Trustees pass budget that includes tuition, fee hikes for summer 2020

CARTERVILLE - The John A. Logan College board of trustees approved the college's 2019-20 budget in August after a public hearing and with a single dissenting voice as Trustee Becky Borgsmiller voted "no" because of her concerns about spending and adopting a deficit budget.

The budget anticipates a fiscal year 2020 deficit of $1.9 million. That mirrors the anticipated deficit of the 2018-19 budget, even though final figures show last fiscal year's deficit was $1.4 million.

Brad McCormick, vice president for business services and college facilities, pointed out that if the college underspends in 2020 by just 5 percent, the amount he expects, "that would result in an end-of-year deficit of $400,000, at most."

He also argued that expected reserves in operating funds total 28 percent to 33 percent of annual operating expenses, which amounts to a 3- to 4-month cushion of about $9 million. McCormick said that included investments and certificates of deposit managed through Banterra Bank. He also pointed out that the administrative procedure on fund balances sets an annual target of 25 percent to 50 percent reserves, and that when working cash (about $7.5 million in the fund) is added to the reserves total, the percentage of annual operating expenditures is 52 percent.

But "if every budgeted dollar, including contingency, were spent, this budget would result in an operating deficit of approximately $1,852,519," McCormick told the board.

Highlights of the budget include a $1 million increase in ICCB operating revenue, no significant dependence on working cash, very little growth anticipated in property tax, and no immediate increases in tuition or fees.

"The administration is monitoring the year-over-year slide in tuition and fee revenue with anticipation of recommending a multiyear tuition and/or fee increase beginning with the summer 2020 semester, following four years of no tuition increases," McCormick told the board.

"With 73 percent of operating revenues directly connected to enrollment and property tax revenue stagnant, a plan for incremental tuition and/or fee adjustments is going to be necessary," he said.

Total anticipated operating revenues are $29,813,465, an increase of $886,374, and expenditures are budgeted for $31,665,984, 4.5 percent more than last fiscal year. So expenditures are expected to exceed revenues by $479, 412. the largest expenditure is an increase in salaries of $518,000. "After several years of limited increases, salaries will recover some lost ground," McCormick said.

The board approved a 5 percent salary increase for full-time faculty for 2019-2020 as part of the four-year collective bargaining agreement with the faculty association; a 4 percent increase for the 2020-2021 fiscal year; and a 3.9 percent increase for the next two years. This increase was ratified by a vote by the faculty association of 46 to 1 on Aug. 15.

The board also approved an annual salary increase of 5 percent for executive support staff and nonteaching professionals under contract for 2020, effective July 1, and a raft of additional wage increases.

Operational staff and Laborer's Local 773 workers - which includes security officers - received $1 more per hour each year for fiscal years 2020 and 2021. McCormick said that takes the "first steps" toward compliance with an Illinois law that requires paying employees a minimum of $15 per hour by 2025.

And employees who are members of Teamsters Local Union No. 50 - which includes custodians, maintenance workers and groundskeepers - received a 5 percent increase for 2020, followed by a 4 percent increase for 2021.

The 2020 budget includes $1.9 million in proposed capital projects.

"As we look toward fiscal year 2020, we will continue our history of sound financial planning and excellent service to our district," McCormick told the board. "The resources in this budget will allow the college to continue the commitment to its mission by improving individual life and society through high quality, accessible educational programs, and engaged learning opportunities."

The budget is effective from July 1, 2019 through June 30, 2020.