NORTHWESTERN MICHIGAN COLLEGE
BOARD OF TRUSTEES
Tuesday, April 20, 2009, Hagerty Center

CALL TO ORDER –

REVIEW AND APPROVAL OF AGENDA – Chair Ross Childs welcomed the audience and explained that trustees would be discussing various budget factors, but no decisions would be made at today’s meeting.  On a motion by Bill Myers, seconded by Doug Bishop, the agenda was approved.

PUBLIC INPUT – Trustees heard public input from Marv Studinger, who referenced the budget guideline regarding equity in salary and benefits.  He said faculty is 2.4% below their peers and asked that trustees keep that guideline in mind as they make their decisions.

DISCUSSION ITEMS

Budget Development – Cathy Jones said that the budget as presented has not changed from the last study session, except to exchange some estimates with verified numbers. 

In response to questions, the following points were made: 

• The college expects a mid-summer surge in enrollment as families determine they cannot pay for their first-choice institution and opt for community college.  If NMC experiences a greater-than-anticipated enrollment increase, we will staff with adjunct instructors.
• If an opportunity arises to offer a new market (i.e. builder CEUs), NMC has the resources to respond.
• Grand Traverse County set taxable values at a figure higher than our estimate.  That figure doesn’t change, even if taxes are not collected; the county uses a revolving loan fund to keep that figure whole. 
• Federal revenue is up 24+% because GLMA will receive $400,000 base grant, which is $100,000 over what was budgeted for the current year.
• Of the funded-but-vacant positions in the budget, Cathy Jones said the HVAC position is most likely to be filled.
• Maintenance and renovation numbers in the budget represent compliance with the schedule presented to the board earlier and their decision to maintain campuses in “good” condition.
• If the budget is approved as recommended, employee groups will each make their own recommendations as to how the 2% will be allocated to employees in their classification.
• The 2% salary increase recommendation does not fully fund any plan. It would cost more than $800,000 more to fully fund the plans.  The only way to do that without an increase in tuition would be to reduce the number of positions.
• Preserving jobs has always been important to this institution; reducing positions was not part of the conversation. The college is sensitive to how many full time positions we have.
• Feedback to the 2% increase has been positive, but not without angst.  Employees are looking at what is good for the whole college and the students.

Trustees made the following comments:

• Doug Bishop commented that this is obviously a long-thought-out, balanced approach.  Times are tough but they are not hopeless.  To do less than this makes us become part of the problem.
• Ross Childs stated he has been involved in budget building for 50 years, and this is one of the best he has seen. Getting buy-in is key.
• Jay Hooper commended NMC’s work on health care benefits this past year.
• Ross would like to see the college do something relative to retirement. President Nelson said this is on the MCCA agenda.  A bill was presented, but it did not come out of committee last year.  MCCA asked that as of a date certain, new employees would not be allowed into the system.  He said he would let Ross know when this comes before the legislature again, if Ross would like to testify.
• Bill Myers expressed concern about friends and neighbors response to seeing college employees receive across-the-board salary increases. Unemployment is at 13% and going to get worse.  He thinks a salary freeze would be appropriate and would give us flexibility to add staff. 

Budget Approval Process and Time Line – President Nelson provided the following:

Public Input – Chair Ross Childs offered those present an additional opportunity for public input.  Marv Studinger said he has no problem with the idea of a defined benefit plan, but the MPSERS plan was not funded properly to begin with.  He expressed optimism that by next year we will be in better shape than some think.

Additional comments:

• Cheryl Follette stated they were told things were not that bad a year ago, and then they got a lot worse.  Michigan’s projected unemployment levels may start to turn around in 2011.  She feels that NMC employees are blessed to have a job, without a pay increase.  She is concerned about a year from now if the bottom keeps falling, and wonders who is willing to risk their jobs.
• Doug Bishop said he is nervous, but optimistic. If things get worse the board will deal with it.
• Bill Myers asserted it will get worse, he does not think there is any doubt.
• Susan Sheldon expressed her support for the 2% adjustment.  She has talked with many companies in the region and feels it is very much in line with what others are doing.
• Terry Sievert told trustees he appreciated their willingness to discuss the issues openly. The college is in the position it is because faculty and staff have stepped up to take responsibility.  He agrees if things are bad next year, employees will continue to respond.
• Chris Keenan said she met with employee groups to discuss the situation and is thankful we are not in an adversarial position.  Faculty Council suggested that the 44% of faculty members at the top of the scale forego an increase in FY10 so others could get step increases. That action would not just impact their salaries for next year, but would also affect the amount they receive in retirement.

Board Chair Report – Ross Childs said the recent Scholarship Luncheon was a remarkable experience.  Foundation Member David Gray represented the scholarship that bears the name of his grandfather.  Mr. Gray shared that his grandfather is one of only two living individuals from World War I.  At 113 years old, he is the second oldest man in the world.  Ross said he also attended a scholarship luncheon at the University of Michigan recently.  They had no more people, no more pride than NMC—and it was their first luncheon ever. Ross noted that U of M is learning from NMC how to do things right!

As chair of the U of M Alumni Club locally, he reported that last year there were four scholarships and two applicants.  This year they have five scholarships and have received 14 applications, a sign of increasing need.

President’s Report – President Tim Nelson reported on the following:

• The call for Fellows Nominations has gone out and we will be scheduling a nominating committee meeting, perhaps just prior to next month’s board meeting.
• Renovations are being proposed to address classroom and office needs.  Currently out for bids, costs are estimated to be around $100,000.
• Regarding the State budget, Tim noted that the House version contains language about consolidating and removing community colleges from the state system. If the language stays, it is considered “intent” language and does not require any action. 
• Trustees will begin having conversations about allocation of surplus at the April or May regular meeting.  Planning and Budget Council will make recommendations to the President and he in turn will take a recommendation to the board.
• President Nelson met with Senator Stabenow (who serves on four committees in DC), Chamber of Commerce officials, and four firms that deal with alternative energy. The topic of their discussion was how companies can access the venture capital they need.
• He thanked trustees for their open and candid communication, and he thanked faculty and staff for their work and their comments.

ADJOURNMENT – The meeting adjourned at 10:30 a.m.

Recorded by Karen Sabin