course. Mr. Grzybowski informed that the SGA met January 23 and reviewed the dual credit/dual enrollment tuition rates and the course fee adjustments. Mr. Grzybowski reported that the SGA was appreciative of the information, supportive of both the proposed rates and course fee adjustments and provided positive feedback. The committee recommended that the fee changes and adjustments be presented to the whole Board.
The proposed FY2020 budget for 42 active student organizations were presented for committee review. The proposed allocation is $102,914, down from $129,689 in 2017-18 and $112,604 in 2018-19. Dr. Corcoran noted that the FY2020 Student Organization Budgets will be presented as an information item at the February Board meeting.
Dr. Corcoran informed that Mayor Aussem has confirmed that it is the City of Ottawa’s plan to continue with the partnership that is in place for leasing the Ottawa Center. Mayor Aussem was supportive and positive about moving forward with continuing the lease, which is due to expire June 30. Dr. Corcoran added that we view the Ottawa Center as an asset to the community with its numerous functions such as: 1) a service center for students seeking academic counseling, financial aid, class enrollment and paying tuition; 2) an adult education delivery site; 3) continuing education classes location; 4) ROE high school completion program coursework destination; 5) Transfer Academy site; and 6) an extension site for launching our Prior Learning Assessment initiative. Dr. Rebholz commented that the Ottawa Center is a tremendous benefit to the eastern part of our district.
Mr. Solon declared the meeting adjourned at 5:10 p.m.