Updated: Friday, April 9 at 6:45pm
Butler County Community College responded to the decision of Butler County Controller to withhold the quarterly $1.2 million payment to BC3, at a press conference Thursday at the Succop Theatre on the BC3 main campus.
According to BC3 legal counsel Jim Coulter, if the funds are not paid the future of the college could be in jeopardy. The college is considering taking legal action in conjunction with the Butler County Board of Commissioners, which filed suit against Controller Jack McMillin on Wednesday.
"The college will not be able to meet payroll and other expenses in early June, without dipping into restricted funds," said Coulter. "We would have to consider withholding vendor payments in June and collective bargaining payments in July."
If the lack of funding from the County continues restricted funds will be depleted by September 2010.
Executive Director of the Pennsylvania Commission for Community Colleges Diane Bosak expressed concern for BC3 at the press conference, which lasted an hour and was attended by approximately 250 people.
"The current impact undermines the fiscal integrity of the college," said Bosak, "it places the ongoing operations of the college in jeopardy, as well as putting its accreditation status in peril… Most importantly it impacts student access to programs and services at the college, and may deter students from attending in the future."
McMillin, who has been county controller since 1993 and was last elected in November running unopposed, refused issue the payment to BC3, stating that he has not seen sufficient documentation that BC3 is spending the money within Butler County and not at branch campuses such as the one in Mercer County.
McMillin requested that BC3 file an OMB Circular A-21 form.
"BC3 officials must agree to have a qualified party prepare what governmental accountants commonly refer to as an ‘indirect cost plan.' The document is prepared following certain procedures the federal government prescribes for colleges and universities. Such a document is needed in order to establish an accurate tuition rate for students attending the satellite campuses. Hopefully the calculated rate will approximate the current tuition rate paid by satellite campus students. I believe having an indirect cost plan in place may provide the college an additional advantage when seeking certain types of grants funded by the federal government," wrote McMillin in an e-mail to The Cube.
"All I need is someone from a position of power at the college to send me a two-sentence e-mail that they are pursuing this," McMillin told the Pittsburgh Tribune-Review.
In an e-mail to The Cube on Friday, James A. Hrabosky, BC3 Vice President for Administration and Finance wrote, "[The OMB Circular A 21] applies to federal government indirect overhead rates applicable to colleges and universities. This process is utilized when applying for federal grants. This process would not assist us in identifying whether our out-of-county sites are profitable or not. It would ONLY assist in obtaining grant funding that would help offset administrative costs in achieving the goals of a grant."
Hrabosky elaborated in the e-mail, "Several months ago, the College Board of Trustees asked the business office to prepare financial reports for our out-of-county sites. The subject came up again at a Board work session on February 1, 2010. Then, a report was presented at our public Board of Trustees meeting on March 17, 2010. This report is a public document. It clearly shows that our off campus sites are self-sustaining after applying a sufficient overhead rate of 45% of revenues."
The document states that the total 2009 revenue of Mercer and Lawrence County sites was $4,038,553. Expenses, excluding transfers, cost $1,583,445 and the 45% of revenues of overhead cost $1,817,349, for a net income of $637,759.
"On January 21, 2010, I requested certain information from college officials which would help determine whether such a situation does or does not exist. To date, I have not received a reply to that email," wrote McMillin.
"The County Controller directed the January 21st email to Julie Graham, the County Solicitor. I was copied on this e-mail, but never received any follow up e-mails from the County Solicitor or Board of Commissioners to provide this information. We report directly to the County Commissioners, they approve our funding," wrote Hrabosky.
As a community college BC3 receives funding from four different sources: the state, the county, tuition and fees and from various grants. Approximately 13% of that funding comes from the county, according to BC3's Convocation Budget Presentation of the 2009 semester.
Butler County had agreed with BC3 to allocate $4.9 million dollars in four different installments for 2010.
The county's funding of BC3 has remained the same over the past eight years, though the college's operating costs have risen 82% over that period.
In regards to BC3, "there has been no tax increase to the Butler County residents in this time," said Coulter at the press conference.
Students and instructors have voiced their opinions on the situation.
Maggie Stock, Butler mayor and BC3 Professor of Humanities and Social Sciences stated, "I support the College's position. I am only sorry that we need to invest time and money to have what should be, after more than 40 years, a routine procedure of transferring funds."
"BC3 is a valuable asset to Butler County in providing an educated, competent workforce and providing numerous activities, events and opportunities for everyone in the area," said Stock. "Elected officials are supposed to solve problems, not create them."
"Without accreditation the attendance of the school would fall and the college would struggle to stay open," said BC3 student Luke Homison, 28, from Cranberry Township who is majoring in biological sciences.
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