Final Budget Presentation 2012 – 13
 NSCC Focus Friday June 8, 2012
Background:
In FY 2011-12 $5 billion in cuts were made in the state
budget.
NSCC had planned for $1.89 million in cuts.
Actual cut was $2.06 million
NSCC planned fairly well. The Instructional Deans did a
particularly good job.
Revenue forecasts in September did not hold up!
Revenues were predicted to be $1.4 billion short for the
biennium.
To maintain state reserves, the required cuts grew to $2
billion.
64% of the state General Fund Budget is protected by
federal and state law.
$8.7 billion of the General Fund Budget is not protected.
The $2 billion worth of cuts to balance the state budget
for the rest of the biennium has to come from the $8.7
billion unprotected group. That equals a 23% cut impact
to the unprotected group.
Higher Education is in the unprotected group!
The district prepared budget plans that reflected a
potential cut of 15% for the biennium.
Impact* on North:
15% was $2.05 million
* Estimate do not include tuition increase in FY’12-13
• Key factors that can influence the FY 12-13 budget:
– 1.5% permanent cut in state funding for FY 12-13. That
results in a District wide cut of $1 M with a resulting cut
to NSCC of $250,000
– District overall tuition revenue shortfall of approx. $2.1M
- NSCC’s share approx. $545,000
– Increased utility costs due to rate increases: $250,000
 The 1.5% $250,000 permanent cut is being
accomplished by the following unit reductions:
 Instruction:





$167, 307
Admin. Services: $52,000
Std. Dev. Services: $22,159
President:
$10,750
Reserve:
$_______
Total Reduction $252,216
Instructional Budget
Cost shift administrative
positions from state to
soft funds
$ 82,981
Shift PT Faculty salaries
to ABE/ELS TBS budget
$ 18,000
Reduce PT Faculty Pool
17,749
Decrease Instructional
Equipment Repair
budget
35,749
25,000
1/3 shared FT Faculty
position (@ $52,713 per
yr)
$ 17,571
1/3 Benefits for FTF
position
6,006
$23,577
TOTAL PLAN AMT
$167,307
LESS:ORIG AMT
(167,307)
DIFF
$ -
Budget Advisory Committee (BAC)
Comments on Instruction Budget
 The committee strongly suggests that reallocation of
WRT funds to purposes not specific to the program be
closely evaluated. We appreciate the reminder
regarding the importance of alignment of worker
retraining funding with the purpose of the
funding.
BAC Comments: Instructional Budget
 There is a practical limit to how much the faculty budget
can be reduced while maintaining a reasonable expectation
that the college will meet its legislatively mandated
responsibility of generating state-supported student FTEs.
 As enrollment drops and the FTE target stays the same
this will have to be closely monitored. We also
acknowledge that we are the price point for most
students. Mary Ellen O’Keeffe also noted that we are
offering classes when they are full and that three fulltime faculty positions were restored this year with the
hope of more each year.
College Council Comments on
Instruction Budget
 IT Services expressed concern about the reduction to the Instructional Repair Budget
because the student portion of the College’s Microsoft Campus Agreement (to license
Windows, Office and other MS software on classroom computers) the council would
have liked more detail about the $82K of costs that are being shifted to “soft funds.”
Which “soft-funds” are these and which costs are being shifted? What have the funds
been used for previously? How is it that they are now available?
 Instruction will continue to pay a proportionate share of the license costs.
 Please see previous slide with dollar amounts and sources. These were
erroneously identified as “soft funds”. Both WRT and the ABE/ESL TBS are state
funds with reserve amounts.
 The question raised when the budget was presented at the May 15 Council meeting still
lingers: just how sustainable are the shifts to soft funds? What is the evidence that
suggests this is a viable long-term strategy?
 The reduction in hard dollars has been much more dramatic than the reduction
in soft funds over the last 4 years. We are “conditioned” to believe that hard
dollars are more stable than soft funds. This has not been the case.
College Council Comments on
Instructional Budget
 What services/functions are we losing by reducing the Executive
Dean for Workforce Education position to half-time?
 For the past couple of years Steve Miller has been focused
on special projects including grants. The deans or faculty
do not report to the Workforce Director. Therefore, we
believe this will be a net gain by narrowing the scope of the
position to focus on Workforce. For example, this position
will move us forward on new programs and BAS degrees
(which can be self support or revenue generating). The
funding comes from Steve’s position. Most WF Executive
Deans are currently not exclusively fulltime WF Deans.
College Council Questions for
Instructional Budget
 What is the source of the non-state funding that will
support the start-up of this department?
 When is it expected to be self-supporting?
