BUTLER TWP — Butler County Community College officials still are evaluating the impact a smaller county contribution will have on the college’s $27 million budget for 2013.
On Dec. 26, the county commissioners approved the $196 million county budget for 2013 that included several cuts to lower the county’s proposed property tax increase to 1 mill, down from 2 mills. Among those reductions was a $333,000 cut to BC3, dropping the 2013 county allocation to $4.71 million.
BC3 President Nick Neupauer said college officials met with the commissioners while drafting the BC3 budget and received word over the holiday break that cuts might occur “so it was not a great surprise when we returned.”
“We understand and respect what the county commissioners do, and respect the difficulty of the decisions they make. The allocations we get, we are extremely appreciative of,” Neupauer said.
The cut to BC3 was based on a report by county Controller John McMillin, whose review of BC3’s annual independent audits showed an average of $1 million in annual surpluses since 2002-03, resulting in a BC3 general fund balance today of more than $12.2 million.
In 2001, that balance was $673,233.
McMillin said, “I feel (the accumulated BC3 balance) was directly related to the millage increase, and the non-need for that increase. The original (county) budget showed a 10 percent (about $50,000) increase in the BC3 appropriation.
“The larger point is the county’s budget is showing a fund balance going to zero, with reserve fund balance remaining at the end of 2013. At the same time, the college has been accumulating a disproportionately large reservoir of unrestricted monies.”
Neupauer countered by saying that when BC3’s fund balance is compared with the 13 other community colleges in the state, “we are about smack dab in the middle.”
Since 2001, when the college’s operating budget was $12.46 million, its budget has nearly doubled to $24.61 million in 2012. In that same time, the college’s operating fund balance has grown to nearly 20 times its 2001 level.
Its fund balance now is nearly 50 percent of its operating budget.
By comparison, Westmoreland County Community College had an operating budget of $36.6 million in 2012 and finished the year with about $4.5 million in unrestricted funds, equivalent to just more than 12 percent of its operating budget.
While having a projected $109.5 million operating budget for 2013, Community College of Allegheny County had $14.6 million in unrestricted funds at the end of 2012, the equivalent of 13.3 percent of the college’s budget.
Community College of Beaver County in 2012 had an operating budget of $18.2 million, but finished the year with just $685,569 in unrestricted funds, less than four percent of its operating budget. However, Steve Danik, vice president of finance and operations for Community College of Beaver County, said the trustees would like to bring its unrestricted fund balance up to 10 percent of its operating budget, about $1.8 million.
Talking about BC3’s budget and fund balance, McMillin said, “I’m of the opinion that we could sequester BC3’s full allocation for a full year, and BC3 could survive, and survive comfortably.
“When the college presents its budget to the county, they do not present any of that unrestricted fund balance as an offset (to balance the BC3 budget). The point is, the community college should not be making $1 million a year, and stashing it away, then asking for more each year.”
Jim Hrabosky, finance director for BC3, explained the fund balance has accumulated because of several factors, including enrollment revenue exceeding projections some years or low department spending other years.
“We’ve also been very successful at our off-campus sites, where we charge double tuition,” he said.
McMillin, who has brought up BC3’s growing fund balance at county budget meetings for several years, noted the annual $1 million profits started before BC3 began expanding to branch campuses and before it started charging double tuition outside the county.