College freezes hiring, cuts operating budgets and other expenses
Iowa’s community colleges are cinching up their budgets this fall as they seek to weather sharp declines in student enrollment caused by the pandemic.
The state’s largest community college, Des Moines Area Community College, is facing a nearly 7% decline in enrollment this fall. It’s the worst drop in DMACC President Rob Denson’s 17-year tenure, and possibly the worst in its history, Denson said in an email last week to faculty and staff.
“We’d anticipated and budgeted for a slight reduction, but came in 5% below our revenue target,” Denson wrote in a memo obtained by the Business Record. “Projected over the coming year, this likely will result in a $2,300,000 annual revenue reduction, maybe more as we continue to see numbers for this term, spring, and next summer.”
In a roundtable discussion with the state’s other 14 community college presidents earlier this month, most said they were facing 5% or greater enrollment decreases this fall, Denson said. “So we’re right in the ballpark.”
As part of its belt-tightening, DMACC is reducing its travel and conference spending, sponsorships and part-time temporary hiring budgets by about $1.1 million collectively, and will also cut its operating budgets by 2.5%, or $400,000. Additionally, DMACC is freezing hiring for all positions unless they are specially funded.
“Many, many colleges are having significant decreases in enrollment, and we’re not any different,” Denson said in a telephone interview on Monday. “The silver lining here is we’re not going to conferences and not traveling anyway due to COVID. I would say we’re weathering this with a minimal impact to our students, and with no layoffs of staff.”
Each of the state’s community colleges is required to maintain at least 30 days’ emergency operating funds; DMACC maintains about a 90-day cushion, Denson said.
“We have some pretty healthy reserves, but the concern is that it’s one-time money,” he said. “Our plan is to make these cuts out of ongoing operating savings, and not touch reserves unless it’s a true emergency — which we do not foresee.”
In his notification to faculty and staff, Denson said one of the positions that won’t be filled at this time is the new director of diversity, equity and inclusion. Even though the position recruitment period has closed, DMACC is postponing further action and halting the search for now.
“I assure you in the strongest possible terms that this action on this new position is not a reduction in our equity commitment,” he wrote. “We will continue to pursue this important work until our financial and enrollment picture indicates that we can proceed with this position. This is important to us and to the communities we serve, and I promise that it will continue to be an area of focus and action.”
An enrollment snapshot late last week showed 18,066 students enrolled across DMACC’s eight campuses. Although that number will inch upward through early October as additional high school students enrolling for DMACC credits are counted — it was up to 20,904 on Monday — the count made on the same day each year is a consistent barometer for enrollment, Denson said. The mix of students, which has trended toward a majority of part-time students, moved further in that direction, with enrollment of part-time students increasing by 1.3%, while enrollment of full-time students was down 1.3%.
The last time that DMACC experienced nearly as large an enrollment dip was in the fall of 2012, as the economy began to improve following the Great Recession of 2008-09. Enrollment that fall declined by 6.84%, ending 12 consecutive years of fall enrollment growth that pushed student enrollment up 135% during that period.
Typically, the beginning of a recession like Iowa is seeing now would drive enrollment up. “Early on in the recession, we thought it would be the same; that did not turn out to be the case,” Denson said. “We’ve got some students who would have gone to a four-year school, but it’s not a big wave.”
Among budget components that will be unaffected by the reductions is DMACC Business Resources, which is “still in full swing,” Denson said.
“In fact, we’re going to take a fairly large bond issue for new 260E [workforce] training to our board in October,” he said. Those 23 workforce training programs pending board approval total more than $9.6 million, according to the October board agenda. (The award amounts made to the companies through the Iowa Industrial New Jobs Training Program are paid back and the bonds retired by the business diverting 1.5% or 3% of gross payroll from the Iowa state withholding taxes generated by the new positions.)
Several capital projects that are in various stages will also continue as scheduled because they are each paid for through DMACC’s plant fund, which is separate from its operating budget, Denson said. Among those projects are the automotive technology center under construction on the Ankeny Campus, the STEM Center at Urban Campus, the Carroll Campus expansion and the Boone Campus wellness center.
Denson anticipates a fairly rapid turnaround once a COVID vaccine becomes widely available.
“I think spring and probably even summer [enrollment] will be down also, but once there’s a vaccine, I think we’ll go gangbusters,” he said. “I think we’ll be in good enrollment shape within 12 to 13 months.”