SPECIAL STATE BOARD MEETING
June 8, 2012
State Board for Community and Technical Colleges
Cascade Room A&B, 4th Floor
1300 Quince Street SE, Olympia, WA
AGENDA
9:00 a.m.
Call to Order/Adoption of Agenda
Action
Sharon Fairchild, Chair
9:05 a.m.
Hill Group Efficiency Study Report
Discussion
Tab 1
Erin Mundinger
12:00 p.m.
Adjournment
Next Meeting: June 20-21, 2012
Clover Park Technical College
6/4/12
EXECUTIVE SESSION: Under RCW 42.30.110, an Executive Session may be held. Action from the Executive Session may be
taken, if necessary, as a result of items discussed in the Executive Session.
PLEASE NOTE: Times above are estimates only. The Board reserves the right to alter the order of the agenda. Reasonable
accommodations will be made for persons with disabilities if requests are made at least seven days in advance. Efforts will be made
to accommodate late requests. Please contact the Executive Director’s Office at (360) 704-4309.
Sharon Fairchild, Chair ● Beth Willis, Vice Chair
Jim Bricker ● Erin Mundinger ● Shaunta Hyde
Elizabeth Chen ● Anne Fennessy ● Wayne Martin ● Larry Brown
Charles N. Earl, Executive Director ● Beth Gordon, Executive Assistant
(360) 704-4400 ● FAX (360) 704-4415 ● www.sbctc.edu ●1300 Quince Street SE ● PO Box 42495 ● Olympia, WA 98504-2495
SPECIAL MEETING AGENDA ITEM
TAB 1
June 8, 2012
Discussion
Action
Topic
Efficiency Study
Description
During the spring and summer of 2011, the Efficiency Study Steering Committee discussed and
then recommended hiring an outside consultant to assist with the final phase of the Efficiency
Study (ESSB 6359) with an analysis of college expenditures, potential governance changes and
recommendations. A request for proposals (RFP) was issued in November and the Hill Group
consulting firm was hired in February. This agenda item is intended to provide an update on the
methodology, metrics and model the Hill Group has developed to complete the analysis and
provide recommendations to the Efficiency Study Steering Committee.
Key Questions
Has the approach developed by the consultants included good representation and adequate
input from community and technical college leaders?
Will the study’s methodology and model lead the college system to recommendations that are in
alignment with the System Direction and Mission Study goals?
Analysis
ESSB 6359
In 2010, the Washington State Legislature passed ESSB 6359 requiring the community and
technical college system to find efficiencies that both reduce costs and improve the quality of
education and job preparation for students. The legislation called for three reports: an initial
report on current efficiency measures in place in 2010; a second report in 2011 describing new
and expanded regional and statewide efficiency efforts and a final report addressing possible
governance changes that may increase efficiency due December 2012.
Governance Analysis
The Hill Group consultants are working with the Steering Committee on two tasks. The first task
included collaborating with all the colleges on an administrative spending analysis to compare
Washington’s expenditures on community and technical colleges with other states. The
consultants primarily worked with the Business Affairs Commission on this task.
Second, the consultants developed criteria and considerations for governance options identified
by the Steering Committee. The governance options were listed in the 2011 Efficiency Study
report:
Tab 1, Page 2





Consolidating some services and functions among colleges.
Creating regional, multi-district consortia merging some services and functions among
colleges and leveraging purchasing agreements and contracting services.
Merging two or more college districts into one multi-college, multiple accreditation
district.
Merging two or more college districts into one multi-college, single accreditation district.
Keeping the present governance structure in place.
The consultants are providing a more comprehensive analysis of college districts in three
regions, including Pierce County (Bates, Clover Park, Pierce, Tacoma), Whatcom County
(Bellingham, Whatcom) and east King County (Cascadia, Bellevue), as case studies for testing
criteria for these governance options using broad impact considerations identified by the
Steering Committee. Analyses includes a cost analysis of the colleges’ major functions
including labor contracts, student enrollment patterns and impact on the value drivers that affect
quality and services for students, employers and communities.
Development of December 2012 Efficiency Study Report
Numerous representatives from the community and technical college system have been
included in discussions concerning the analysis and research used in this study. The Hill Group
will be presenting its findings and conclusions in June. The 2012 Efficiency Study report will be
drafted and circulated broadly for review in early November, and acted upon by the State Board
in December.
Meeting Dates
Groups
Purpose
March 5-8
 Efficiency Study
Steering Committee
 Presidents/Chancellor
from the 9 case study
colleges
 Representatives from
the Business Affairs
Commission
April 9-12
 Efficiency Study
Steering Committee
 Individual visits at the 9
case study colleges
 Business Affairs
Commission
Meetings to discuss individual college
differences and unique challenges, preliminary
expenditure analysis, and value driver research
review.
May 14-16
 Presidents/Chancellor
from 9 case study
colleges
 Efficiency Study
Steering Committee
Meetings to discuss benefit driver analysis
pertaining to student persistence and
achievement. College operations analysis.
Initial meetings to discuss study methodology
and data collection.
Tab 1, Page 3
June 7-8
 State Board Special
Meeting
 Efficiency Study
Steering Committee
State Board meeting to provide members with
an overview of the methodology and analysis
model.
Steering committee meeting to discuss findings,
conclusions and recommendations.
June 22
 Efficiency Study
Steering Committee
Develop draft recommendations on criteria for
governance options and operation
consolidations.
Late July
 WACTC
Consider draft recommendations and provide
input for the Steering Committee.
August
 Efficiency Study
Steering Committee
Refine final recommendations to be proposed to
the State Board.
September
 State Board
Discuss Efficiency Study proposed
recommendations.
