Government of New York
Minutes of the Erie County Fiscal Stability Authority MeetingAugust 20, 2018Present: Chairman James Sampson, Director Dr. Barry Weinstein, Director Craig Speers. Director Cathleen Creighton, Director Oliver Young and Executive Director Kenneth VetterChairman Sampson:Welcomes guests to the meeting of the Erie County Fiscal Stability Authority Board Meeting and calls the meeting to order. The sole item of business today is to review the Erie Community College and four-year plan.“We’ll be hearing from Dr. Hocoy in a moment after we finish some administrative business.”“All members should have minutes from our last meeting in their packet and I would ask board members to review them. I would ask for a motion to accept the minutes of the previous board meeting, and a second.”Director Weinstein moves to approve, Director Creighton seconds and the board votes unanimously to approve the following resolution:Resolution No. 18-09APPROVING MINUTES FROM THE MAY 16, 2018 MEETING BE IT RESOLVED that the Erie County Fiscal Stability Authority approves the minutes of its MAY 16, 2018 meeting and affirms eight resolutions numbered 18-01,18-02,18-03, 18-04, 18-05, 18-06, 18-07 and 18-08 that were approved on MAY 16, 2018.This resolution shall take effect immediately.Chairman Sampson:“I would ask Dr. Hocoy to come to the podium to provide highlights of the College’s budget and financial plan. Everyone has received a copy of the supporting documents and the report the staff has put together, so all members should be familiar with the information. We’d like to give you the opportunity to provide your view of the 2018-2019 budget and financial plan. Then folks would have the opportunity to ask questions and it is our intent to consider a resolution to accept the budget and financial plan”President Hocoy:“Good morning. I am happy to address this august body one more time. I think it has been a year since I last appeared here. The focus for the year was to rebrand the college from ECC, which was a point of derision, to SUNY Erie – Efficiency, Relevance, Innovation and Effectiveness. The image was impacting our ability to attract students, as well as our ability to deal with corporate partners and the ability of our students to get jobs. If you come from a school that’s known as Easy Credit College, you are probably less likely to get the job than someone else.”“In terms of Efficiency, I realized, when I arrived we had been out-of-balance for a number of years. I ordered a program of fiscal austerity. I froze all hiring from July 1st. For several months, I made some cuts. Through vacancy controls and cuts, for fiscal ’17 we were able to put $3 million back into the reserves. For my own cabinet, I eliminated four positions. For fiscal year ’18 we had a surplus of over $3 million, $2.4 million of which went to the new ERP system - which is an investment, with a $4 million savings over a 10-year period. Fiscal year ’18, we managed to put $1.5 million back into the reserves even after paying for the new ERP. Fiscal year ’19 is the first year there has been a balanced operational budget without raising tuition or dipping into our reserves. That’s something our team is quite proud of.”“In terms of Relevance - we do everything with the student in mind. We have 20,000 individual students. We have three very different campuses and four unions, so we have multiple interests. The one unifying principle is – students first. We make it easier for students to stay on campus. We have free daycare, food pantries and free transportation. We have Men of merit for our men of color. We have a summer success academy between high school and college for orientation. That is successful for retention. We will be providing training in the trades.”“In terms of Innovation, we have done some very interesting things. We are one of the first community colleges to offer a program in Culinary Medicine. We have a partnership with UB and Roswell Park. Again, this is an innovative program looking at food as medicine. We were also one of the first community colleges to have a partnership with Facebook. They are providing the development and training for a certificate in Digital Marketing. It provides the skills to market on Facebook and Instagram. It serves small businesses, our students and Facebook. Helping them to become more ubiquitous, if that’s possible. It’s a win, win, win. We are looking to partner with Woz U, Steve Wozniak, of Apple, to build skills for growth companies, digital companies. For us to be innovative, we need to have programs for students for emerging economies. In Florida, there are thousands of acres of sugarcane trees. They have to walk those fields, instead of that, they are looking to have drones do it at a tenth the cost. They need a labor force in drones. That company would work with us to create the labor force for them.” “In terms of Entrepreneurship – we are partnership with private companies for things. My predecessor spend $60,000 for his inauguration. I partnership with TIAA Creff to underwrite the inauguration instead of spending that money. For our new STEM building, we have $400,000 coming in from Citi to name the student lounge. We have partnership with Tesla to provide solar panels for the new STEM building.”