Courier staff writer
ALAMOSA — Adams State University (ASU) continues to tackle its $2 million budget crisis, and the Board of Trustees is hoping things will start looking up in 2013.
On Friday during the board’s meeting, Office of Finance and Governmental Relations Vice President Bill Mansheim reviewed the university’s current budget numbers, explained how the $2 million shortfall come to be through a snapshot of prior budgets and provided a budget forecast based on historic trends and increased 2013 spring semester enrollment.
In addition to federal funding cuts to financial aid programs and the state reducing higher education dollars, Mansheim referred to the university’s recent campus expansion spending to identify monies lost. He said purchasing the former Evans Elementary from the Alamosa School District required a $850,000 down payment, which was a planned $500,000 operating loss. Out of the $2 million dollars the university is lacking, $1.1 million went to the building purchase, and two payments of $300,000 remain, one in January 2013 and the last in January 2014.
Although this large investment has taken its toll, Mansheim said the university is financially struggling ultimately because student tuition dollars are disappearing. With expectations hovering around $20 million, the university has only received $7.7 million in tuition as of November 30, marking a 9 percent deficit.
“The $2 million problem comes from a drop in tuition revenue and it is drawn down from cash,” Mansheim said. “We need to bring in more revenues.”
He targeted Federal Pell Grant changes for compromising student retention. Last year, the university received $7.1 million Federal Pell Grant dollars compared to $6.2 million this year, a 13 percent decrease.
ASU President Dave Svaldi added that between 80 and 100 students did not return to the university this year because of the grant changes, which makes for a loss of around $1 million.
A Federal Pell Grant, unlike a loan, does not have to be repaid. The grants are usually awarded to undergraduate students who have not earned a bachelor’s or a professional degree. The maximum Federal Pell Grant award is $5,550 for the 2012–13-school year and is subject to change annually. The award amount depends on financial need, cost of attendance, part-time or full-time status and intentions to attend school for a full academic year or less. The grant offers funding for courses taken at one school at a time and as of July 1, 2012 the federal government only offers awards for 12 semesters or the equivalent.
The Federal Pell Grant changes are one reason the university will drive a yet-to-be-determined tuition increase, Mansheim said. Although the increase should help the university’s budget, there is fear it will deter enrollment.
“Low income students are learning about raising tuition and they don’t believe they have the opportunity,” he said.
He added that lower middle class students that don’t qualify for government dollars would take a hit regardless of the university’s above-average scholarship program. Last year, the ASU Foundation and the Grizzly Club provided $1.8 million in scholarships with the club raising $400,000 last year for the program. So far in 2012, the university has spent $750,000. Overall, the university provides around $5.4 million into scholarships, which is about $1 million more than other state universities.
“We saw 11 straight semesters of growth until we hit this bump in the road,” Mansheim said. “We now know what the problem is and we can take it into consideration as we plan.”
With the state proposing higher education budget increases that would only add $648,000 to the university’s 2012 $10,000 allocation and a 2 percent increase to its financial aid, Mansheim said he believes the forecasted 2013 spring enrollment numbers will begin to turn the crisis around.
“It is looking better for the spring,” Mansheim said. “It looks promising.”
Svaldi agreed, and said the university has to understand the ongoing situation and “be able to quickly change.”
For example, last month the university initially thought it would have to cut $1 million in personnel in the coming year’s budget. After realizing what that would mean for the school’s integrity, Svaldi said that plan has taken a new direction.
“That is not doable,” Svaldi said. “There will be reductions, but not a million.”
The university has already reduced its travel budget 10 percent for this year, and plans to scale it back another 20 percent in 2013 to save money. It will also evaluate open personnel vacancies to determine if they are crucial for a successful program.
In addition to the budget update, Mansheim also provided the board with capitol construction budget report.
He said many projects were facing budget hang-ups. In particular, the High Altitude Events Center had to scale back its $5.8 million budget to $3 million. The center’s parking lot has been resurfaced to meet general requirements, and the indoor track surface is now 10 millimeters thick instead of 13 millimeters for a cost savings of $300,000.
Campus housing projects are also being scaled back in addition to the baseball field construction, he added. The field will be without permanent restrooms that private donors are rumored to furnish.
The board will meet again in February when it intends to take action on the budget, setting up a final budget request for May.