Tag Archives: budget

PCC adopts Fiscal Year 2017-2018 budget

Below is information for the community and the media regarding the College’s finances:

Pima Community College’s Governing Board voted June 14 to approve the College’s fiscal year 2017-2018 budget of $246.1 million, a decrease of approximately $1.7 million, or 0.7 percent, when compared to the current year’s budget of $247.8 million.

The 2017-2018 budget reflects significant progress toward aligning the budget with the priorities of the 2017-2021 College Strategic Plan, as well as the initial stages for implementation of the College’s Educational and Facilities Master Plans. Additionally, the College’s budget takes into consideration enrollment, revenue, and anticipated expenditure limitation concerns through the reduction of more than 100 vacant staff positions, decreasing personnel expenditures by more than $6.0 million.

Since December 2016, the Governing Board has been actively engaged with College administration and the community in preparation for the development and adoption of the 2017-2018 budget. The approved budget includes a 2.5 percent increase to wages and salaries for the fiscal year, as well as an additional $0.5 million allocation for enrollment services and marketing initiatives.

The adopted primary tax levy change will increase the primary tax rate from the levy neutral rate of $1.3484 to a rate of $1.3890 per $100 of assessed valuation. The College’s primary property tax levy will result in a $4 increase to the annual tax bill for a residential home with a full cash value of $100,000. The College’s primary property tax rate continues to be well below the average of its peers.

A presentation made to the Governing Board on Truth in Taxation and Adoption of Fiscal Year 2018 Proposed Budget is available on the College’s website.

In perspective: wages, the FY 2018 budget, and our future

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.

Wages

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.

PCC: “Pioneers of the Present”

From left: PCC faculty member Rick Rosen, student Alec Moreno ad Chancellor Lee D. Lambert

From left: PCC faculty member Rick Rosen, student Alec Moreno and Chancellor Lee D. Lambert

Pima Community College is navigating wholly new territory. More than 1,200 PCC faculty members, students, staff, Governing Board members, and administrators took part in an all-College meeting and workshops last week at West Campus to address that reality. The members of the College community are “pioneers of the present,” to use faculty member David Bishop’s evocation of anthropologist Margaret Mead’s famous phrase. We are going where PCC has not been before, and are facing a series of threats that, if unmet, puts the College at risk.

We face very serious challenges in a variety of areas. The State of Arizona has zeroed out appropriations to PCC for Fiscal Year 2016. Our enrollment has declined beyond pre-Great Recession levels; the reality is that fewer students are enrolled at PCC than in any year since 2000.

Though the Higher Learning Commission has removed PCC from Probation, it has placed us on Notice. Notice means the College is now in compliance with the HLC’s Criteria for Accreditation, but remains at risk of being out of compliance with the Criteria for Accreditation and the Core Components.

The consequences of failure, too, are spelled out clearly. In February 2017, after the HLC has made a focused visit by September 2016 to PCC to determine whether we have made progress in 11 areas, “The HLC Board will determine whether the institution has demonstrated that it is no longer at risk for non-compliance … or if the College has not demonstrated compliance, whether accreditation should be withdrawn or other action taken,” according to a letter from HLC President Barbara Gellman-Danley.

I am always open to a good idea, and when faculty member Rick Rosen suggested bringing everyone together for a discussion of the College’s future, I called the College’s first-ever mid-semester meeting, and we closed the school for a half-day. PCC needs to hear from all stakeholders about the problems, both new and decades in the making, which must be resolved, along with an outline of developing solutions. Put another way, we gathered to begin answering the question, “Why does PCC exist?” It is a crucial question. As Starbucks CEO Howard Schultz says, in any endeavor, why matters more than what or how, because why reflects an institution’s core values.

We are at a Strategic Inflection Point, a term coined by Andy Grove, then-CEO of Intel Corp. A Strategic Inflection Point is that which causes a fundamental change in business strategy. “Nothing less is sufficient,” Grove said. Many of the assumptions Pima makes about its markets, its competition and its customers need to be re-examined and retooled at a fundamental level in order for us to succeed in a brutally competitive environment.