“In year two of my administration we are moving to SUNY Cares. C is for compassion. We haven’t had enough compassion with one another. It’s an extension of Students First. A stand for accountability. Part of the issue is that there isn’t enough accountability for those who fail students. Students are told they need courses they don’t really need to complete their major. Rev. Pridgen, the chair of the council, brought this to my attention. R stands for Relevance. In the south there are farmers, who wat to run their farms. In the city, we have city dwellers. There are also different learning styles.”“The E stands for excellence. We want a continuous improvement program. The S is for Students First. There are so many different interests. You can cut through them by simply focusing on the students. Next year, I’ll be able to report to you on how far we’ve gotten in terms of the agenda.”“My vision for the College is that it becomes a powerhouse, an engine for social and economic prosperity and change in Western New York. I tell the tale of two cities, not London and France, but Toronto and Buffalo. In 1901 the President used this region to highlight prosperity and innovation in the United States. Apart from him being shot, it was quite a success. In 1901 Toronto was half the population Buffalo was. Right now, Buffalo is half the population it was in 1901. Toronto is a metropolis of $6 million. So, what happened? Toronto in 1901 was just a swamp. I grew up in Toronto, so I know very well what happened. They invested heavily in public education. They saw that as the key to innovation and change. This year is the 200th anniversary of Amherst. If you go back to its founding in 1818, a hundred years later, 1918, this becomes the center of the America with the Erie Canal. For the next 100 years, we have an opportunity.”“As far as the recommendations of the report, I agree with all of them. I would encourage a posture of support and advocacy for the College. Obviously, there has to be scrutiny and criticism. I think that’s necessary, especially for your role. To advance the College, we have to find ways to make the College that engine of prosperity and social change for the region. There’s roughly a 1/3, 1/3, 1/3 split of our revenues. Tuition is supposed to be 1/3, but it is about 44% right now. Revenues from the state are supposed to be about a third, and that’s at about 31% and 1/3 is supposed to be from the county. Well, we get from 17to 19%. Our buildings are a mess. If you’re wondering why we are paying between $16 to $17 million in chargebacks each year. I met with the Superintendent of the Williamsville Schools, who walked through our campus and laughed, he said – have you been through our high schools, thorough our grade schools? This isn’t even a glorified grade school. That’s why they’re going to NCCC. That’s why they are going out of county. We still have lockers the preservation society is pressing to keep, from the 1950’s.”“If you want this region to prosper. If you want your children to have jobs, and want this county not to suffer some of the social ills like crime, this is where you invest. I think this is the biggest bang for public dollar.”Chairman Sampson:“Any questions?”Director Speers:“I couldn’t agree with you more about the campuses. The north campus especially, the infrastructure of the classrooms is incredibly old and outdated. The south campus is almost like a Rubrics maze. It’s almost dehumanizing to go into those structures. I agree that you really need to be modified. I know that’s going to take a lot of money.”“I wanted to ask you about, the housing initiative and housing availability. I know that’s been an advantage for NCCC, Monroe Community College and Genesee Community College over ECC. How is that going with the housing initiative?”Dr. Hocoy:“In my view, students go out of Erie County to get the college experience. They want live-in dorms. We should be about to provide that for them right here. They shouldn’t have to go to Genesee, or Monroe or Niagara to get that experience, so we are experimenting. My board is kind of luke warm with investing in residences. It is not a revenue generator. At best, you break even. It’s supposed to attract students. Our athletics don’t make money.”