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06 May 2013

HACC Board of Trustees adopts 2013-14 balanced budget

HACC continues three-year reorganization plan to ensure growth and sustainability


HARRISBURG – On May 7, 2013, the Board of Trustees of HACC, Central Pennsylvania’s Community College, adopted a balanced 2013-14 budget of approximately $180 million that includes a modest tuition increase and the next phase of a three-year reorganization plan to offset ongoing economic factors.
 
Adoption of Budget
“The board requested a responsible and balanced budget to align operating costs with estimated revenues,” said Tim Sandoe, chair of the HACC Board of Trustees. “It is the duty of higher education institutions to provide affordable and quality education for our students for years to come, while being good stewards of public and private funding.”

HACC President John J. “Ski” Sygielski, Ed.D.,said, “College leaders and I implemented a number of strategies to balance the budget.”

The strategies included:         

  • Rightsizing
  • Generating additional revenue
  • Implementing cost-saving initiatives
  • Implementing a modest tuition increase
 
Rightsizing
Rightsizing involves a reduction in workforce by a small percentage, while the organization makes better use of its space, increases productivity, eliminates needless activities and streamlines reporting.  Rightsizing will encourage the College to utilize resources more efficiently and effectively.

HACC has continued rightsizing by cutting costs, refining the organization and restructuring to better meet the needs of the College. HACC’s 2013-14 budget is $1.9 million less than the 2012-13 operating budget, and after being assessed, the following areas of HACC are being refined and/or restructured:
  • Office of Academic Affairs
  • Office of College Advancement
  • Office of Finance
  • Office of Student Affairs and Enrollment Management
 
In addition, some vacant positions will not be filled, and a nominal number of filled positions will be eliminated. These individuals will be encouraged to apply for other positions at HACC. “Eliminating filled positions was a difficult decision and last resort,” Sygielski said.  “We assessed where the College could continue to refine without sacrificing services provided to the HACC community,” said Sygielski. “The realigning and refining of duties made us look at the way jobs are performed for greater efficiency and accuracy.” 
 
Generating additional revenue
“HACC is embracing new ways to generate income to assist in balancing the operating budget, as well as to eliminate the need for higher tuition increases and/or additional expenses for our students,” Sygielski said.

HACC’s virtual learning unit is implementing the following revenue-generation initiatives:
  • Mobile learning pilot to help support faculty in the creation of new iTunesU/iBooks content and increase the optional use of iPads in traditional classes
  • Military outreach, including increased marketing outside HACC’s service region and participation in the Air Force General Mobile Education (GEM) program
  • Secondary partnership outreach to both local and cyber high schools
  • Workforce partnerships, including training of workforce instructors who wish to teach online
  • International outreach for collaborations beyond national borders, including interest from Singapore in niche programming like gerontology
 
The HACC Foundation is a 501(c)(3) nonprofit organization established in 1985 to raise private and corporate revenues in support of HACC.  In fiscal year 2011-12 alone, the HACC Foundation contributed close to $2.2 million to the College in scholarships, special programs and facilities and provided financial assistance to 1,067 students. To generate additional financial support, there is an increased emphasis on fundraising throughout the College.
 

Implementing cost-saving initiatives
Cost-saving initiatives are opportunities that are critical in balancing the operating budget.  HACC is implementing the following initiatives:
  • Focusing on sustainable energy consumption efforts.  One savings technique has been to standardize the thermostat settings at all HACC-owned and leased buildings. 
  • Closely monitoring “fill rates,”  the number of registered students for a specific class, to optimize the courses offered and the number of seats filled prior to the start of term 
  • Reducing travel, meetings, supplies, professional fees and consulting budgets
  • Leveraging purchasing power through bulk buying for lower-priced College goods
  • Consolidating operations by relocating the Penn Center mail center to the Harrisburg Campus mail center
  • Re-negotiating increasing software maintenance contracts and exploring competitive pricing through the Pennsylvania Community College Commission
 
Implementing a modest tuition increase
The Board of Trustees voted to increase tuition by $3 per credit for sponsored school district students, $6 per credit for all other in-state students and $9 per credit for out-of-state and international students.  The technology fee will increase by $5 to $20 per credit hour – the first increase in two years.