The frank conversations and workshops that followed centered on how best to meet the College’s future challenges. Our goal for augmenting revenue is to increase enrollment by 1,000 full-time student equivalents over each of the next five years. The College has the capacity to manage this increase. We can increase enrollment through several initiatives, including PimaOnline, the Education Master Plan, International Education and Workforce Education. Regarding expenditures, we will reduce costs by $2.5 million a year to align infrastructure to community needs. A hiring freeze, attrition and other strategies will help close the gap. Also, creative ways to increase revenue and-or reduce expenditures are being collected through our College-wide GREAT IDEAS survey.

Each day, so many faculty and staff at PCC help our students succeed. Our challenge is to provide evidence that teaching and learning at PCC result in an effective cycle of assessment. We also need to offer superlative service to students from the moment they consider PCC through graduation and beyond. Everyone – full-time and adjunct instructors, administrators, the Governing Board, temporary, exempt and non-exempt employees — must play a part.

Heaped upon Nelson Mandela were injustices that would have crushed a lesser person or driven him to retribution. Yet, Mandela said, “I knew that if I didn’t leave my bitterness and hate behind I would still be in prison.” I am sorry that many employees were hurt by the overly negative approaches of the past. However, PCC must free itself from its history so that we can focus our energies on our students and our future. Given the seriousness of our challenges, we must let go of the past so we can move forward immediately.

Let me close with the story of a student whose experience illustrates the promise and power of education and the personal relationships that make PCC a great school. David Lee is a native Tucson who graduated from Pusch Ridge Christian Academy with a diploma but without a plan for the future. At the urging of his siblings, he visited PCC Counselor Melinda Franz. They talked — about his interests, dreams and talents. David entered the Radiologic Technology program, studied diligently and was aided financially by scholarships from the PCC Foundation. Since November he has worked at Radiology Ltd.; he is the 79th employee there to have gotten a start at PCC. “PCC gave me the life I have today,” David says.

PCC has changed the lives of tens of thousands of people like David over our almost five-decade history. As we change to adapt to 21st-century realities, we must remain surefooted and focused on the institution’s North Star of student success, community engagement and diversity. All PCC employees should ask themselves, “What can I do to move the College forward?” We are Pima, and working together, we can accomplish great things. Students are among our most important investors, giving us their time, money and dreams. We cannot and will not let them down.

My presentation and video of the day’s proceedings are available on the College’s website.

A big start to the new year

The past few days have been busy and productive as the College made progress in two important areas: state government engagement, and accreditation.

On Monday, I attended the opening session of the Arizona Legislature in Phoenix. Sen. David Bradley, District 10, invited a PCC team to the session, where we met briefly with Sen. Steve Farley, District 9. Sen. Bradley’s other guests included Daniel Ranieri, President/CEO for La Frontera Arizona, and H.T. Sanchez, Superintendent of TUSD. We discussed the importance of continued funding for education on all levels, including community colleges and universities, and our interest in Gov. Ducey’s proposed budget. I also met Senate President Andy Biggs and Rep.Vince Leach, District 11, Vice Chair of the House Appropriations Committee.

On Tuesday, I led a PCC team at a hearing of the Higher Learning Commission’s Institutional Actions Council Hearing Committee in Chicago. The hearing was held to review the report of the HLC evaluation team that visited PCC in September. As I have written, the College last month received the good news that the team recommended we be taken off probation.

I believe the hearing went extremely well and the atmosphere was positive. I asked that the Hearing Committee accepts the recommendation of the site evaluation team.

The hearing was significant because it was the last chance for us to describe, person to person, to the HLC the many improvements that are taking place at PCC and make our case to be removed from probation. The Hearing Committee asked a variety of questions covering a number of areas, such as integrated planning and budgeting, program review, board governance, leadership transition, and diversity.

The meeting reinforced my belief that the HLC Board of Trustees’ final decision, due in late February or early March, will be a positive one for the College.

To top off the last few days, before Wednesday’s PCC Governing Board meeting a new member of the Board, Mark Hanna, was sworn to begin his six-year term. Mark, a former chair of the PCC Alumni Association and a former member of the PCC Foundation, replaces Dr. Brenda Even, who chose not to run for re-election after ably serving on the Board since 2001.

Clearly, a lot of good things are happening at PCC as we learn, change and improve in order to better serve students and the community.