 When is it expected to be revenue-producing? . Grant
indirect budget built up over the past three years.
There is a two year period to break even as a revenue
producing and will not be a net for a while. $200,000
will be the target for a break even point and the plan is
to have it be revenue generating.
 Administrative Services:
 The total budget adjustments proposed by Administrative Services is $52,000. The
adjustment exceeds the $40,418 target of the 1.5% reduction.
 The Division is cost shifting portions of five positions into the rental budget for a total of
$25,000. One position is in the Business Office (Rental Coordinator), three are in the
Facilities and Operations area (Custodian, L-G position, Maintenance position) and one
is in Security (Manager). These positions contribute towards the success of the College
rental effort.
 The position of Capital Project Manager remains unfunded and not filled for FY 12-13.
The Director of Facilities will also not be funded or filled. The two positions are being
incorporated into the responsibilities of the Interim VP for Administrative Services. This
results in a salary cost avoidance of $27,000.
 The combination of cost shifting and salary cost avoidance results in an adjustment of
$52,000 for the Division.
BAC Questions for Admin. Services
 There are broad-based concerns that arose during the course of
this review that are described as: The reductions in permanent
level employee positions, across employee categories (Faculty,
classified and Exempt) experienced by the college as a result of
cuts over the past several budget cycles have put pressure on
remaining personnel to take on heavier workloads.
 We are in an era of diminished state resources and
increased alternative (non-state) resources. We will need to
apply new resources to new positions not just to replace
but to reimagine old ways of doing things. The benchmarks
will drive how we reallocate new and old resources in order
to address our core themes – in other words, how we make
value judgements regarding resources. Pay attention to the
benchmarks!
 Student Development Services:
 To meet the 1.5% budget reduction required of the
college, the percentage of share obligated by
Student Development Services (SDS) is $22,159.
 SDS will meet that by a reduction by decreasing
allocations of goods and services, travel,
equipment and part-time hourly dollars in all our
state budgets. Unfilled positions such as Dean and
a program coordinator will remain unfilled, but
thankfully no additional positions will be left
vacant at this time.
BAC/College Council Questions for SDS
 None listed except for general comments below.
 President: $10,750
 Will be met through cutting goods/services and
travel.
 Continue sharing of salary for “data-puller” with our
sister colleges
BAC Comments on President’s Budget
 BAC members express a preference that the President
is reimbursed for all travel costs correctly owed.
 So noted and appreciated by the President.
General Comments by BAC
 Continued permanent reductions in non-permanent
personnel categories as well as non-personnel
categories presumably leave holes at least in some
instances that must eventually be filled. In divergence
from past practice in regard to funding costs that
cannot be avoided may leave open the question of how
ultimately those costs will be covered. Mark stated
that this is where the Unmet Needs Process falls
into place.
Did the College Council Criteria Align
with the Budget?
 Alignment with mission and core themes: Refilling three vacant full-
time faculty positions is a definite step toward rebuilding the faculty
core that is so essential to our mission, and a step that the council fully
supports.
 Comprehensive Offerings: The proposed budget seems consistent with
this principle.
 Collaboration/Consolidation: Instruction’s plan to share a faculty
member with Seattle Central is a good example of this principle in
action. Within Student Development Services, unfortunate as the
reduction in part-time hourly funding is, a silver lining may be that it
will promote even more cross-training for which that area has already
distinguished itself.
College Council Criteria
 Program/Service Elimination: In Fall 2011, when the
college was facing budget cuts of 13-15%, the council wrote
that “another series of horizontal cuts will subject the
college to ‘death by a thousand cuts’”. Instead, it
recommended that “a much better approach for the health
of the entire college is to eliminate programs and services
that can no longer be sustained.” The budget reductions
that have been proposed for 2012-13 reflect a horizontal
approach in that the four major units were asked to make
across-the-board cuts of 1.5%. However, since the cuts
were relatively small, it seems like a reasonable approach,
and one that does not seem to seriously jeopardize overall
college functioning.
ETEAM Comments on Vertical Cuts
Cuts Only and Using Vertical Cuts - $2 million
 Eliminate Humanities or
 Eliminate Math/Science or
 Eliminate both HHS and BEIT or
 Eliminate all of SDS or
 Eliminate 50% of Admin Services . . .
 Still required to meet target and collect tuition and
improve student success and remain accredited
College Council Criteria
 An exception, however, is within Administrative Services. The council
is concerned that applying the same level of cuts within this area, and
accomplishing this in part by having one person assume three jobs—
Vice President for Administrative Services, Facilities Director, and
Capital Projects Manager—amounts to some “hollowing-out” and
degradation of essential services within these important areas. Some
reported experiencing such degradation already, and fear more of it as
the new major construction project begins
 While applauding Vice President Monterecy’s work ethic in being
willing to continue to take on the responsibilities, the council is not
convinced it is in the best interests of the college. Beyond the
“hollowing-out”/service degradation concerns, there is also a concern
that the college would be so dependent on one individual for such a
wide range of important responsibilities. Single-person dependency
does not seem healthy for the institution in the long run.
