Three Rivers Community College grapples with ways to tighten budgetary belt

Three Rivers Community College is anticipating taking more than a $1.5 million hit in its 2010 budget, between significant cuts in state funding and other increases in expenses with the current state of the economy.

At the board meeting on Wednesday, college officials found themselves considering raising tuition and fees, plus bolstering an early retirement program in order to avoid having to make layoffs or cutting academic programs.

"None of these are attractive options, but it's the reality that us entities that receive state funding find ourselves in," said Robbie Myers, vice president for administration and governmental affairs.

All state departments are facing core cuts of 15 to 25 percent, Myers explained. The Missouri Department of Higher Education has requested impact statements from all colleges.

At Three Rivers, state funds account for more than a quarter of the budget, which equals about $4.5 million in the next fiscal year.

During a budget crunch in 2001, Missouri higher education institutions had 8 percent in state appropriations cut after the House and Senate requested impact statements for up to 15 percent. This year administration at Three Rivers recommended the board prepare for the maximum blow.

"It seems like every day things in our economy are looking worse, not better," said Joe Rozman, Three Rivers president.

If tuition is raised $6 per credit hour for in-district, out-of-district and out-of-state students, on top of raising the common fee per credit hour from $13.50 to $15, plus adding an $8 surcharge for enrollees, the college can survive the loss, Rozman said.

The raise in tuition and fees would make up for about 20 percent of the loss in state funding, and the surcharge would cover the rest.

"You're looking at a $20 raise," exclaimed Bill Hollida. "This is not the time to be raising tuition."

The trustee suggested a budget freeze instead.

"We need to freeze this thing like it was below zero," Hollida continued. "This thing is serious. We're in a situation that we haven't been in during our lifetime."

Board member Randy Winston pointed out that 82 percent of the college's student base receives some sort of financial aid, federal Pell grant or they qualify for the A+ program. Less than 20 percent of students are presently paying out of pocket, he said.

"To me it's the least harmful way to make up the funding," said Winston. "It protects faculty and keeps staff intact."

In 2005, the board already approved a plan that would increase in-district tuition $3, which would have brought the cost for area students to $70 in 2010. The new recommended plan would bump that figure to $73.

To offset another $400,000 hit after health insurance premiums go up, along with the college's retirement system contribution, possible step increases and the RAIDER incentive scholarship, the proposed solution Rozman laid out would encourage eligible employees to retire in 2009.

Approximately 15 employees at Three Rivers who are qualified to retire, as determined by the Public School and Education Employee Retirement Systems of Missouri, would receive 100 percent of their final salary as a one-time accessible incentive paid over the course of five years, according to Rozman.

Five years ago, the college offered 70 percent of an employee's annual salary if they retired the first year of eligibility, which was determined obtainable with a service requirement of 15 years. The payment dropped to 60 percent the second year, 50 percent the third year and went to zero the fourth and succeeding years.

Present last night, math instructor Kenny Bullington explained that most long-term employees missed their trigger points because they felt the percentage was not enough to make the deal worthwhile.

"If you don't change the incentive, you won't have anybody leave," said Bullington, who represents the faculty on the salary, benefit and welfare committee.

"Only one or two of the 15 eligible employees are (currently) thinking about retiring."

The college already averages about two retirees a year, according to Myers.

Information Rozman passed out revealed that early retirements in conjunction with a hiring freeze on new positions could save the college close to a half-million dollars in the next budget. He explained that under the most extreme circumstances, adjuncts could be hired to teach courses.

"We can live with that for a year or two until we're beyond the crisis, then hire the full-time faculty back," stated Rozman.

The president commented that 10 percent of the college's higher paid faculty could also be replaced by younger, less experienced individuals. "We're paying instructors $60,000 a year when we could pay someone to do the same job for $35,000," said Rozman.

Winston noted, "But we're paying for years of service and experience."

"We never complained about the new faculty members we've hired," responded Rozman. "The older faculty members that become experienced started new and young as well."

The president continued, "The fact is everyone's going to retire."

Board chairman Steve Cookson asked, "Don't people look forward to getting to retire anymore?"

The board, in the absence of trustee James Grassham, who was out because of serious medical complications, agreed on one small hike before the motion was tabled.

The college will raise the used book rental fee from $17 to $20 per course and raise the calculator rental fee from $10 to $20, since the items become outdated so quickly, causing the college to lose money. The decision, however, would only make up for $50,000 of the administration's proposal that totaled $1,585,000, preparing for the worst case scenario.

Trustee Marion Tibbs requested that professional staff show examples of salaries for employees eligible in the retirement system before the board comes to a decision on the whole package that was presented. Trustee Wilbur Thornton said after the board does their "homework," they may need to call a special meeting prior to the regularly scheduled meeting in January.