The Grand Rapids Community College Board of Trustees met virtually Monday for a budget work session to discuss the impact of COVID-19 on the college’s finances.
“We’re sitting on a fairly solid financial base going into what’s more of an unknown in 20/21,” said Lisa Freiburger, GRCC Vice President for Finance & Administration.
Enrollment for the summer semester is currently down 9% from the budgeted target and Frieburger estimates that loss to be around $400,000. However, enrollment numbers have been increasing over the last few weeks and are expected to continue an upward trend until the beginning of the first summer segment of distance learning which starts May 11.
Fees for the two summer segments have been waived for students, saving them about $200. This cost incurred by GRCC will be offset by federal stimulus money.
According to Freiburger, enrollment for the fall semester is hard to predict given “fairly significant unknowns.”
“More than any other year, students are waiting to see what fall is going to look like,” Freiburger said, noting that it is still uncertain whether the college will be able to resume face-to-face learning or have to continue with online classes or, possibly, a hybrid of both.
Factors that will contribute to enrollment are students who will attend GRCC tuition-free through Grand Rapids Public Schools Promise Zone designation. Additionally, Gov. Gretchen Whitmer announced an initiative offering free college to Michigan front-line workers, but specific details have yet to be outlined.
“We’re in a holding pattern to see what other information comes out from that,” GRCC President Bill Pink said.
The college is anticipating a reduction in state funding, too.
While the exact amount of the anticipated reduction is unknown,
“To put that in perspective, a 5% executive order cut for us for this year would be a loss of about $950,000,” Freiburger said.
Revenue from parking, food services, rental revenue and customized training are down “fairly significantly.” Income from parking alone is down about $400,000.
Trustee Kathleen Bruinsma inquired about Spectrum Health employees utilizing GRCC parking ramps.
“We are in partnership with them, letting them use our ramps free of charge through the end of May,” Freiburger answered.
A significant reduction in spending is projected for both salary and non-salary expenses.
“We are typically underspent by about $2 million and I would anticipate that to be more,” Frieburger said. Adding that she is “‘confident” the college will end this year “in a positive fashion.”
“We will, I’m sure, close with, at least, a $18.8 million fund balance, if not a bit higher,” Freiburger projects. The wildcard to this being an excessive reduction in state aid, such as a 25% cut. Although Freiburger does not anticipate it being that significant.
GRCC is expecting about $6.8 million dollars in financial aid stimulus. Half of this will be allocated to students through emergency financial aid and grants to assist with educational related expenses related to COVID-19.
“Our academic team is working on a very specific plan and we anticipate some of that happening before this year ends,” Frieburger said.
The other half, approximately $3.4 million, will be provided to the college.
“That is what we will use to help offset the direct expenses or revenue loss that we, the institution, have had directly related to covid,” Freiburger said.
Presumptions for the 2020-21 budget include a “fairly conservative” 3% decline in enrollment, a 1.7% increase in tuition rates which was adopted by the Board in April, and an increase in state taxes. While the exact percentage is not known, a 5% cut in state funding has been built into the budget.
At this time, the 2020-21 budget is balanced and does not yet include federal stimulus funds, according to Freiburger. Trustees will vote on this budget during the next Board meeting scheduled for June 15.