October
 WACTC
Discuss Efficiency Study proposed
recommendations
November
 State Board
Discuss Efficiency Study report content
December
 State Board
Approve Efficiency Study report and
recommendations to the Legislature.
Background Information
Attachment A: ESSB 6359
Attachment B: SBCTC Efficiency Study Methodology Overview February 29, 2012
Recommendation/Outcomes
Staff will provide a brief review of the legislation and Steering Committee work on the Efficiency
Study. The Hill Group consultants will then provide an overview of the methodology and model
used to complete an analysis of system expenditures and governance options. Board members
will have an opportunity to discuss the consultant’s approach and findings. The Board will
discuss the Steering Committee’s proposed Efficiency Study governance recommendations
during their retreat in September.
Prepared by: Kathy Goebel, 360-704-4359, kgoebel@sbctc.edu
Tab 1
Attachment A
Efficiency Study Methodology Overview
Tab 1
Attachment B
Overview:
“The tool kit for helping students achieve their goals with fewer resources should include a wide
variety of measures and ideas, of which administrative cost efficiency is just one.”
- Business Affairs Commission1
We agree. The goal of this initiative is to identify the optimal set of investments, modifications, and enhancements in
the areas of governance, structure, operations, and instruction that can be implemented to improve, or at least
maintain, the level of value provided by Washington’s community colleges while decreasing the marginal costs
required to deliver this value.
This process will require input from a wide variety of stakeholders and the collection and analysis of various datasets
from each college to help develop criteria for evaluating potential actions, modeling the impact of each action on the
students, faculty, and community, and understanding the resources required for implementation.
While we can never be certain what the implementation of a new method for education delivery, a more streamlined
way to complete back-office functions, increasing regional collaboration between colleges, or altering the reporting
relationships from a governance perspective may have, the ability to solicit information and input from yourself as a
key stakeholder in this process is extremely important.
The following provides a high-level overview of our methodology for accomplishing this goal and providing SBCTC with
the tools necessary to make optimal decisions regarding administrative efficiencies and program changes that will
result in cost savings while maintaining or enhancing student access and achievement.
Methodology:
1. Identify the factors that drive student, faculty, and community benefit
Through the review of primary and secondary research, those factors that drive student, faculty, and community
satisfaction (value drivers) in the context of higher education will be identified and the associated metrics compiled to
understand the current state and related sensitivity of these factors. This objective will also seek to identify the
interrelationship between value drivers within as well as across stakeholders to understand the influence one
stakeholder may have on the value received by another. These points will serve as criteria for evaluating mechanisms
to improve efficiency.
2. Collect and analyze expenditure data from all colleges, using a predefined cost classification system, to
understand resource allocation
Collect expenditure data from each college for comparison against value metrics to understand the relationship
between college expenditures and changes in student, faculty, and community value metrics. These initial results will
provide the foundation for strategic discussions with college business officers and other key stakeholders to better
understand the potential causality for these findings. This analysis will result in the identification of potential
avoidable variable and fixed costs within each college and the system as a whole.
Figure 1: Defining Value and Avoidable Cost
1
Report to WACTC: Evaluation of the April 2009 SBCTC Expenditure Efficiencies Study
1
Efficiency Study Methodology Overview
3. Determine the possible mechanisms for improving the efficiency of the system
Considering the areas of focus depicted in Figure 2, identify potential alternatives for implementation, expansion, or
reduction in order to reduce avoidable costs and thereby maintain or enhance the value provided to our three key
stakeholder groups (i.e. students, faculty, community). This objective will also include developing an understanding of
the relationships between these mechanisms and related impact of implementing multiple mechanisms
simultaneously.
Figure 2: Scope for identifying efficiency mechanisms
e.g. expansion of Washington Online, transportation, childcare
services, join-programming etc.
e.g. consolidation of back-office operations, joint-purchasing
efforts, etc.
e.g. implementation of multi-college districts, increased
strategic alliances between colleges, etc.
e.g. reporting relationships, profit and loss (P&L)
responsibilities, board responsibilities etc.
4. Understand the optimal method for implementation of each mechanism
Given the previously defined mechanisms, define the implementation alternatives for each mechanism and the related
impact on student, faculty, and community value drivers as well as the initial and on-going cost of implementation.
This analysis will seek to determine the optimal implementation for each in-scope alternative. An alternative will be
deemed optimal when the cost of creating additional value is higher than the value realized from the increased
investment, and when a reduction in the resources invested results in a greater loss in benefit than the cost savings
(Figure 3). Additional data may be requested from appropriate individuals to aid in developing these models.
Figure 3: Defining the optimal use of resources
2
Efficiency Study Methodology Overview
5. Develop a model for realizing additional efficiencies and increasing value to the system’s stakeholders
Once optimal implementation alternatives have been identified, a model will be developed to depict the
interrelationships of each efficiency mechanism and understand, given current resources, what mechanisms should be
implemented to allow for additional efficiency to be realized. This will be a dynamic model incorporating all value
driver criteria to be used not only for evaluating current efficiency considerations but also for use in future strategic
decision making.
6. Validate the results with key stakeholders
Even the best data-driven model cannot accurately account for all factors that may influence the ability to realize
expected outcomes. For this reason, the mechanisms identified as being optimal will be vetted by an array of key
stakeholders including college presidents, business officers, SBCTC leadership, and other individuals.
7. Provide recommendations to Efficiency Steering Committee and other key leaders
Compile quantitative and qualitative analysis and provide recommendation to the Efficiency Steering Committee and
other key leaders regarding the efficiency mechanisms to be implemented, their impact on the value drivers of
students, faculty, and the community, and how these recommendations align with the strategy for higher education
defined by all colleges involved and the State of Washington.
3