www.rethinkerie.com
What is REthink Erie? • Unprecedented collaboration of business, government, economic development, education, social service and philanthropic organizations • Formed to look at region’s workforce, economic development, and education needs • Structured process involving more than 50 community and business leaders
Why REthink? Direct correlation between educational attainment and income levels in Erie County. • High school diploma attainment: above state and national averages • College attainment (BA or higher): below state and national averages • Per-capita income: below state and national averages • Poverty level: higher than state and national averages Source: U.S. Census Bureau
Why REthink?
Is There a Need Here? • Since 2008, more than 50 REthink Erie volunteers have devoted countless hours to understand our region’s challenges: – Workforce – Economic Development – Educational
Is There a Need Here? • Every day 500+ skilled workforce positions unfilled • 57% of all job opportunities 2006-2016 will require some post-secondary education • Most populous PA area without a community college • Our tax dollars support the other 14 PA public community colleges and benefit their communities
PA Community Colleges No community colleges
14 community colleges (with 26 campuses and 79 instructional sites)
Is There a Need Here? • Is a community college the RIGHT solution to fill the educational and training gaps in OUR region? Based on what we’ve learned, we believe the answer to that question is…
YES
Recommendations 1. Create a regional community college with a goal to begin service as soon as practical. 2. The college should offer both career and college transfer options. 3. Establish a regional governing system that is accountable to stakeholders. 4. Establish partnerships where it is mutually beneficial. 5. Look for innovative ways to help finance the college.
What is a Community College? • Provides two-year degrees, certificates, adult training and education, life-long learning • Offers remedial and “early-start” education • 23%-42% of students transfer to four-year colleges • Accessible, affordable, flexible: – Accessible: High-school diploma or GED; no entrance exams, test scores – Affordable: Average PA annual tuition is $2,565, and most students work full- or part-time – Flexible: Courses to meet community’s needs
Where Are We Now? • • • •
Reviewing the pro forma financial statements Undertaking an economic impact analysis Exploring multiple funding streams Conducting research on Pennsylvania community colleges • Developing a community college application
PA Community College Research — Study of Pennsylvania’s Community Colleges — Fourteen (14) community colleges in Pennsylvania Twelve (12) participated in this survey • • • • • • • • • • • •
Community College of Allegheny County Community College of Beaver County Bucks County Community College Butler County Community College Delaware County Community College Harrisburg Area Community College Lehigh-Carbon Community College Luzerne County Community College Montgomery County Community College Northampton Community College Pennsylvania Highlands Community College Westmoreland County Community College
PA Community College Research — Population and Students (FTE) — • • • • • • • • • • • •
Community College of Allegheny County Community College of Beaver County Bucks County Community College Butler County Community College Delaware County Community College Harrisburg Area Community College Lehigh-Carbon Community College Luzerne County Community College Montgomery County Community College Northampton Community College Pennsylvania Highlands Community College Westmoreland County Community College
Population 1,223,411 175,736 623,205 182,901 325,752 512,762 398,015 313,020 775,688 291,306 146,967 366,440
FTEs 17,255 2,347 11,586 3,718 9,524 16,747 6,535 6,069 10,575 9,464 1,533 6,071
PA Community College Research — Local Sponsor Contributions — All community colleges in Pennsylvania receive their local sponsor contributions from property tax revenues Erie County will have access to 2% of table games revenue (estimated at $1.5 million per year) if the proposed community college is approved by the State Board of Education not later than January 1, 2014
PA Community College Research — Local Sponsor Contributions — Local sponsor contributions range from 6.85 to 26% of the responding community colleges’ total budgets The majority (10 out of 12 community colleges) receive between 6.85% and 15% of their total budgets
PA Community College Research — Community Colleges/Sponsors Most Like Erie — • • • • • • • • • • • •
Community College of Allegheny County Community College of Beaver County Bucks County Community College Butler County Community College Delaware County Community College Harrisburg Area Community College Lehigh-Carbon Community College Luzerne County Community College Montgomery County Community College Northampton Community College Pennsylvania Highlands Community College Westmoreland County Community College
Population 1,223,411 175,736 623,205 182,901 325,752 512,762 398,015 313,020 775,688 291,306 146,967 366,440
FTEs 17,255 2,347 11,586 3,718 9,524 16,747 6,535 6,069 10,575 9,464 1,533 6,071
PA Community College Research — Operating Budgets — Operating budgets range from $9,404,244 to $70,000,000, with five of the seven having a range between $9,404,244 and $36,432,834 Local sponsor share of operating costs ranges from 5.75% to 15.2%, with dollar amounts ranging from $900,000 to $5,897,500 Five (5) have a local contribution for operating costs below 10%
PA Community College Research — Capital Budgets — Capital budgets range from $900,000 to $14,000,000 for the 12 responding community colleges, depending on size of debt service, leases, and other capital expenses. The local share devoted to capital costs for nine (9) schools that responded to this question ranges from 2.1% to 46% The proposed local community college will lease space and equipment as feasible to deliver programs that our region needs, keeping downward pressure on capital spending.
PA Community College Research — Other Funding Sources — Grants — federal, state, and local Private endowments and donations Foundations for scholarships and capital campaigns Enterprise funds — income from bookstore, food, events, etc.
PA Community College Research — Other Post-Secondary Options — Post-secondary institutions exist in all community college sponsoring areas The number of institutions varies depending upon the size and population of the areas
What’s Our Investment?
