The Harford Community College Board of Trustees unanimously approved a $46.6 million operating budget Tuesday night, which college officials say is its first balanced operating budget in more than a decade. The new budget comes with another tuition increase and a 3 percent decrease in spending.
The board also approved a $12.5 million capital spending package for the 2016 fiscal year beginning on July 1, as well as what amounts to a one-time, 3 percent bonus for college employees from money not spent in the current budget.
The new operating budget is balanced without a transfer from the college's fund balance, or cash reserves, to cover a structural deficit in which expenses exceed revenues.
"This is the first time where we've voted for a balanced budget since I've been on here," said board member Bryan Kelly, who joined the board in 2005 and attended his last meeting Tuesday, as his final term ends June 30.
Tuition will be increased by $12 per credit hour starting in the fall, in order to help cover expenses as enrollment has declined in recent years. In May, HCC reported there were 3,518 full time equivalent students enrolled for the spring semester.
Tuition rates for the fall 2015 semester will be $116 per credit hour for students who live in Harford County, $203 for students outside Harford and $290 per credit hour for out-of-state students.
The college is also raising the consolidated fee charged students from $20.80 per credit hour to $23.20, also to take effect in the upcoming fall semester.
Tuition and fees will be the largest source of revenue in the FY2016 operating budget, with $20.06 million raised, or 43 percent of the total revenues, according to college budget documents.
Tuition revenue is projected to be 5.68 percent higher next year, for an increase of $1.07 million from fiscal 2015.
College officials expect the number of credit hours taken by in-county students to decline by 2 percent next year, and the credit hours for out-of-county and out-of-state students to remain flat, according to budget documents.
The county will provide $15.2 million to HCC next year, an increase of nearly $300,000 after at least three fiscal years of flat county funding of $14.9 million.
State funding will decrease by 1.54 percent, from $11.03 million for FY2015 to $10.8 million for FY2016, according to the budget.
An additional $445,933 will come from "other" sources, such as interest income and fees charged for using campus buildings.
The total operating budget is 3.07 percent less than the current year's budget of $48.1 million, as college officials said they have worked to decrease costs wherever possible.
Pay 'award' approved
President Dennis Golladay and the board members discussed during a closed session giving all eligible employees a one-time 3 percent pay increase for June 2015, the result of creating cost savings during fiscal 2015.
The board came back into open session and unanimously approved what Golladay called a "one time service recognition award" for eligible full-time and part-time employees.
"It's to show recognition of the employees, the faculty and staff, the administrative people for all the hard work they've done, and where possible the board wants to reward that effort," board Chairman James Valdes said.
Employee pay increases are not part of the FY2016 budget, according to the college officials.
"This is an attempt to make life a little easier for people who do not have a pay increase in next year's budget," board Vice Chair Richard Norling said.
Brenda Morrison, vice president of marketing, development and community relations, said after the meeting that the college amassed more than $600,000 in savings during the current fiscal year to cover the one-time pay increase.
She said HCC has about 1,000 employees, and about 350 are full-time.
The $12.5 million capital budget for FY2016 covers projects such as upgrades for computer and technology equipment, parking lot improvements, road improvements at the entrances to Darlington Hall, renovating and expanding Edgewood Hall and designing the proposed Regional Workforce Development Center to house the college's apprenticeship programs.
Rick Johnson, vice president of finance and operations, said the majority of capital funds will go to the Edgewood Hall project – more than $8 million has been set aside for it.
The college has also budgeted $2.5 million for the design phase of a planned workforce development center, which Johnson said is "very important to Dr. Golladay, very important to the college, very important to the community."
The county declined to commit any capital funding for the project in FY2016, and Johnson said that could affect matching funds from the state for the workforce development center. Harford County Executive Barry Glassman put a hold on all spending for new capital projects, he said, until the county can reduce its total debt load.
Johnson noted the state has committed money for the workforce center project for FY2016, and the college is pursuing "another financial partner, if you will, to keep this project moving forward" and ensure continued state matching funds.
"You will see that project still in the capital budget, and we are working other paths to fund it," he said.
Board member John Haggerty asked about any specific potential funding partners, but Golladay said only that "we're exploring all possible alternatives."
He, along with Johnson, stressed that the college will keep pursuing sources of financing,
"I have never gotten as much interest from people in the community as I have about this project," Haggerty said.
Praise for budget, process
Board members praised Golladay and his top aides for their transparency and cooperation in developing the fiscal 2016 budget, especially by providing online tools, such as a program called "Screech," to help the board understand the budget process.
"It's been an incredibly transparent process, and I really like that," said Valdes, who gave the college administration a mandate last year to erase the structural deficit.
Tom Franza, HCC's chief information technology officer, explained that Screech, named after the college's fighting owl mascot, is a web-based "budget modeling tool," which board members could access any time online to learn more about the college's finances and how the budget is put together, plus give their input on things that can be adjusted, such as tuition, and things that cannot, such as the price of office supplies.
"It allows the board to control the things that they can control," Franza said
Kelly called Screech "award winning."
"You can't make decisions in a silo," he said. "You have to understand the whole ecosystem [of the budget]."
Norling said board members "very much appreciate" the county increasing operating funds for next year.
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"They have difficult budget decisions, just like we do," Norling said. "We just appreciate the fact that the county executive and the County Council members understand how important a good education is to the students in the county, and this college is a major part of that."