By Annah Johnson
The Grand Rapids Community College Board of Trustees met in a work session on Monday, May 3 to discuss the proposed operating budget for the upcoming 2021-2022 fiscal year before it is voted on during their June 27 session.
GRCC President Bill Pink addressed the board regarding the budget overview, explaining that many schools across the country are facing tough decisions and lingering uncertainty regarding finances due to the pandemic.
Lisa Freiburger, Vice President for Finance and Administration, explained that the college’s revenue in the general fund primarily comes from tuition and fees, state aid, and property taxes. The expenses include salaries and fringe benefits, supplies, and contractors. The proposed 2021-2022 budget is virtually balanced in comparison to the 2020-2021 mid-year budget, totaling $115 million.
“As we close this fiscal year (on) June 30, 2021, we will close in a significantly positive position,” Freiburger said. “A lot of that is due to the federal stimulus money running through this budget.”
Freiburger notes that this funding has helped the college meet COVID-19 related needs of the students at GRCC. Without federal funding in years to come, Freiburger notes that will make a significant impact on the institution’s finances, but in ways that are currently still unknown.
Summer enrollment at this time is trending positively as billing units have exceeded the estimated amount within the budget.
“Which is great news (and) a great sign as we move out of the 2020-2021 year,” Freiburger said.
Summer session continues the recent trend in response to the pandemic, with 75-80% of classes being held remotely. Pink commented that the second summer session will be malleable. If it is a safe option and there is expressed interest in more in-person classes, the administration will try to respond accordingly by making those options available.
Property taxes are totaling higher than predicted, while interest rates are coming in much lower than expected. The Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) award of $15.3 million, along with the CARES act and state-funded COVID-relief funds, have contributed to a positive expense budget variance as well as underspending in non-salary budgets – such as travel and on-campus utilities. Some allocations of said funding are being investigated to provide furniture solutions to outfit for social distancing, continue offering technology resources for remote learners, and install air purification systems across facilities. While previous grant funding was limited to direct student aid and offsetting additional COVID-19 related expenses as mentioned above, the current round of CRRSAA dollars is now available to cover revenue shortfalls related to the pandemic.
GRCC administrators are anticipating a new round of funding under President Biden’s American Rescue Plan but not certain of any grant or federal stimulus program awards to be included in the upcoming budget.
Revenue prediction for the upcoming year is $115.5 million and expenses at $115.3 million showing a projected surplus in the 2021-2022 fiscal year of $126,000, and net assets at $21 million. These numbers are based on projecting conservatively: a flat enrollment from the current year (a 10% decrease from 2019-2020), a 4.5% increase in property taxes and state aid listed as one-time allocations. Upon board approval in the June meeting, the budget proposal also includes possible merit-based increases in salaries up to 2.5%. Non-salary expenses include increases in contractual assistance in Human Resources, Student Records, Website Maintenance and Office of Diversity Equity and Inclusion dialogue training. Freiburger frequently notes the assumption of underspending is built into this budget and conservative estimates at the forefront.
The Plant fund for 2021-2022 accounts for construction for the institution and accrued debt. This includes the remaining $2 million of a $14 million total project cost for completion of the Lakeshore campus, the remaining $3 million of $15 million for the Raleigh J. Finkelstein Hall renovations, and the Applied Technology Center Piazza project that is solely constructed with donation dollars. Due to the Lakeshore campus consolidation and construction, the budget has shifted in response to the transition from leasing to owning lakeshore facilities.
The board meets on May 17 for a regular meeting and then again on June 21 where a request for adoption of the 2021-2022 budget will be voted upon.