Below is a message I sent the College community on May 12:
This is truly an exciting time at Pima Community College. On Wednesday evening, our Governing Board directed us to move forward with significant, wide-ranging initiatives that have the potential to reshape PCC so that we can best serve our community for years — and in some cases, decades — to come.
Let’s start with the budget. Last night, the Board approved key budget parameters that put the final pieces in place for Fiscal Year 2018. We can now move forward with publication of the budget and Truth in Taxation notices for public review. The budget will ultimately be adopted in June following the public hearing and special Board meeting.
The Board, in recognition of the great work by employees during these challenging times, directed the College to provide a 2 percent incremental increase to salaries and wages. Assuming formal approval by the Board in June, this increase will be calculated on base pay amounts throughout the year. While it is not technically an increase to base pay, the amount will be essentially the same. Its continuance will be decided next year when we have more information from a class and compensation study the Board on Wednesday night directed the College to undertake, and how the organization is doing in relation to its strategic and operational goals.
The Board’s direction is an echo of my heartfelt thanks to our employees, whose grit and creativity put us back in good standing with our accreditor. Specifically, I want to thank you all for your feedback, questions, suggestions, and patience throughout this dynamic budget scenario and development period. We are clearly rebuilding the plane as we are flying it — we are incorporating strategic and organizational changes within the budget structures to facilitate changes necessary for us to become a premier community college.
The big picture: challenges
To reach that goal, we are working diligently on fiscal and operational challenges connected with declining enrollment — our infrastructure is misaligned, particularly in terms of our physical structure and the number of people we employ. We have been discussing and working on this for several years, and have made very real progress by, among other things:
- implementing the College reorganization;
- reducing the size of the administration;
- setting target ratios that guide the authorization to fill full-time faculty positions;
- adjusting tuition and other service delivery to ensure we are market-competitive;
- reducing equipment purchases that are subject to expenditure limitation;
- improving classroom funding models consistent with the new organization;
- scrutinizing every staff position prior to recruitment, and establishing unit-based budget reduction targets.
That said, our current enrollment results in a very real need to significantly reduce our operational expenses due to looming expenditure limitation realities. The good news is we have some time to adjust to the reduction; the bad news is that reductions are a certainty we must address.
The big picture: opportunities
At the same time, the College is undergoing a strategic renewal, as evidenced by the Board’s actions Wednesday night:
- Approving three strategic directions contained in the final draft of the 2017-2021 Strategic Plan;
- Committing the College to the goal of ensuring that 60 percent of Pima County residents age 25 and older have a certificate or college degree by 2030, aligning us with Governor Doug Ducey’s Achieve60AZ initiative;
- Approving conceptual Educational and Facilities Master Plans, which provide a vision for where we need to go as an organization. Ensuring program quality, relevance, and sustainability; implementing effective pathways to student success; establishing Centers of Excellence; and expanding and integrating our outreach efforts create an array of exciting possibilities to focus on. The plans also clarify the need to reinvest into the College to improve program and service delivery, educational space, and equipment.
A healthy, balanced budget
When we originally developed the budget scenarios back in December, it was with these challenges and opportunities in mind. The feedback we received from our forums and feedback tools indicate that the College community understands the need to resize and reinvest. Approximately 95 percent of the responses we received supported either Scenarios B or C, which trigger budget reductions and reinvestment starting in FY 2018.
The budget that the Board approved for publication includes a healthy balance of these conceptual and strategic changes. Specifically, the budget includes the reduction of 100 vacant staff positions (approximately $6.3 million), the inclusion of $3.6 million in revenue bond debt service, an increase in property taxes to the levy maximum (approximately 3 percent), and direction to fund enhanced enrollment initiatives (i.e., marketing, retention efforts) and the aforementioned class and compensation study.
No reduction in force in FY 2018
The reduction of 100 positions will be achieved through the elimination of existing vacant staff positions. Approximately 40 positions have already been identified for elimination, and 60 additional positions will be identified during the course of the year. The Executive Leadership Team will develop a new process for reviewing all vacant staff positions, and only critical positions will be approved for recruitment. As a result of this strategy, the College does not expect a Reduction in Force during Fiscal Year 2018. However, this approach will require all of us to be more flexible with how and where we perform our duties, and there will be active and constructive discussion about how to more efficiently provide necessary services with fewer people.
Lastly, the revenue bond debt service of $3.6 million will enable the College to have an infusion of approximately $45 million to take a major first step toward the implementation of the Educational and Facilities Master Plans. The specific projects will be identified in coming months through a series of summits and discussions, and the actual process of issuing debt will require Board action. The revenue bond will enable us to make significant progress toward consolidating programs and creating our new Centers of Excellence.
I mentioned that the budget was predicated on foundational assumptions that include financial and operational metrics, and the budget makes good progress toward our upcoming expenditure limitation. A commitment toward increasing enrollment will focus our energies on specific initiatives and tangible gains, and decrease the amount we will eventually have to reduce by 2021. The proposed Fiscal Year 2018 budget contributes more than $5 million of progress on our expenditure limitation, which is within our targeted Scenario B goal.
A final word
When he was CEO of Intel Corp., Andy Grove coined the term “strategic inflection point,” defined as that which causes a fundamental change in an organization’s strategy. With our accreditation challenges behind us, and with fascinating new initiatives ahead, it’s clear we are pivoting toward a brighter future. Working together, we can reimagine PCC for the benefit of our students and community.