HFCC general fund drops 91% in 1 year

Times-Herald Newspapers

DEARBORN – A review of a financial audit for the previous fiscal year and a discussion about changing the constitution were the main topics during the Henry Ford Community College Board of Trustees meeting on Nov. 18.

Plante Moran Partner Michael Schrage addressed the board and updated them on the financial position of the college at the beginning of the 2013-14 fiscal year and where the college was spending its money.

Plante Moran was hired by the college to provide an independent audit of the school’s finances for the previous year.

Schrage said the college’s general fund balance was reduced from $7.8 million on June 30, 2012 to under $700,000 in one year.

“The total revenue for 2012-13 was just under $90 million, while the expenditures were $96.89 million,” Schrage said. “The money to make up the difference came from the college’s fund balance.”

Schrage also broke down how the college generated its revenue, with 62 percent coming from tuition and fees, 24 percent from state appropriation and 12 percent coming from property taxes.

In an effort to bring in more revenue, HFCC last month announced it was raising the per credit hour tuition cost from $82 to 87 for residents, $142 to 149.25 for non-residents and from $147 to 154.25 per credit hour for out-of-state and international students beginning in the Winter 2014 semester.

The move is expected to generate roughly $900,000 and college administrators have stated that despite the increase tuition is still among the lowest out of the 28 community colleges in the state.

The college also had two millages, one for a renewal and the second for an addition mill, passed in the November general election.

The renewal will continue millages that are set to expire next year. It will combine the current ongoing millages, one at 2.5 mills and another at 0.5 mills, to one 3.0 mill and renew it for the next 10 years. These mills generate roughly $10 million annually that is used as operational money for the college.

The second HFCC proposal is for an additional 1.0 mill for the college, also to be used for general operational purposes, for the next five years. It is estimated that this proposal will raise over $3 million for the college.

Expenditures for the college included over $46 million for instruction and $20.6 million for administrative services, which was divided between bad debt expense and personnel costs.

Instruction and administrative services made 69 percent of the expenditures made by the college, with the other 31 percent split between student services, instructional support and physical plant operations.

HFCC President Stan Jensen said the college has done a lot to cut down on expenses and generate revenue, including renegotiating contracts with faculty and support staff and implementing an amnesty program for former students who owed the college money from past semesters.

Schrage said the changes the college has made are good, but that more work would have to be done to build up financial reserves.

“Going from the deficit that you had to a break-even point is very significant,” Schrage said. “It’s a good first step in stabilizing the finances of the college, but you need to keep the pedal to the metal because staying at the break-even point will not allow you to build up the reserves that you want to have.”

Later in the meeting, Jensen said the college was taking steps to be reviewed for accreditation from the Higher Learning Commission late in 2014, and that the college needs to start beginning the process of getting all of the appropriate submission and supporting documents together.

“I think this is the right time for this for our college,” Jensen said. “We want to have these things ready when we get visited for accreditation and not have to say that we are planning to do them at some point in the future.”

Jensen said some of the steps the college needs to begin work on are revisiting the college’s vision, mission and values, clarifying the college constitution, streamlining the hiring process throughout HFCC and clarifying how decisions are made and by whom at the college.

Jensen said that reviewing and clarifying college documents would also help with student success, accountability and a feeling of inclusion for all HFCC workers.

“I think that right now we have between 1,000 and 1,200 employees and it’s not clear to me how they have their input at the college,” Jensen said. “I want everyone included in the data gathering and decision making, which will lead us to meaningful engagement of all employees. I want shared leadership where everybody is at the table.”

He stated that he hopes that the HFCC Senate will have a draft of clarifications for the constitution that they can present to the Board and the administration at the board of trustees meeting on April 21, 2014, which would help get the conversation started and serve as a launching point for talks throughout the spring and summer so that it could be finalized before the fall.

He added that the Senate has already begun the review process.

HFCC Senate President Bill Barber told the board that the senate has a constitutional review committee and that the committee has set up two types of forums to describe the review process and gather opinions on constitutional changes, one for full-time faculty and administrators and the other for all of the constituents who work at the college full or part-time.

Barber said the committee will then take that information and begin revising the constitution in January. They will then report their work to the senate, which will consider the recommended changes before sending it to the college organization, who would also review it before sending it to the Board for their consideration.

He added that the commission would work as judiciously as they could to have the changes completed on time or at the latest, late summer or early fall of 2014.

(Bob Oliver can be reached at boliver@bewickpublications.com.)