Response to College Council
by Admin Services
The context within which wearing three hats developed is based on
the following:
 The Interim VP of Administrative Services, during this period of
diminishing funding, felt that the Division needed advocacy and
action during the resource redistribution process. Facilities, IT,
and Custodians had been historically understaffed and
underfunded. These functions could not be reduced any further.
 Maintaining the capital position and facilities director vacant
assisted in those areas without fiscally overburdening the
Division budget. The VP’s education and experience can support
this activity for a period of time while developing existing talent
on campus to backfill critical functions.
Response to College Council
by Admin Services
•
During this period of diminishing resources, talented in-house staff was
identified, their skills recognized and developed. The Business Office,
Facilities and IT are critical functions in attracting/keeping students and
in providing the essential delivery system for the educational products we
provide. We focused with First Impression Projects: campus wide power
washing; elevator upgrades; furniture replacement; landscaping
improvements; established a day-time custodial crew; bathroom
upgrades; undertook minor renovation projects with in-house staff; IT
created enhancements and cost saving improvements throughout campus;
and the Business Office established a budget director and added an
internal auditor function.
•
The critical parts of the capital budget function are: creating the project
idea; identifying funding sources; getting resources aligned;
manage/oversee the design process and overseeing construction. The last
phase is the easiest, this phase mainly requires budget oversight,
maintaining momentum and facilitating the construction process.
Response to College Council
by Admin Services
 The major essential portions of the capital process are now past.
It will be quite a while before another major capital project
occurs at North. Most activity will be minor projects: For
Example: Art Gallery, E-learning Expansion. Internal talent has
already been identified and developed for this.
 By FY’14 the Facilities Director administrative function will be
reestablished. The functions of capital project manager and VP
of Administrative Services will continue to be combined. The
Division will continue to look for opportunities for sustainable
cost shifting where possible; rebuild staffing to adequate levels;
develop in-house talent and continue to develop job growth
opportunities within available resources.
College Council Criteria
 Privatization Should Be Considered: In Fall 2011 the council
wrote that it “does not see privatization of college services as a
preferred strategy,” but when faced with the then anticipated 1315% budget cuts, “all strategies [including privatization] must be
‘on the table’”. When discussing the proposed budget at the May
15 council meeting, the Executive Team acknowledged that it had
considered privatizing Food Services, but then rejected that
option. Instead, it hired Amanda Lopez-Castanon as the new
Food Services Manager and charged her with reversing the trend
and turning food services into a revenue center. The council
appreciates the fact that the Executive Team considered
privatization as a possible strategy (e.g. not rejecting it outright),
and it congratulates Amanda and her colleagues for the
successful turn-around of Food Services.
College Council Criteria
 Self-Support: The council sees the creation of the
contract training department under Steve Miller,
supported with non-state funding, as consistent with
this principle. It is a step in the right direction toward
making more areas of the college not only selfsupporting, but revenue-producing. The anticipated
revenues from such ventures will be increasingly
important if, as expected, state support for higher
education continues to decline.
General Comments by College Council
 Vacancies by Default Rather Than Design
 A common practice during recent budget-reduction years has been to
address budget shortfalls by not filling vacant positions. The council’s
acute concern about this practice within Administrative Services has
already been noted, and yet a similar concern was registered for
Student Development Services where several years’ of single
individuals wearing “multiple hats” is putting a strain on both
personnel and systems. This approach is understandable and
expedient, but—like horizontal reductions—it does not reflect a
strategic approach. That latter would make budget reductions and/or
organizational restructuring decisions based on a clearly articulated
vision of what the campus needs for the future it wants to create.
There is some concern among the council that the college may simply
be postponing difficult decisions—what some see as inevitable
decisions—about what it wants to be and whom it wants to serve in the
future.
Response to College Council
 The strategic plan core themes, goals, indicators and
benchmarks will drive the budget next year.
 The benchmarks will be critical in determining where
we allocate resources and where we eliminate
resources.
 The benchmarks will be established by the ETEAM
and a comment period will provided next fall quarter.
Thank You
 A special thank you to the Budget Advisory Committee
and Dennis Yasukochi for thoughtful commentary and
questions on the first draft of the budget.
 Another special thank you to the College Council for
their review of how we did or did not meet the criteria
established in December.