ARIZONA STATE LEGISLATURE
TO: Governor Fife Symington
Representative Mark Killian, Speaker of the House of Representatives
Senator John Greene, President of the Senate
FROM: Representative Dan Schottel
Senator Larry Chesley
DATE: December 1, 1995
RE: FINAL REPORT - JOINT LEGISLATIVE STUDY COMMITTEE ON
COMMUNITY COLLEGES
Attached is the above report for your consideration pursuant to Laws 1994, Chapter
351.
DAN SCHOTTEL
CO- CHAIRMAN CO- CHAIRMAN
HOUSE OF REPRESENTATIVES
RESEARCH STAFF LIBRARY
JOINT LEGISLATIVE STUDY COMMITTEE
ON COMMUNITY COLLEGES
FINAL REPORT
DECEMBER 1,1995
COMMITTEE MEMBERS
Representative Dan Schottel
Co- chairman
Representative Paul Newman
Donald Campbell
Gherald L. Hoopes, Jr.
Dennis Miller
Senator Larry Chesley
Co- chairman
Senator Gus Arzberger
John Even
Art Lee
Lourdes Moreno- Jeong
TABLE OF CONTENTS
PAGE
I. Formation and Mandate of the Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
II. Activities of the Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
LIST OF APPENDICES
Appendix 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minutes of meeting: January 5,1995
Appendix 2 . . . . . . . . . . . Community College District Formation and Funding Materials
Appendix 3 . . . . . . . . . . . . . . . . . . . . . Chart: Non Community College District Counties
Appendix4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I. FORMATION, MEMBERSHIP AND MANDATE OF THE COMMITTEE
The joint legislative study committee on community colleges was established consisting
of the following members:
1 . One member of the public appointed by the governor.
2. One public member from a county which is not within a community college district
and one member of the governing board of a community college or a designee from
a county with a population greater than five hundred thousand persons according
to the most recent United States decennial census appointed by the president of the
senate.
3. Two members of the state board of directors for community colleges appointed by
the state board of directors for community colleges.
4. One member of the board of supervisors in a county which is not within a
community college district and one member of the governing board of a community
college or a designee from a county with a population less than five hundred
thousand persons according to the most recent United States decennial census
appointed by the speaker of the house of representatives.
5. Two members of the senate appointed by the president of the senate who are not
of the same political party.
6. Two members of the house of representatives appointed by the speaker of the
house of representatives who are not of the same political party.
Members:
1. John Even Member of the public appointed by the
Governor
2. Dennis Miller Public member from a county which is not
within a community college district
appointed by the President
3. Donald Campbell Member of the governing board of a
community college or a designee
from a county with a population greater
than 500,000 persons according to the
most recent United States decennial
census appointed by the President
4. see Attachment # 4 Member of the State Board of Directors
for Community Colleges appointed by
the State Board [ apptd. 61201941
5. Lourdes Moreno- Jeona Member of the State Board of Directors
for Community Colleges appointed by
the State Board [ apptd. 61201941
6. Art Lee Member of the board of supervisors in a
county which is not within a community
college district appointed by the
Speaker [ Apache County]
7. Gherald L. Hoopes, Jr. Member of the governing board of a
community college board or a designee
from a county with a population less
than 500,000 persons according to the
most recent United States decennial
census appointed by the Speaker
[ Graham County]
8. / R) Cheslev Senator, Co- chair
9. / D) Arzberaer Senator
1 O./ R) Schottel Representative, Co- chair
11 ./ D) Newman Representative
The committee duties are as follows:
b Analyze community college district formations.
b Analyze population growth trends in rural communities.
b Analyze the needs for community college expansion and the barriers to such
expansions.
b Assess the fiscal effect of expanding community colleges.
b Develop legislative recommendations based upon the study.
