District identifies low-hanging fruit in budget

A tuition hike, program cuts and a property tax increase may be on the horizon, according to a board retreat Saturday.

Five of the nine Alamo Community College District trustees attended a retreat in Northeast Lakeview College's library for a look at next fiscal year's budget plan.

In January, Gov. Rick Perry wrote a letter to agencies warning that state appropriations could be cut by as much as 5 percent and asking agencies to start making alternative plans.

The district came up with $7,154,068 as a targeted goal for cuts for the end of this fiscal year and fiscal year 2011.

Chancellor Bruce Leslie responded to Perry's letter by asking for an exemption and included a plan to save $2,146, 220 by this summer and another $5,007,848 in fiscal year 2011.

But Alamo Colleges did not receive that exemption and will have to cover the $7.1 million loss in state appropriations by a combination of reductions, another proposed tuition increase for spring 2011 and a possible proposal for a tax increase.

This revenue cut was confirmed by the state Legislative Budget Board Tuesday morning, thus forcing district officials to continue looking for places to trim.

In January, the state estimated a $1 billion shortfall, but revenue streams well below projections increased the shortfall dramatically.

Recent reports have the state budget's shortfall up to $18 billion, calling the proposed 5 percent cut "just the beginning."

Board Chair and District 2 Trustee Denver McClendon said during the retreat the district needs to look for savings to implement now.

Joining McClendon were Roberto Zarate, District 5; Blakely Latham Fernandez, District 7, Gary Beitzel, District 8; and James Rindfuss, District 9.

District 3 trustee Anna Bustamante attended earlier in the day but left before the budget presentation. Marcello Casillas, District 4, and Dr. Gene Sprague, District 6, did not attend, and District 1 is without representation, awaiting a June 12 runoff.

Diane Snyder, vice chancellor for finance and administration, said during the meeting that with the combination of increased enrollment and proposed funding cuts, the district is being asked to do a lot more with less.

The enrollment increased 11.4 percent last fall from fall 2008.

The district's students totaled 60,265 last fall, up by 6,184 students in one year.

Chancellor Bruce Leslie announced at Tuesday's board meeting that summer enrollment figures show an increase of 39 percent up from last year.

Snyder reported about $5.9 million savings in fiscal year 2010 during the retreat and said she identified some "low-hanging fruit" that accounted for about 25 percent of the targeted $2,1, and told the room of about 35 people that the district cannot continue running the way it has in the past.

Snyder identified nearly $1.5 million in realized savings in:

• outsourcing housekeeper and grounds positions

• closing the motor pool

• moving to a P-card system (eliminating purchasing order paper processes)

• closing the phone bank

• installing GoPrint technology in labs where students pay for their own printing

• discontinuation of printing college catalogs and bulletins

• discontinuation of printing a phone directory

More savings were realized this fiscal year because of right-sizing toward 75 percent of the budget spent on salary and benefits.

According to Snyder's presentation, an increase in average class size has saved $2 million, and the district discontinued 38 continuing education programs for a savings of $1.4 million.

The phased retirement program saved $551,816, and Snyder estimates the phased retirement program will save the district $1.3 million next fiscal year.

The phased retirement program was extended to Aug. 31 at the April 20 board meeting. Participants must declare their retirement by July 31.

The "low-hanging fruit" savings that will be budgeted toward the $2.1 million target includes $300,000 in utility savings for moving to a four-day summer week, $100,000 in deferred technology replacement and $10,000 for use of web-conferencing.

Looking at projections for fiscal year 2011, Snyder presented $1.4 million in cost avoidance savings in facilities alone, yet said facilities still needs $4.1 million more.

Part of the reason for a facilities budget increase is to maintain 24 new buildings with an additional 1.5 million square feet.

Another factor is an 8 percent increase in City Public Service rates.

Some of the facilities savings include an anticipated $500,000 in utility costs for 2011 summer, a $150,000 City Public Service rebate, $100,000 because of solar panels at St. Philip's College's Southwest Campus, and $50,000 cost savings for recycled water at Northwest Vista College.

Plans to eliminate print shop services at the colleges and outsource those projects should save $100,000, Snyder said.

"There are people that can do it for a lot less," Snyder said, adding that the employees standing at the print counter would be "deployed" to another position or given the option to leave the district and work for the vendor doing the same job.

Beitzel, vice chair of the board, suggested looking into a public-private venture with a vendor such as FedEx-Kinko's who might want to build a facility on campus or takeover an existing facility.

However, Snyder warned that for-profit companies could not operate in bond-funded buildings.

She introduced a budget methodology model used by the Texas Higher Education Coordinating Board and said in previous years the budget was sort of a bottoms-up look.

The former finance and administration vice chancellor, James McLaughlin, used this model previously but funding was modified in previous years for this college because of the difference in faculty ratio.