Here is a short run-down of a variety of issues that impact Western New Yorkers.
Erie Community College has a new president, Dan Hocoy. His resume is appropriate to the job in-hand. The job in-hand is very challenging.
The College has some very well-known financial issues that will test Hocoy, his staff, and the Board of Trustees including:
- Declining student enrollment, which has been an on-going concern for several years. Reportedly this summer’s session had an enrollment drop off in the low double digits, and another drop is anticipated for the fall semester. The school is heavily dependent on tuition payments to support its budget. State aid is calculated based on enrollment, so even though there have been some modest increases in per-capita aid from Albany, the actual dollars coming to ECC have declined because of enrollment drops.
- The school has signed on to a new technology program designed to bring school record-keeping into the 21st century. The program comes with a substantial annual cost increase for such purposes.
- The school has continued to eat into its financial reserves, which could at some point impact accreditation.
- The College has some substantial unmet capital needs spread out among its three campuses. The Quinn administration failed to produce the school’s share of the new STEM building, which was to be one-quarter of the $30 million anticipated cost.
The College’s long-time financial vice president, Bill Reuter, recently left for a position at Hudson Valley Community College. Reuter was able to keep financial things patched together for a long time, but over the years the school has been left with fewer options to deal with the issues going forward. Filling Reuter’s position will be a high priority for Hocoy.
The new president moved to set the tone for his new administration by reducing the size of his executive staff, laying off two, having one retire, and having a fourth person transferred outside of the executive team. Annual savings are projected at $500,000, which seems a bit on the high side if one of the jobs was just a transfer within the school.
One of the two layoffs involved Jeff Bagel, Vice President in charge of the ECC Foundation. The Foundation is responsible for raising outside funds for the school. Its operations were part of the subject of the State Comptroller’s audit released in early 2016, which called for reforms in the way the Foundation was run. Hocoy extended the duties of Executive Vice President Michael Piekiewicz to include supervision of the Foundation.
The change in staff leadership of the Foundation was not done in consultation with the Foundation’s Board of Directors, which oversees its operations and has an interest in the appointment of the Foundation’s executive. In protest, three-quarters of the Board resigned. No word yet on how Hocoy will deal with that issue.
Finally, some changes are coming to the College’s Board. Former member Len Lenihan is being reappointed by County Executive Mark Poloncarz. There are a couple other Board spots in play, which could possibly strengthen Poloncarz’s hand in influencing management of the school if he chooses.
The Erie County Medical Center went through a rather traumatic event in April – the takeover of its computer systems by a hacker. The Buffalo News reported last week that the hackers wanted the equivalent of $30,000 in Bitcoins as ransom. The hospital refused and instead has been working through the recovery process, improving security of their systems. Hospital management has totaled its losses in terms of added expenses and lost revenues at approximately $10 million. Increases in annual technology operating costs related to improved security are also expected to be substantial.
By coincidence, $10 million is also the limit of liability insurance coverage that the hospital purchased last year. How the hospital’s claim will settle out remains to be seen. It would not be unusual for the insurance carrier to offer something less than the requested $10 million. So it might be like those non-stop TV commercials we keep seeing – “CB law firm got me X million for my claim – ten times more than what the insurance company offered.” Which is why the hospital hired a major local law firm – no, not THAT one – to represent them in dealing with the insurance carrier.
Erie County’s financial challenge
As the time begins to draw near for the preparation of Erie County’s 2018 budget, County Executive Mark Poloncarz and the County Legislature are about to face a new round of challenges. Among them will be the finances of ECC and ECMC.
Poloncarz has provided some limited increases in the county’s annual subsidy to the College, but the increases have not compensated for the school’s growing financial difficulties as enrollment declines. The County Executive proposed a joint county-college working group to study the school’s options for future operations, but the school was slow to respond. Perhaps that will change now.
A major on-going challenge to the county’s finances has been the hospital’s escalating expenses related to indigent care under a federal Medicaid program known as Intergovernmental Transfers, or IGT.
In 2016 the county was required to make millions of dollars more in IGT payments than originally budgeted. Already in 2017, per the county’s May Budget Monitoring Report, payments exceeded $34 million, or $11 million more than budgeted, with seven months remaining in the fiscal year. Total costs for 2017 will likely be on the high side of $40 million.
This issue is substantial and is not going away. It is part of the reason that an earlier post on this blog suggested that the county executive and the legislature will need to think about a county property tax increase in 2018.
The financial agreement worked out among the county administration, the legislature, the hospital, and the Erie County Fiscal Stability Authority (ECFSA) earlier this year to finance capital improvements at the hospital may factor into the county’s IGT payment obligations to the hospital. The amount of money saved by the county/ECFSA bond deal, when compared with what capital borrowing would have cost the hospital to do it itself, is likely to be credited to the county by the hospital in some form. That would provide some temporary – but only temporary – financial relief to the county.
Chris Collins’ take on Trumpcare
The bumbling, stumbling efforts of Republicans in the White House, the Senate, and the House of Representatives to live up to their seven year commitment to repeal and replace Obamacare have been a failure of the highest order. While millions of Americans may, for the time being, breathe a little easier about their health insurance coverage, the issues are not in any way resolved. Let’s see how bi-partisanship works.
The “skinny” repeal bill that the Senate tried but failed to approve last week would have removed coverage from 15 million Americans and increased premiums by about 20 percent. Western New Yorkers would have been among the casualties of that proposal.
Here’s how Congressman Chris Collins weighed in with the New York Times last Friday about the “skinny” repeal:
Representative Chris Collins, Republican of New York and a key ally of Mr. Trump, said the stripped-down bill would be “better than nothing” if it became apparent that the Senate did not have the votes for a more ambitious bill. “It becomes a binary choice,” he said. “If it’s this or nothing, who wants to go home and say I did nothing? No one can guarantee anything,” he added, sending a message to senators wanting assurances.
Having 15 million people lose health coverage with 20 percent increases in premiums for others is “better than nothing”, Chris? Wow! Your constituents are so grateful for your efforts. You seem better suited for stock brokering than legislating.
Flynn keeps his promise
Last year’s race for Erie County District Attorney was a hard fought battle, both in the Democratic primary and in the general election. Things often get said and promised in the heat of a campaign that sometimes do not come to fruition when the winner takes office.
The election winner, John Flynn, committed himself to neither soliciting nor accepting campaign funds from employees of the District Attorney’s office if he was elected. In-house solicitation has been a common practice in the office.
Flynn scheduled a fundraiser for July 27th. He kept his promise. The following is from the event invitation: