North Country Community College President Joe Keegan, left, and SUNY Chancellor John King walk through the college campus during a visit from King on March 24. (Enterprise photo — Aaron Marbone)

MALONE — Representatives from North Country Community College addressed the Franklin County legislature prior to their regular meeting Thursday at the courthouse and presented a tentative budget of $14,956,472 in operating costs and $300,000 in capital spending for 2023-24.

Joe Keegan, president of the college, and Erik Harvey, interim CFO, appeared before legislators to present the spending plan and will do so again before the Essex County Board of Supervisors this week.

“Thank you for having us, and thank you for your ongoing support as the college of Essex and Franklin,” Keegan told lawmakers at the start of the presentation. “We’re coming off a really good year. For a college that punches above our weight, we had four staff recognized as SUNY Chancellor’s Award winners.”

He then turned the floor over to Harvey for a look at the proposed budget, who said he would go over the highlights of the spending plan before opening the presentation up for discussion.

Harvey said the operating budget looks very similar to recent years and is “a couple hundred thousand lower in expense than we would usually anticipate.”

He said enrollment is expected to be 951 average annual full-time equivalent enrollment (AAFTE), up by 50, or 6%, from 2022-23. Core enrollment is 801 AAFTE with the Second Chance Pell prison program adding another 150 AAFTE. Out-of-area enrollments are expected to decline to pre-pandemic levels. Harvey said out-of-state enrollments are anticipated to be 4% higher than 2022-23, while in-state enrollments will likely fall by 7.5% compared to fall of 2022.

“We recognize that in order to solve our budget deficit we’re going to need to work on both our expenses — get them more in line with the volume of students that we’re servicing — and also we’re going to have to grow the revenue line,” Harvey told lawmakers. “We’re going to have to adapt and change to what people are looking for and what the demand is out there, and what the counties are needing.”

He said for the past 10 to 12 years, the college has seen a 5% to 10% reduction in enrollment going into every fall semester.

“We haven’t solved that riddle, so we have to anticipate that going into next fall,” Harvey said.

Early estimates on incoming registrations for core programs indicate those registrations will come in level with fall 2022 at the same point in early June of that year, and conservative assumptions on planned expansions are “layered on top.” He said while core registrations remain level, new initiatives have not gained much traction, adding that the fall semester remains 12 weeks away.

The expansion is related to several new initiatives at the school, including maintaining a modest increase in the Akwesasne student population, an increase in nursing course capacity to pre-pandemic levels, and the ramping up of emergency medical technician programs. Other intiatives include maintaining the early childhood education pathway momentum, a nursing program expansion expected to begin in January of 2024, and new offering related to entrepreneurship, health care administration, digital design and advertising, and teaching assistant certifications.

“We’ll see the college transform over the next four to five years into these new offerings and away from some of the traditional things that the demand is, honestly, dropping from,” Harvey said.

According to Harvey, the 2023-24 budget reflects a $436,000, or 3%, revenue decrease and a $179,000, or 1%, decrease in spending over the 2022-23 forecast, “this generating a neutral budget after transferring $691,000 from the unrestricted fund balance. He said that decrease in revenue is largely due to Higher Education Emergency Relief Fund revenue lost when that COVID era initiative was discontinued this year.

Tuition and fees are expected to rise by $297,000, or 5%, compared to 2022-23, but Harvey said that will be offset by a larger chargeback rate for students from outside Essex or Franklin counties. For the third year in a row, tuition rates are frozen for 2023-24, addressing calls that higher education costs in New York state are too high for students.

Harvey said the college continues to operate “under caution.” While much of the pandemic-related uncertainty has abated, Harvey said sentiment toward higher education remains low and is creating a barrier to a rebound in enrollments. No discretionary spending is assumed in the spending plan and the college will not invest in further new initiatives unless those initiatives are expected to deliver an immediate return. Provisions have been made in the budget for rising health and cybersecurity insurance costs, necessary technological upgrades, and rising energy costs, Harvey said.

The unrestricted fund balance, projected to end in August of 2024 at $5 million, represents 34% of total unrestricted net operating costs (NOC). For perspective, Harvey told lawmakers, SUNY recommends a fund balance NOC of 15%, which college stakeholders believe is too low.

“It’s a bigger war chest, but it will go away very quickly if we continue to operate at a half million or $750,000 deficit,” Harvey explained. “It’s not something that we can continue on with.”

He said according to his predictions, by 2025 0r 2026, the school would “start to feel that pain” and be very low on cash.

“That’s not a place we want to be.”

The budget avoids any workforce reductions, Harvey said, but positions are not being backfilled when workers leave the college.

“We have to be mindful that when we get good people on staff, it’s hard to replace them,” Harvey told lawmakers. “We’ve been very careful of that.”

Harvey and Keegan requested a $100,000 increase in funding from both counties, which would be the first increase since 2014-15.

“An increase of $200,000 would help the college continue its work and, in a very real sense, help out operations, including retaining positions that are vital for our mission,” a handout distributed to lawmakers read.

“We know we would be a good steward of the extra funding,” Harvey said.

In discussion following Harvey’s presentation, Lindy Ellis, D-Saranac Lake, asked what steps the college has taken to raise awareness of new initiatives and programs.

“There’s several approaches,” Keegan said. “We’ve got marketing campaigns on every one of them, outreach to let people know about them, direct marketing. There’s a host of things we’ve been doing to get the word out.”

He added that with 12 weeks remaining before the start of the fall semester there remains significant room for enrollment to grow, and steps to raise awareness of new initiatives will continue.

“We’ve really tried to align our programming with county workforce needs and employer needs,” Keegan said.

The next step in the NCCC budgeting process, as it relates to Franklin County, is a public hearing, which lawmakers scheduled in a resolution for July 26 at 10:30 a.m. in the chambers of the legislature on the fourth floor of the courthouse.