Pa.'s community colleges defend need for budgetary reserves
Reserves in the millions of dollars aren't luxuries but instead a hedge against unexpected financial problems, local community colleges say.
When Butler County Controller Jack McMillin criticized Butler County Community College last month for having a $12.8 million fund balance, county commissioners cut their annual contribution to the college by $333,000, or about 9.3 percent.
Butler County Community College President Nick Neupauer said he still is trying to determine how much the cut will hurt the college, where enrollment dropped 11.5 percent for the 2012-13 academic year.
“We've done a lot to tighten our belts,” he said. “With all the cost-cutting measures we've gone through, we're being responsible financial stewards of financial dollars. It's almost as if we're being punished.”
Neupauer said some of the fund balance can be used to match state money for desperately needed improvements at the college. The institution is looking at $18.5 million in projects, including work at the library, construction of a continuing education building and a fieldhouse expansion.
If the state notices how much money the college has on hand, it's more likely to provide matching funds, because it knows the college can afford a project, Neupauer said.
Butler County commissioners said that by reducing a $4.975 million contribution for operations and capital projects to $4.65 million, they help cut a countywide tax increase from 2 mills to 1.
McMillin said the college's surplus has been growing at the expense of county taxpayers, at a pace of about $1 million annually. He added that the $12.8 million surplus represents about 50 percent of the college's annual operating budget.
Allegheny County Community College, at the end of the 2011-2012 academic year, had reserves of about $14.6 million, about 14 percent of its annual operating budget of nearly $105 million.
“We've been working over several years to increase that,” spokesman David Hoovler said. “But it hasn't always happened. ... We've had to draw from reserves.”
Neupauer and Hoovler said colleges also must have cash on hand as money dwindles through the year, until it's replenished by tuition and outside funding.
“We need about $5 million (on hand) to run the college,” Neupauer said.
The college isn't hoarding taxpayer money, Neupauer said. In 2001, the county gave the college $3.2 million for operating expenses. In 2012, it was $3.4 million.
Butler County Community College officials said they've increased the surplus thanks to, in some years, higher-than-expected enrollment and millions in spending cuts.
Neupauer said the college has had or is expecting about $1.3 million in state funding cuts and had dipped into reserves to make up a $525,000 deficit.
For the fiscal year ending in mid-2012, Westmoreland County Community College had a surplus of about $4.5 million, or 12 percent of its $36.3 million annual operating budget, according to Ron Eberhardt, vice president of administrative services.
A good fund balance helps the college obtain cheaper borrowing rates, Eberhardt added.
Eberhardt said it's natural that when county officials see big fund balances, they believe that colleges could use some of their fund balance for their budget so taxes don't have to go up.
“It's a long, slow and steady process (to build reserves). But we have to match that with the real world,” Eberhardt said.
Bill Vidonic is a staff writer for Trib Total Media. He can be reached at 412-380-5621 or email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Cranberry stretch among roads in Butler County to be repaired
- Uncertainty over Pa. state budget trickles down to school districts
- Butler County’s burgeoning tourism industry provides economic boost
- Slippery Rock program connects preschoolers with music
- Plan to build Butler duplex for homeless veterans shelved
- Securing votes a challenge in crowded Butler County commissioner race