II. ACTIVITIESOFTHECOMMITTEE
The committee met on January 5, 1995. Representative Ortega presented the committee
with background information and outlined the issues facing the committee. Staff presented
the committee with information on community college district formation and funding
( Attachment # 2). Material provided by staff included a chart that described the four
counties that did not have a community college district and the statutory requirements for
expansion into those counties ( Attachment # 3). Committee discussion examined the
formation of a community college district in Santa CNZ County and the impact of the North
American Free Trade Act ( NAFTA) on population growth and economic development in the
area. Additional discussion considered the ongoing fiscal needs of having an independent
community college district in Santa Cruz County.
Discussion of recommendations included enrichment of the Pima County Community
College services to Santa Cruz County. The committee acknowledged the benefit of
alternative methods of delivering education to those areas in need of community college
services without establishing a physical campus. The methods of delivery could include
education via satellite system, telecommunications and the use of existing public buildings
for alternative campuses.
The chairmen sent a letter to the committee members which summarized the committee's
activities. Additionally, the chairmen suggested that if there is no new business to be
discussed, there would be no further meetings. Objections or reservations were to be
conveyed to either co- chairman by October 20, 1995. As no objections were received,
the committee did not meet again.
ARIZONA STATE LEGISLATURE
JOINT LEGISLATIVE STUDY COMMITTEE ON COMMUNITY COLLEGES
Minutes of the Meeting
Thursday, January 5, 1995
9: 00 a. m., House Hearing Room 3
Members Present
Senator Gus Arzberger
Representative Paul Newman
Donald Campbell
Gherald L. Hoopes, Jr.
Gherzld L. Hoopes, Sr.
Dennis Miller
Lourdes Moreno- Jeong
Senator Larry Chesley, Cochairman
Representative Dan Schottel, Cochairman
Members Absent
Art Lee
John Even
Staff
Martha Dorsey, Senate Research Analyst
Trisha Kowes, House Research Analyst
Keely Varvel, Research Analyst, Senate Minority Staff
Chr~ stinaA rzaga- Williams, Research Analyst, House Minority Staff
Cochairman Schottel called the meeting to order at 9: 10 a. m., introduced himself and
Senator Chesley as Cochairmen of the Committee, announced that Representative
Ruben Ortega was available to speak to the Committee, as well as Representative Sue
Lynch. Chairman of the Select Committee on Community Colleges, and asked that all
committee and staff members introduce themselves,
Committee Member Introductions
Senator Chesley identified himself as serving on the Appropriations Committee; Senator
Arzberger as representing the District 8 counties of Cochise, Greenlee, Graham and Santa
Cruz; Gherald L. Hoopes, Sr., of Graham County as a member of the state's Community
College Board; Gherald Hoopes, Jr., as President of Eastern Arizona College; Dennis
Miller, as County Manager for Santa Cruz County; Don Campbell as a member of the
Maricopa Community College Governing Board; Ms. Lourdes Moreno- Jeong as
representing Santa Cruz County on the State Board of Community Colleges; and
Representative Newman as representing Cochise, Greenlee, Graham and Santa Cruz
Counties.
January 5,1995
Page 2
JOINT LEGISLATIVE STUDY COMMITTEE
ON COMMUNITY COLLEGES
Martha Dorseyidentified herself as Senate Research Analyst for Education, Trisha Korwes
as House Research Analyst for Education, Christina Arzaga- Williams as Research Analyst
for the House Minority Staff, and Keely Varvel as Research Analyst for the Senate Minority
Staff.
Backaround Information
Representative Ortega gave a background overview of the creation and purpose of the
Joint Legislative Study Committee on Community Colleges, stating that the Committee
was charged, by statute, with making recommendations on how to improve the community
college system. Representative Ortega stated that the original intent of the legislation was
to address the issues with the unorganized counties of Arizona. Representative Ortega
commented that of the two counties that he represented, Greenlee County was being
served very well by Eastern Arizona Community College located in Thatcher, but that
Santa Cruz County was not being served to the same degree by Pima Community College
-- thus being the reason for the creation of the Committee to address some of those issues.
