Regular readers of this blog are aware that many posts have appeared here reviewing the financial and management issues that have existed over the years at SUNY Erie (aka Erie Community College or ECC). The college’s Board of Trustees did the right thing nearly a year ago by seeing their former president move on, while bringing in a knowledgeable and steady hand to get control over the school’s serious financial problems when they named Bill Reuter as interim president.

A recent review of the Board’s Committee of the Whole meeting on April 16^th indicates that there remain serious and substantial problems at the college.  Enrollment has dropped significantly, which means that financial deficits are growing.

SUNY Erie, of course, is not the only college that is experiencing such problems.  Western New York schools are being particularly hard hit because they all, for the most part, draw on the same declining pipeline of high school students in the region to fill their seats.  Community colleges throughout the country have taken very large hits in enrollment.

Here are some of the major SUNY Erie issues addressed at the April 16th meeting:

• Fund balance (reserve funds) decreased from $18.5 million to $6.4 million in two years (2018 through 2020).
• Except for the receipt of $4 million in federal stimulus money last year the fund balance would have been reduced to $2.5 million.
• The college’s Board policy states that there should be not less than the equivalent of two months’ worth of annual operating expenditures in the fund balance.  With a budget of approximately $90 million, the requirement would be about $15 million.
• The college’s Fund Balance Reserve Policy states that if “the total fund balance reserve at fiscal year-end falls below the minimum two month goal, unless doing so is approved by and is part of the Board of Trustees’ strategic management of the reserve funds, the College shall develop a restoration plan to achieve and maintain the minimum fund balance.”
• As of March 31^st the college’s “Budget to Actual Dashboard” was showing a surplus of $10.7 million.  That is, however, a timing issue since the County in January advanced the school $7 million of their annual payment that is normally due later in the year.
• As of February 2021, SUNY Erie’s full-time equivalent enrollment was down 20 percent compared with the previous year.  Niagara County was down 15.2 percent; Genesee was 10.2 percent lower.  Statewide the drop in FTEs was off 12.1 percent from 2019-2020.
• Efforts to reduce costs and expenses have resulted in $2.4 million in salary and wage savings compared to a year ago.
• The college’s new IT operating program, Workday, remains a multi-year, multi-million dollar investment that in the current fiscal year eats up about half the available funds for contractual obligations.  Workday, it was reported, “is not able to generate a report to show salaries and benefits for 21/22.”
• Concerning the impact of the new state budget, Interim President Reuter informed the Board that state funding for community colleges, on a year-to-year basis, was reduced.  SUNY Erie’s fourth quarter payment from the state was reduced by five percent.
• Even if the college “were to generate another 1000 FTE’s, the way the calculation is done, SUNY Erie would not get any additional state aid.” The state aid formula provides that community colleges will receive a minimum of 98 percent of the aid they received during the past year. Since SUNY Erie’s enrollment declined so much the 98 percent floor provided a circuit breaker.
• An increase in the state’s Tuition Assistance Program (TAP) for students will have little or no effect on ECC revenues unless tuition is raised for 2021-2022.
• If tuition is increased for the next academic year most students will not be significantly impacted because of the federal and state aid available to them.  Seventy-eight percent of school’s full-time students are eligible for TAP and PELL (the federal tuition assistance program).
• SUNY Erie at the time of the report to the Board was projecting an $8.8 million deficit for 2020-2021.  The projected deficit for 2021-2022 is in the range of $12-13 million.  It is likely that federal funds under the relief plan approved in December plus the more recent American Rescue Plan will reduce these deficits; $24.5 million is potentially available, a resource that can help the college buy some time to prepare for the day in the near future when the extraordinary federal funding is no longer available.
• SUNY has been reviewing the ratio between full-time employees at community colleges compared with the number of full-time students that the colleges serve.  The employee end of the ratio is so far above the statewide average at ECC that if the school was just at the state average ratio, the college would have about $10 million in salary savings.  Most of the excess cost is in administrative positions.
• The school’s share of local high school students going to local colleges is down.  “Kenmore West now has more students attending Niagara County Community College versus Erie Community College.”
• Summer 2021 enrollment is up compared to summer 2020.
• For all the issues previously noted the college has requested a delay in the submission of its proposed budget to the County Executive and County Legislature, which is normally due early in May.

At the April 16^th Board meeting Chairwoman Danise Wilson “reiterated Vice Chair Stone’s sentiments that the financial situation has happened under their watch.”  Ms. Wilson went on to say that “the Trustees did not realize the spending increase of staffing that has put the Institution in a bad financial situation.”

While federal funds are certainly welcomed, the college, according to the Board minutes, “has a structural deficit (operating expenses exceeding operating revenues) that the institution needs to take hard, aggressive action on.”

The information in this post about SUNY Erie is presented as a straightforward report on the college’s problems, direct from the minutes of the Board meeting.  There remain major questions about college leadership and administration and what current or future Board and staff intend to do about these matters.  Time is of the essence, and it is not like this is the first time that red lights and alarm bells have been going off on the subject.

There are some at the college who are reportedly pressing for quick action on the selection of a new president for the college.  Here’s hoping that the search firm and the college’s recruitment committee are properly informing potential candidates about everything about the college – the good and the bad.

Going forward, when does the question about maintaining three campuses come up?

One wonders, where is SUNY in all of this?  Are they pressing for some sort of regional consolidation of community colleges, and if not, why not?

What solutions, if any, will the county executive, the county comptroller and the county legislature offer?

SUNY Erie is a valuable community institution but the school is at a crisis stage.  What comes next will be a report card on how creatively and aggressively the college itself, the state, and the county will step forward to manage the issues at hand.

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