On April 18, the Navajo County Community College Governing Board gave its OK to a preliminary budget of $32.6 million for Northland Pioneer College for fiscal year 2018.
Chief Business Officer Maderia Ellison introduced a $27.3 million general fund budget, and explained that expenses for the upcoming year include employee compensation costs totaling $18.2 million, which is an increase of $369,481 from fiscal year 2017. Some of the increases in employee compensation costs are the result of the increase in the minimum wage, changes to the Fair Labor Standards Act and healthcare costs. The board did approve a 1.5 percent salary increase to keep the college competitive in retaining qualified employees.
All other operating expenditures will total $9.1 million, which is up $463,554 from this year for a total increase of expenditures of $833,035.
The revenues necessary to pay these costs would come from a planned increase in the primary property tax, which is expected to be levied at the maximum rate, which is two percent higher than current year tax levy and will require a truth in taxation hearing. The proposed rate is $1.8067 per $100 net assessed valuation compared to the current rate of $1.7884. The tax will produce $14.8 million, which is $472,985 more than last year.
The college will also increase tuition by $2 per credit hour, adding $100,000 to the coffers, and state and equalization aid are expected to increase by approximately $633,600, although the State of Arizona has not finalized its budget.
Ellison noted that there is also an anticipated loss of grant funding totaling $300,000.
The unrestricted plant fund, or capital fund, shows an increase in State STEM (Science, Technology, Engineering and Mathematics) funding of $15,400, bringing state STEM aid up to $368,100. STEM funding will be used for capital equipment purchases. That added to an existing fund balance and transfers totaling $5 million bring the anticipated total unrestricted plant fund to nearly $5.4 million, resulting in a budget totaling $32.6 million.
In a discussion on the budget and what it entails, board member James Matteson noted, “We have an obligation to provide educational opportunities to all residents of Navajo County. We need to put money in the bank now for future shortfalls.”
He informed those present that the Arizona Tax Research Association (ATRA) projects a $1.6 million negative impact to NPC’s revenue when Arizona Public Service Co. decides to shut down Cholla Power Plant in Joseph City. “And any time the legislature is in session there’s no guarantee we will get our share of state operating aid or equalization funding,” he added.
Ellison noted that the expenditure limit will be breached in fiscal year 2018, but carry-forward balances will cover the excess.
In response to a question about institutional planning for future revenue reductions, Mark Vest, vice president for Learning and Student Services, noted the college would be presenting options to the board later this year that could require future budget reductions and possibly affect facilities, services and programs.
After the discussion the board approved the preliminary budget as it was presented.
Vest then reported on enrollment, stating that while other community colleges in the state have reported declining numbers, NPC has had increased enrollment in the last several semesters. “But we knew going into the 16-17 academic year there would be a likelihood of an enrollment decline,” he said, noting that decline was being driven by three primary factors. One is with the Department of Corrections, which has changed the way it now sends students to the college, cutting enrollment at the Winslow prison in half. A second is due to a change in the way curriculum is being delivered to Early Childhood students that has created a short-term decline for the next one to two years, cutting that enrollment in half. In addition, Vest noted, “A couple of faculty have gone on sabbatical this year and for the first time in a long time, we have about three key faculty positions that we have not filled,” he explained. In part, that is because the competition for highly qualified faculty has increased in some areas. Despite decreases in those areas, overall enrollment this spring compared to spring of 2016 shows a head count decline of 3.1 percent.
In other business, the board approved awarding a $115,564 contract to Pointe Construction to remodel the Financial Aid offices located in the Tawa Center at the Holbrook campus. Four bids were received for this project, with the bids ranging from $115,564 to $278,000.
The board also approved awarding a $97,000 contract to Navapache Construction to remodel the restrooms located in the Ponderosa Center at the Show Low campus. Five bids were received for this project, with bids ranging from $97,000 to $216,000.