MYTH $109 million to launch community college
What’s Our Investment?
MYTH $109 million to launch community college
What’s Our Investment?
MYTH $109 million to launch community college
What’s Our Investment?
MYTH $109 million to launch community college
FALSE
What’s Our Investment? Total Financial Projection | Year 1 Operating Revenues Expenses Income (Loss)
$2,925,831 $5,672,499 ($2,746,669)
Non-Operating State Appropriations Revenue Local Appropriations Revenue Net Operating Revenue
Total Income (Loss)
$1,508,580 $1,246,575 $2,755,155
$8,486
What’s Our Investment? Total Financial Projection | Year 2 Operating Revenues Expenses Income (Loss)
$4,041,793 $6,799,091 ($2,757,298)
Non-Operating State Appropriations Revenue Local Appropriations Revenue Net Operating Revenue
Total Income (Loss)
$1,529,440 $1,246,575 $2,776,015
$18,717
What’s Our Investment? Total Financial Projection | Year 3 Operating Revenues Expenses Income (Loss)
$5,182,444 $8,365,150 ($3,182,706)
Non-Operating State Appropriations Revenue Local Appropriations Revenue Net Operating Revenue
Total Income (Loss)
$1,932,920 $1,246,575 $3,179,495
($3,211)
What’s Our Investment? Total Financial Projection | Year 4 Operating Revenues Expenses Income (Loss)
$6,175,544 $9,664,652 ($3,489,109)
Non-Operating State Appropriations Revenue Local Appropriations Revenue Net Operating Revenue
Total Income (Loss)
$2,253,460 $1,246,575 $3,500,035
$10,926
What’s Our Investment? Total Financial Projection | Year 5 Operating Revenues Expenses Income (Loss)
$7,224,855 $10,868,534 ($3,643,679)
Non-Operating State Appropriations Revenue Local Appropriations Revenue Net Operating Revenue
Total Income (Loss)
$2,575,100 $1,246,575 $3,821,675
$177,996
What’s Our Investment?
REALITY
What’s Next? • Application needs “local sponsor” approval • Application is sent to the State Board of Education; reviews by Governor and public • Application is outline plan; Board of Trustees prepare final “120-Day Plan” after college is approved by State
What Will it Look Like? • Students: 700 first year • Programs: What’s needed first? Fill the gaps – – – – – – – – – – –
Biotechnology Tech CAD/Mechanical Engineering CNC Machining Computer Support Tech Electronics Tech GIS/Mapping Tech Health Information Tech Web Tech Management Tech Parks and Natural Resources Welding Seven of the 11 proposed occupational programs could be offered using existing Erie County Technical School equipment and facilities
What Will it Look Like? • Funding: Three sources – state, local sponsor and student tuition. – Operating: Local sponsor typically contributes 7%-15%. The remainder is funded by state, tuition and other funding sources. – Capital: State and local sponsor share any capital expenditures on a 50-50 basis. However, use of existing space and equipment will limit capital expenditures.
What will it look like? – New Pennsylvania Table Games Law directs 2% of local table games revenue to establish and maintain a community college in Erie County. • Early estimates are that this 2% will generate approximately $1.5 million per year.
– The money projected is enough to launch a local community college, making the best use of existing space and delivering programs to address the education and training needs of business community and residents. – Other revenue sources, including grants and endowment funding, are also being explored to supplement table games funding.
FAQs • Why do we need another college? We have fine ones already. – Not “another college.” – Community colleges have certificates, less-expensive twoyear degrees that transfer credits, and life-long learning programs. – Not everyone wants or needs a four-year education right away. – Some can’t meet four-year entrance requirements (grades, test scores) or pay $14-$24,000 a year.
FAQs • Why start a new community college? Why not be a satellite of an existing college? – We talked to three. – Double tuition for out-of-county students. – Start with transfer programs only; community pays for specialized or occupational programs. – No local Trustee; “advisory board” only. – Financially benefits college’s home county.
FAQs • What’s the difference between a community college and a “proprietary” school? – Different missions: Proprietaries are “for-profit” businesses – Community colleges have wide-range of needed programs, versus specialties of a proprietary. – Community colleges can offer training degrees with transfer credits; proprietary school degrees usually don’t transfer.
FAQs • Why train for jobs we don’t have? Businesses are closing down. – Community colleges help business attraction to increase the tax base, bring in new jobs. – Community colleges can educate for the next cycle of job growth and Baby-Boomer retirement. – If jobs are lost in one industry, community colleges can retrain for another (in Michigan, 36,000 auto workers being retrained).
FAQs • What is this going to cost me, the taxpayer? – The State requires “local sponsor” participation – Local sponsor typically funds 7%-15% (not 33%) – Estimates are for application purposes only: Trustees find funds and decide to lease or build. – In addition to funding available through table games, more than 10 other funding sources are being explored for creation and maintenance of a community college to prevent the community college from becoming a burden that would debilitate a local sponsor.
FAQs • I am retired and on a fixed income. I have no kids to send to college. What’s in it for me? – A better local economy benefits us all. – Businesses with stable, productive workforces stay in business and pay taxes. – Underemployed or less-affluent can be educated and get jobs, reducing social services and costs. – Community colleges help attract new businesses. – $1 invested = $3 back to the community. – And you may have always wanted to learn _____.
www.rethinkerie.com