College consolidation benefits questioned
By Tiffany Jothen, The Enquirer-Journal
July 24, 2011
Consolidating community colleges could diminish local control and save little compared to the sizable impact it could have on more than a dozen communities.
Stan Sidor took the helm of South Piedmont Community College on July 1. Tuesday, he joked that he’s unsure whether to unpack his last box.
Late last month, the N.C. General Assembly’s Program Evaluation Division recommended merging 15 smaller community colleges based on results of an efficiency study. The move would combine administrative functions. SPCC is on the list of possible mergers.
“When you become larger, it becomes more difficult to hear the local community and respond to their specific needs,” Sidor said. “The question is a correct question: How do we reduce administrative costs and generate efficiencies?”
At the same time, he said, community colleges are about just that — community.
The State Board of Community Colleges unanimously passed a motion July 15 in opposition of the merger.
“We do not believe savings identified from these potential mergers would in any way compensate for the transformational changes this recommendation would have on our system and our state,” President Scott Ralls said in a press release.
The study assumes the merging of 15 colleges by 2018, saving up to $5.1 million annually in administrative costs.
In a letter to John Turcotte, director of the Program Evaluation Division, Ralls wrote: “While $5 million in savings is certainly not something to be taken lightly in a time of necessary budget austerity, the fact that only $5 million would be saved by consolidating 15 community colleges speaks directly to the lean nature of our colleges.”
The savings make up .4 percent of state funding for community colleges, which operate on $1.3 billion from the state.
The study also calculates up to $3.5 million in other savings from the merger, and $1.8 million saved through purchasing consortiums for a cumulative savings of $26.2 million over seven years.
John DeVitto, vice president of finance and administrative services, sees benefits to purchasing consortiums but said he’s “disappointed” in the merger recommendation.
“I think it does a disservice to the counties where these schools are,” he said.
The study defines small community colleges as those that have 3,000 or fewer full-time equivalent students. SPCC had 2,735 FTE students budgeted for the 2010-11 year, but has more than 12,000 students including non-credit and basic skills.
The 3,000 figure seems “arbitrary,” DeVitto said.
The study suggests merging smaller colleges with other colleges within 30 miles. Stanly, Montgomery and Richmond Community Colleges fit the bill, but Stanly is the only one with more than 3,000 FTE students at 3,040.
Of 58 state community colleges, 20 operate on multiple campuses. SPCC operates in Monroe and Polkton. It’s already difficult to serve two diverse counties, DeVitto said.
One board of trustees oversees SPCC, but members come from both counties. Sidor splits his time between both campuses.
“It would be very difficult to sustain the type of outreach and support for local businesses and industry by creating this huge surface area,” Sidor said.
Sidor moved from Daytona State College in Florida to SPCC, attracted to North Carolina’s community college system.
Daytona State College represents dramatically different areas, from an oceanfront retirement community to a blue collar community near Orlando.
“We ran on a one-college concept, and as a result, we didn’t deliver some programs that we probably should have,” Sidor said.
If community colleges merge, he said, leaders might find it hard to raise funds “for something that isn’t perceived as a college owned and controlled by the local community.”
A county far away wouldn’t have “a vested interest” in SPCC, DeVitto said. Consolidating state departments in Raleigh could probably save more than the $5.1 million in question.
“Local control is essential for addressing local needs, particularly in the areas of job creation, training and economic development,” Gov. Bev Perdue said in a press release.
Perdue pointed out several job placements made possible through partnerships with community colleges.
“Take away the community colleges and where will those businesses turn for workers?” she asked. “What other state — or country — will get our jobs instead?”
Counties with smaller colleges also have higher average unemployment than the current state average, Ralls wrote.
Sidor isn’t too worried about his job and considers SPCC administrators losing their jobs “a very remote possibility” given the opposition to the merger. Former SPCC President John McKay was also opposed.
Two alternative models
Creating regional colleges or adopting a centralized system could also boost efficiency, the study found.
A regional system would include one college in each defined region with several campuses throughout. The system would have one chancellor and a board of trustees. Other colleges in the region would become satellite campuses overseen by a provost. Each campus would have a local board of advisers.
The regional model, however, could result in separate community college systems or add another level of bureaucracy, the report reads.
A centralized system, on the other hand, would allow the State Board of Community Colleges to govern all colleges, which would answer to the system president. The system office would handle all administrative activities, and the State Board would make many decisions about college operations. Boards of trustees would become boards of advisers. This model would create one set of policies and procedures, use the same technology plans and a standard salary scale.
At the same time, the report reads, college presidents would be limited in decision-making, and local funding could be jeopardized.
STUDY DETAILS
The N.C. General Assembly’s Program Evaluation Division completed an efficiency study in June, outlining recommendations to merge 15 community colleges and combine purchasing power. Here are some study highlights.
- The Program Evaluation Division looked at funding, enrollment and organizational charts. It surveyed college presidents and trustees, visited 11 colleges, talked to county managers and interviewed stakeholders and system office staff.
- Colleges range in size from 624 full-time equivalent students to 16,200 at Central Piedmont in Charlotte. Colleges with fewer than 3,000 FTE students are more costly at about $336 more per student.
- Combining administrative functions saves money. Local control means organizational differences and a reduction in efficiency, the study reads. Each college, for example, completes its own payroll and submits reports to meet federal and state requirements.
- Administration includes executive management, financial services, general administration and administrative information services. It does not include student support, instruction or economic development activities.
- State contracts offer volume pricing on items such as office supplies and furniture, but some products aren’t covered. Colleges could collaborate on purchasing test materials and software support.
- The state is the largest contributor to community colleges at 55 percent of their funding. Twenty-seven percent comes from counties, and 17 percent is from tuition. Only 1 percent is federal funding. The state budget — nearly $20 billion — cuts about $115 million from state community colleges.
- Merging colleges and purchasing consortiums could save the state $26.2 million over seven years.
