San Juan College projecting budget deficits

Joshua Kellogg
KSJE General Manager Scott Michlin is seen on April 24 during a show at the radio station in Farmington. The station is shifting to a listener-supported business model.

FARMINGTON — San Juan College officials are working to resolve a budget deficit of about $1.38 million for the current school year and a possible shortfall of $2.2 million in revenue for the upcoming school year.

The information was presented by Ed DesPlas, the vice president for administrative services, to the San Juan College board members during a special work session Tuesday night.

DesPlas said in an interview Thursday the decline in revenue from the oil and gas production tax, a drop in enrollment and a loss of funds from the state contributed to the need to make the approximately $1.38 million in cuts for the current fiscal year ending on June 30. The state has also been hit hard by declining oil and gas revenue.

The current fiscal year budget for the college is about $53.49 million and the cuts would bring it down to about $52.11 million, DesPlas said. The board is expected to vote on budget adjustments during the April 26 board meeting.

The drop in tuition, general fees and workforce development revenue is estimated at about $822,000 and the loss in oil and gas production tax revenue is estimated at $350,000, according to DesPlas’ presentation.

The college also was notified in early March it would not receive about $151,000 in state funding, DesPlas said.

According to DesPlas’ presentation, about $1 million in cuts will come from deferring a $501,000 payment into the college’s cash balance, postponing about $250,000 in technology purchases and the use of about $251,000 in undesignated funds to pay for physical plant projects.

“If we didn’t do anything, we will overspend the budget at year end,” DesPlas said.

DesPlas also discussed the nearly $2.2 million projected shortfall in revenue from the current fiscal year budget of about $53.49 million dollars down to an initial budget estimate of $51.27 million for the 2016-2017 school year.

For the next fiscal year, the college is projecting a loss of about $660,000 in state funding, about $550,000 from a decline in tuition and fees revenue, and a drop of about $175,000 in oil and gas production tax revenue, according to DesPlas’ presentation.

DesPlas’ didn’t have exact figures but he estimated student enrollment dropped by 10 percent and student credit hours declined by 2 percent for the current school year.

The college board is not interested in increasing tuition and fees next year after implementing an increase this school year, board member Byron Manning said.

“We don’t want to put it on the back of the students,” Manning said.

Some of the recommended changes to reduce expenses include adopting a new IT management services contract that would cost about $566,000 less than last year, reevaluating positions when an employee leaves, and possibly closing the KSJE radio station.

Board members discussed the possibility of closing the radio station last year but kept it open with a requirement that the station raise about $65,000 in grants and underwriting.

Scott Michlin, KSJE general manager, said the station raised about $35,000 and also has increased student involvement in on-air projects.

“Obviously I’m not happy about the possibility,” Michlin said. “I know the college is facing some real challenging budget problems.”

Michlin said the radio station has started researching different options about possibly changing its operations to cut expenses.

Joshua Kellogg covers education for The Daily Times. He can be reached at 505-564-4627.