“Various other things don’t make money, but they attract students. We have started with Canisius. We are talking with Daemen in the north and Hilbert in the south. All have empty dorms. Instead of asking for a new building that could be a white elephant in a few years, we are testing the waters first to see if there is a demand. We are doing this in a very economically prudent way. I’ve been able to leverage the crisis among the private colleges. There’s too many Catholic Colleges and Universities in WNTY. I think there are 27 colleges and universities in WNY. There is a diminishing high school stream. People are having fewer kids. We look at Hilbert that is down to 700 students. But, that becomes an opportunity for us. They have empty residences and they have students who can’t afford a private 4-year institution. In my first year, we have come to articulation agreements with Daemen.”“They have dual registration. They are A Daemen and SUNY Erie student. So, after two years, they go straight to Daemen. All credits transfer. Why would Canisius want to give us residences at a very good rate? They are hoping those students, after two years, would want to transfer to Canisius. The privates have someone who comes to then that they already know. I think it’s a win, win, win. The other thing about residences is that we need to look beyond our county for students. For instance, I’ve doubled down on distance learning. We can now offer our courses in 48 states. There was some comment in the draft that we don’t have the reputation. I would argue otherwise. We have some students in our auto tech program from Minot South Dakota. They pay for this student to go to SUNY Erie for 2 years, then go back to work at that garage. The other reason distance learning is important. In your report, you’ve said distance learning is a saturated market. It isn’t. Every day there is out there, who is a working adult who cannot come to a classroom, but they can fit a half hour in during lunch or after they tuck their kids into bead. Out the 27 local colleges and universities, there is only one that increased enrollment last year – Bryant and Stratton. They did it completely online. We offer that some product for 1/4th of the price. We are part of the SUNY system and they can get aid.”Director Creighton:“How does that work with Empire State College? Do you work with them?” Dr. Hocoy:“That is separate. The way it’s configured now is that each SUNY College is on their own. We have our own fiduciary body – our board. We are often competing for students. Let the best college or university win. I believe we could benefit from some sort of collaboration. For instance, NCCC they want to build a $35 million STEM building, and we just opened a $30 million STEM building. We could benefit from shared back office services, like shared financial aid.”Director Creighton:“So, with the current arrangement, the Delevan Townhouses are on the shuttle line. Are you marketing that?”Dr. Hocoy:“We now run shuttle systems to all the campuses. The idea is that North and South would have their own residences at some point. Right now, those students can access any campus. Even apart from residences, we have shuttles between all 3 campuses.” Chair Sampson:“Residential units – your report indicated a revenue of about $800,000. What is the expense associated with that revenue?”Dr. Hocoy:“We’re not exactly sure how it’s going to pan out. We aren’t going to make a whole lot of money from it. It is slightly in the positive right now. We don’t know exactly how many students will be there. Canisius is giving us a great deal. They are providing the RA’s, their library and all their services. And, we will have a place for our out-of-state athletes to land. If you come from a whole-person approach, it enhances the student experience. Our women’s soccer team came in 2nd and our men’s basketball team came in 6th last year. We need residences too to attract international students.” “They pay more than in-state students. It so happens that the Chinese inventor of ADU, which is the Chinese equivalent of Google and Amazon combined, went to UB, so there’s a connection there. There is a constant stream of Chinese students who want to go to UB, but the English proficiency score at UB is in the 700’s. Ours is in the 400’s. There are a lot of Chinese students who need a place to improve their English if we had residences, we could attract them to the College.”Chair Sampson:“Do you have a profile of students who would use the residences?”Dr. Hocoy:“We have over 100 international students now, student athletes from out-of-state. I think it’s 30 different states. Those profiles are very different. We have a student from India who is training for the Olympics.”Chair Sampson:“At this point, do we have a breakdown of students who are going to take advantage of the Canisius experience?”Dr. Hocoy:“The student-athletes right now are the number one.”Chair Sampson:“FTE’s obviously balance the budget. Do you have an idea yet, what the Fall semester looks like?”Dr. Hocoy:“Obviously, this is the big crunch right now. We are having open houses and attracting students. Our projection is right on right now. We are expecting flat enrollment. We have eight 100% online programs. In terms of enrollment, it’s going to be flat. Flat is good. if you compare us to anywhere else, in the country, enrollment is down.”Chair Sampson:“About a year ago, Middle States