Sygielski said, “We know the tuition increases may present a financial hardship for many of our students. We will work with them to apply for scholarships provided by generous donors to the HACC Foundation, which has implemented a new scholarship management system to streamline and simplify the scholarship application process for our students.”

“HACC strives to keep tuition as affordable as possible while maintaining HACC’s high educational standards,” Sygielski said. “Our students are our top priority.”

 
Economic Factors
Ongoing economic factors remain a challenge to the College, including reductions in federal spending, flat funding from the state and reduced funding from the 22 sponsoring school districts.

Beginning March 1, 2013, sequestration was authorized by the Budget Control Act of 2011. The act mandated automatic across-the-board cuts if the U.S. Congress failed to act to reduce the federal deficit by $1.2 trillion over the next 10 years. Congress did not pass the required deficit reduction; therefore, sequestration was implemented.

The sequester will impact most U.S. Department of Education student aid and grant programs, such as Supplemental Educational Opportunity Grants (SEOG) and Federal Work-Study. The Pell Grant program is exempt from sequestration this year. 

“Pennsylvania Gov. Tom Corbett’s proposed 2013-14 budget includes no increase for community colleges’ operating budgets or capital projects. Community colleges have not seen an additional increase in their operating appropriations in the last five fiscal years. In fact, in 2011-12, there was a 10-percent cut,” Sygielski said. “Though there is no proposed cut in funding this fiscal year, on a per-student basis, the proposed funding is less than 1995-96 levels.”

Sygielski continued, “I encourage you to contact your Congressional and state elected officials to communicate the need for increased funding to community colleges.”

Rising healthcare costs are an additional factor that increase expenses for institutions to add new employees, care for existing employees and compete in the global economy.

Rising costs in software maintenance and decreasing discounts for educational institutions are also growing concerns.

Under a new, negotiated four-year agreement, contributions from the 22 sponsoring school districts in Cumberland, Dauphin and Perry counties to the College’s operating expenses will be reduced from an aggregate of $8 million in 2013-14 to $6 million in 2014-15, $5 million in 2015-16 and $4 million in 2016-17.

“The sponsoring school districts contribute to the tuition their residents pay to attend HACC. The agreement will reduce their contributions to the College’s operating expenses over the next four fiscal years.”  Sygielski added.

“HACC experienced double-digit growth in enrollment through 2000-10. Fall 2011 was the first year that HACC experienced a slight decline in enrollment in over a decade. This is a trend we are seeing nationwide unfortunately,” Sygielski continued.“In the face of federal and state funding cuts, an increase in healthcare costs and the College’s tremendous growth, HACC has continued to strive for minimal impact on our students. Simply put, we are finding ways to do more with less.”
 
Maintaining Quality Workforce
“HACC is continually looking at economic factors, organizational structure and salaries to ensure that HACC remains competitive in all areas of employment and educational offerings,” said Sygielski.

In the 2013-14 fiscal year, all HACC employees will receive a 2-percent wage increase, effective July 1, 2013. For impacted faculty only – employees whose salaries have not yet reached a predetermined target dollar amount in comparison to similar institutions – there will be an additional 0.5-percent increase to ensure salary equity.
 
Mission and Vision for the Future
“HACC will continue to be resolute in facing economic challenges while adjusting to the needs of our students and those we serve in the community,” said Sygielski.

The College’s new mission statement distinguishes that HACC will be the first choice for a quality and accessible higher education opportunity.  The new vision statement expresses that HACC will create opportunities and transform lives to shape the future.

“The adoption of the 2013-14 budget, and the four strategies we implemented to achieve a balanced budget, were necessary – though difficult – to allow us to bring our new mission and vision statements to life,” said Sygielski.
 

 
About HACC: HACC, Central Pennsylvania’s Community College, was established in 1964 as the commonwealth’s first community college. HACC offers nearly 200 associate career and transfer degrees, certificate and diploma programs to more than 22,000 credit students in a 10-county area with regional campuses in Harrisburg, Gettysburg, Lancaster, Lebanon and York, and an online Virtual Campus that reaches students on a global scale. In addition, HACC is Central Pennsylvania’s premier workforce development provider with more than 50,000 students enrolled in areas such as job training, customized company contracts, public safety, healthcare, technology, trades and computer training. For more information, go to www.hacc.edu or call 1-800-ABC-HACC (1-800-222-4222).

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