TO: College Community
FROM: Stephen Curtis
DATE:
SUBJECT: Budget Update
In recent weeks I have been asked
on a number of occasions about this fall’s enrollment and about related budget
implications. Here are some general
observations concerning those issues.
In my opening address for our fall
Professional Development Week, I noted the decline in student enrollment that
we are experiencing for the third consecutive term (Spring 2005, Summer 2005, Fall 2005).
The principal factor in our enrollment trend is the state of the
economy. As the economy has begun to
strengthen and unemployment has stabilized or even decreased, many of our
students choose jobs rather than education as their primary focus. This trend is apparent across the country,
including at a number of our sister community colleges in
There have been other factors that
have affected the fall enrollment as well:
tighter financial aid processes that discourage last-minute aid
applications (and therefore some immediate enrollment); Banner implementation issues
and some systems processes that should be smoother in succeeding semesters; and
planned reduction in adult literacy program enrollments, driven in part by a
desire to improve student outcomes and in part by state funding formula changes
that no longer allow for direct financial support of these programs.
The result, this fall, has been a 13
percent decrease in FTE enrollment compared with fall of last year. Put another way, we ran 264 fewer credit sections
this fall than in Fall 2004 and fewer sections in our non-credit literacy
programs as well. This decrease in
enrollment has had a definite effect on our current year’s budget.
First, the good
news. The new state funding
formula is basically a lump sum allocation that we now receive in full, even if
enrollment goes down. So the formula
essentially holds us harmless in a period of reduced enrollment.
Now the bad news. Because our operating support has relied
increasingly on student tuition and fees in recent years (54 percent of this
year’s operating budget), this fall’s decline in enrollment has meant a loss of
about $6.5 million in tuition/fee revenue.
The administration reported to the
Board of Trustees in October that the College’s budget currently reflects a $1.8
million deficit. We have frozen seven
administrative line vacancies for this fiscal year; are delaying the filling of
additional lines; have implemented reductions in supplies, hospitality and
travel; and have reduced budgets in other expense categories where savings are possible. We also know that we face challenges in the
rising cost of utilities and insurance, and we are working to control these
costs to the extent possible.
Some of these steps, however,
inhibit potential revenue efforts and therefore are not long term solutions. As one example, our commitment to moving
toward a
The next hurdle is the Spring 2006 enrollment.
Our budget assumes an increase in FTEs (560) this spring over the actual
fall enrollment we have currently achieved.
If that spring projection holds and other revenue-generating initiatives
are successful, we’ll be in a stronger position for putting the budget back in
balance. If we fall short of the
budgeted spring FTE number, the additional revenue loss will add to the
projected deficit and make it far less certain that we can balance the budget. The same will hold true for Summer I
enrollment, which is included in this fiscal year.
One of the lessons learned from
this semester’s experience centers on the importance of enrollment for the
fiscal health of the College. In years
past, consistent enrollment was the key to financial stability because the
State reimbursed us for the number of students taught. While the State formula is no longer
primarily enrollment-driven, the high percentage of the operating budget that
is supported by tuition and fees still makes us very much dependent upon stable
enrollment. Our enrollment management
efforts, then, will continue to be a high priority for all of us at the
College.
There are steps that each of us can
take to mitigate the impact of an enrollment decline. First, encourage continuing students to
register early and pay on time for the spring semester. Continuing students form the largest part of
our spring enrollment.
Second, participate fully in
retention efforts that are evolving across the College. All faculty can commit to early assessment of
student progress in every class, thus allowing for early intervention, as
appropriate. As we pilot an academic
early warning system, full participation by the departments involved will help
us refine the system and provide additional support to students.
Third, support registration
activities. We have worked hard to improve
all processes related to student registration.
Help students navigate the system.
Call to your supervisor’s attention areas where we can continue to
improve the process.
Fourth, conserve utilities. Two years ago we emphasized energy savings
through the shutting off of lights in offices and classrooms and of computer
terminals, when not in use. The College
saved about $67,000 through that effort in 2003-04. These remain effective ways to save some
thousands of dollars.
As I have done for the last two
years, I shall continue to update you on our budget situation on a regular
basis. I appreciate the actions taken by
members of the College community in the past to strengthen the institution; and
I am confident that our combined efforts can make a significant, positive
difference as we move forward.