Henry Ford College budget has surplus of $2.5 million

Times-Herald Newspapers

DEARBORN — After a tumultuous 2013-14 fiscal year, Henry Ford College is projecting to finish next year with more than a $2.5 million surplus.

The budget was approved unanimously by the Board of Trustees at its June 16 meeting.

The 2014-15 budget has the college bringing in $80.8 million in revenue while realizing $78.3 million in expenditures.

HFC Vice President John Satkowski said two large items that will help the college on the revenue side are the property tax adjustment due to the 4 mill renewal/increase passed by voters in November and a reduction in bad debt from $6 million to $2.8 million.

The two items will make up more than $6.3 million of the proposed revenue changes.

“We’ve been taking steps to curb uncollectible tuition and fee exposure, and it has really been paying off,” Satkowski said.

Bad debt or uncollectible tuition is accumulated when a student receives financial aid and then doesn’t attend classes. The college must repay the loan money to the federal government.

At the end of fiscal year 2013, the college was projecting the amount of bad debt to be around $11.5 million and believes that number will drop to less than $4.1 million for the current year.

“We’ll know for sure after the year ends June 30 but we think the number could be as low as $3.8 million,” Satkowski said. “We’ve made significant improvements.”

The bad debt is budgeted to fall to $3.5 million for 2014-15.

Satkowski said the college has implemented several steps to curb bad debt, including de-registering students three times per term if students have not paid for classes or failed to attend, actively billing students throughout the semester and hiring a collection specialist in January.

“We’re actually ahead of the curve in some of these measures,” Satkowski said. “We have been contacted by other schools asking about the steps we’ve implemented to combat this problem.”

Board Chairman Hussein Berry said some bad debt accumulation was “simply the cost of doing business” due to students dropping out or failing courses.

Trustee James Schoolmaster said the college was doing an excellent job in being proactive in eliminating bad debt, but that they cannot rest on their laurels.

“This issue seems to be solved for the moment but we have to stay on top of it,” Schoolmaster said.

Satkowski said the college has made adjustments to bring down its expenditures, but the number is forecasted to rise by more than $2 million next year due to union contract changes with faculty and support staff, capital improvement and IT upgrades and the hiring of seven new faculty members, among other smaller line items.

The institution also made several changes last year to curb expenses, including ending its Lifelong Learning Program, no longer using the Dearborn Heights campus building and renegotiating contracts with faculty and staff.

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