found two deficiencies, one educational and the other, to our point here, financial. They are coming back with a report soon on the outcome, probably October or November. Can you tell me what’s happening there to be in compliance?”Dr. Hocoy:“The two compliance issues are assessment and fiscal. We have been unable to balance the budget without raising tuition or fees or dipping into reserves, over what’s happened over the last three fiscal years. They have told us, unofficially, that is not a big area of concern anymore. Assessment, there were a multitude of reasons they have not done assessments at a course and program level. For instance, technology needs to do an assessment. We’ve talked to the Faculty Federation and all the unions and we think that we will get off warning in the Fall with regard to assessment as well. The early indication from phone calls is that we’re in good shape.”Chair Sampson:“Any other questions?”Director Creighton:“A comment. We helped with the investment in ECMC, which is a good model. ECMC went from a laughing stock to someplace people want to go to. I don’t know how we can work with the county to focus its attention on SUNY Erie. I think that’s something we can look at.”Dr. Hocoy:“I couldn’t say it any better. We’ve asked for $1.5 million in retirement incentives for people who’ve been there a while. If they would want to take that on, I think it would help us organizationally. So that’s one area we’re asking for right now. That would facilitate the culture of change. Anything you could do or say would be greatly appreciated.”Director Young:“ECC was part of the SUNY system and you changed the name to reflect the new direction. Are your students able to participate in the free tuition program.?”Dr. Hocoy:“SUNY Erie is one of 64 public institutions in New York State. Every institution can apply for the Excelsior Scholarship, which is free tuition at any public institution. There is a string involved. You have to stay and work in the state for two years after graduation. From the first year, of over 20,000 individual students and 11,000 FTE’s. Of all of them only 194 were eligible for the program because there a lot of stipulations. Our typical student is 27 years old and works ? time outside of coursework. We lose students to UB now because they get free college tuition. So, the program hurt us. To answer the question, very few of our students are eligible to apply.” Chairman Sampson:“Dr. Hocoy, I’d like to invite you back before the beginning of the next semester to have you hopefully, trumpet all the accomplishments you’ve had over the next semester.”Chairman Sampson:Entertains a motion to accept the 2018-19 SUNY Erie budget and associated financial plan.Motion: Director CreightonSecond: Director WeinsteinUnanimously approvedResolution No. 18-10COMMENTING ON THE 2018-19 SUNY ERIE COLLEGE BUDGETWHEREAS, Chapter 182 of the New York Laws of 2005 created the Erie County Fiscal Stability Authority (“ECFSA”) to serve as a corporate governmental agency and instrumentality of the State of New York, and as a public benefit corporation to “oversee [Erie] County’s budget, financial and capital plans; to issue bonds, notes or other obligations to achieve budgetary savings and to finance short-term cash flow or capital needs; and, if necessary, to develop financial plans on behalf of the County if the County is unwilling or unable to take the required step toward fiscal stability;” andWHEREAS, section 3951 of the New York Public Authorities Law (“Public Authorities Law”) defines a “covered organization” as “any governmental agency, public authority or public benefit corporation which receives or may receive moneys directly, indirectly or contingently from the County;” andWHEREAS, the ECFSA Board of Directors (“Board”) and staff have reviewed the 2018-19 SUNY Erie College (“ECC”) budget document, which was adopted by the SUNY Erie Board of Trustees and subsequently approved by the Erie County Legislature; andWHEREAS, the ECFSA Board and staff have identified a number of financial risk items for the College:A high reliance on tuition revenuesEnrollment challenges in a declining traditional-student environmentRetention rates significantly lower than its peers and lower than its ultimate goalExpectations of Sponsor Funding that are higher than in the County’s financial planThe College’s Capital program over the next six yearsContinued use of fund balance as a revenue;NOW, THEREFORE, BE IT RESOLVED that the ECFSA does view the 2018-19 budget as in balance and achievable. The out-years of the financial plan are achievable, but do come with a number of significant risks.This resolution shall take effect immediately.Chairman Sampson:“May I have a motion to adjourn? Motion by Director Weinstein. Second by Director Creighton. The Board votes unanimously to adjourn.”Respectfully submitted, ____________________James Sampson, ChairmanAugust 20, 2018 ................
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