Northern Essex Community College
Board of Trustees Audit and Finance Sub-Committee Minutes
Wednesday, October 4, 2023
Attendees: Trustees Jennifer Borislow, Lloyd Hamm, Evan Silverio, President Lane Glenn,
Michael McCarthy, Anthony DeGregorio, and Linda Buckley, Note-taker
Not Present: Trustees Jouel Gomez, Sally O’Rorke
Chairman Lloyd Hamm called the meeting to order at 4:26 pm and the minutes of the May 3, 2023 meeting were approved with a motion presented by Trustee Borislow and seconded by Trustee Hamm. All were in favor, none opposed.
FY24 College Operating Budget
The Audit & Finance Sub-Committee recommended that the Board of Trustees of Northern Essex Community College approve the FY2024 Supplemental Operating Budget of $69,369,342.
BACKGROUND
At the May 3, 2023 BOT meeting, the Board approved the initial FY2024 Operating Budget of $68,724,161. The initial FY2024 Budget was based upon the following: State Appropriation support of $32,493,629, a $5.00 increase in the College Fee – Regular and the $5.00 increase in the College Fee – Allied Health. This revised Operating Budget of $69,369,342 is based upon the above rate increases, along with the increased State support of $32,883,343, Net Tuition & Fees increased by $396k, Grants & Other Revenues increased by $1.6m, and Salaries & Benefits increase of $548k reflects all current approved positions and the net impact of all the various units’ & NUPs salaries & benefits increase. Other Operating Expenses increased by $464k.
Results in a projected FY24 yearend gain in Net Position of $290,313.
The following key assumptions were noted by Vice President Michael McCarthy:
· Tuition revenue represents an increase of $621k or 3% over the Initial FY24 Budget. The tuition revenue was calculated based on total projected credits of 63,703 which is an increase of 1,991 over the Initial FY24 Budget.
· Student Financial Aid (SFA) using a discount rate of 36%–consistent with the Initial FY24 Budget. This rate may be adjusted as the year progresses, waiting to determine the impact of the MassReconnect and Nursing students grants, along with the first year without CARES/HEER funds.
· Grants & Other Revenues, we are projecting a net revenue total of $21.2m which is similar to the projected YE FY23 Budget of $20.8m.
· Salaries & Benefits budget were updated to include both incurred and projected raises for the union contracts and NUPs; resulting in a net increase of $4.6m for FY24 over FY23. Projections include a modest turn-over rate for open positions during the year. The Benefits budget includes the state’s new employee benefit rate of 43.36% and payroll tax rate of 2.45%.
· Other Operating Expenses for FY24 is $15.9m, a decrease of ($1.8M) or (10.4%) from FY23.The primary driver of the decrease is no CARES/HEERF funds/monies to be spent for FY24. The majority of the other operating expenses categories received a 3% inflation factor for FY24.
· FY24 Depreciation Expense was adjusted to $3.9m to reflect projected new net FY23 capital assets.
· Bad Debt Expense of $475k for FY24 is funded in-line with the FY23YE projection. This projection may increase during the year as we realize the impact of the new state grant funding programs and the expiration of CARES/HEERF funds.
· FY24 State Appropriation not yet finalized, additional funds need to be distributed for tuition aid programs and union retro-raises; this FY24 budget submission utilizes the latest available information as of 9/25, this version of $32.9m represents an increase of $390k or 1.2% from the initial FY24 budget.
· Net Investment Income initial projection for the year is ~$900k or ~4%.
· FY24 Capital Appreciation of $450k represents our current anticipated planned spend of our awarded Capital Appropriation for critical project repairs from the state–DCAMM–of $4.6m to be expended during FY24 to FY28.
· Results in a projected FY2024 positive yearend change in Net Position of $290k.
Other Updates:
The college is taking part in a pilot program with SISU, a Youth Development program in Lawrence, which provides lunches consisting of a starch, a vegetable, and fruit, to students at a reasonable rate ($3.00). This program is responsible for 4000 lunches a day, of which our portion is 100 a day, 50 on the Haverhill campus and 50 on the Lawrence campus. With additional marketing, we hope to increase the number of students participating in this program.
The college is running a pilot shuttle program in which 70 students a day are being transported between the campuses, with 10 trips a day, transporting approximately 7 students each way.
In November, the college is hosting a meeting with folks from the Board of Mass. Association of Insurance Agents (MAIA), other leading insurance brokerage firms, and Internship coordinators from NECC, North Shore Community College and Middlesex Community College.
When Chairman Hamm asked what would be our best wish be for the college, Anthony DeGregoria, Director of Fiscal Services/Comptroller, responded with high enrollment, retention, and completion.
President Glenn responded that his wish was to make sure there is no barrier – that anyone who wants to come to Northern Essex can. We will find a way to make it work. President Glenn noted that he is always amazed at how affordable NECC is and in our ability to deliver a high-quality product.
With no further business, the meeting was adjourned at 4:50 pm.
Respectfully submitted by Linda Buckley. October 11, 2023