Representative Ortega explained the importance of the community college system serving
the lower and middle- income Arizona population, and in particular the rural population, by
providing higher education to those persons that cannot afford to attend either of the three
Arizona universities.
Representative Ortega suggested that the Committee address the appropriations process
and make a determination as to the direction that should be taken. Representative Ortega
described the current process of monies being appropriated to the Community College
Districts Governing Board, and the Board in turn dividing up the monies amongst the ten
community colleges. Representative Ortega expressed his concern with the larger
counties, Maricopa and Pima, lobbying the Legislature " on their own behalf' for monies.
Representative Ortega stated that the Board's direction was being evidenced by
polarization within the Board between the " urbans" and the " rurals", with the Board making
one decision and the larger counties addressing the Legislature with their own concerns,
causing the legislators to have to listen to two different voices. Senator Ortega explained
that there was some discussion of introducing legislation that would ( 1) eliminate the
Community College Districts Governing Board in its entirety, ( 2) restrict the powers and
change the duties of the Board, or ( 3) interject the Legislature in the decision- making
process, presently given to the Board.
Representative Ortega also suggested that the Committee address the issue of whether
the spokesman for the community colleges would be as " a group" or as " individual
community colleges". Representative Ortega expressed his concern over decisions made
JOINT LEGISLATIVE STUDY COMMITTEE
ON COMMUNITY COLLEGES
January 5,1995
Page 3
by the Board such as bond issues, capital expenditures, etc., describing the process as
" politics within the Board" regarding distribution of appropriated funds.
Representative Ortega commented on the importance of equalization, citing two more
community college districts that may be eligible for equalization, and stressed the
Committee's need to address the specific portion of the method in which community
colleges are funded, in order to serve the best interests of everyone in Arizona and in
particular the unorganized counties of rural Arizona. Representative Ortega expressed
concern for Santa Cruz County, stating that many of the education and business leaders
in the County would like to have their own community college district that would better
serve the citizens of Santa Cruz County. Representative Ortega stated that many of the
citizens of Santa Cruz County felt that they were a " stepchild" to the decisions made by
the Pima Community College Board.
Representative Ortega expressed his concern over the issue of transferring credits from
community colleges to the three major universities, stating that there was no uniform
standard at the present time.
Representative Ortega concluded by applauding the Committee for coming together, and
encouraged them to proceed with recommendations this year so that implementation could
become a reality the following year.
Senator Chesley clarified that Ms. Moreno- Jeong was a member of the State Board of
Community Colleges, that Mr. Dalton Cole was the present Chairman of the State Board,
and that the State Board consisted of 17 members.
Senator Chesley expressed his resentment to Representative Ortega's insinuation that the
Maricopa Community College District had lobbied the Legislature separately, on behalf of
a bond issue, clarifying that not one person had approached him " to talk"; and further
stated that he was of the understanding that the State Board and the Maricopa Community
College District had worked it out among themselves. Senator Chesley continued on by
stating that the Maricopa Community College District had been subsidizing, with state
monies, other counties that did not have the basis for taxation, including Eastern Arizona
and Cochise Community Colleges. Senator Chesley commented that it was a false
statement to imply that the Legislature was running " rough shod" over the little schools
because Maricopa County had greater numbers and greater dollars .
Senator Chesley stated that he was in agreement with Representative Ortega regarding
transfer of credits to the universities. Senator Chesley explained that a group of " core
classes" should be transferrable to any of the three universities. By way of example,
Senator Chesley cited Mesa Community College's " list" of classes that would transfer to
January 5,1995
Page 4
JOINT LEGISLATIVE STUDY COMMITTEE
ON COMMUNITY COLLEGES
Arizona State University. Senator Chesley commented that nothing- had changed to date,
despite information that the community colleges and the universities were " working it out".
Senator Chesley stated that he was in total agreement with Representative Ortega
regarding the issue of transferring credits and that it was the obligation of the Committee
to address the issue.
Representative Ortega responded to Senator's Chesley's comments, saying that he did not
mean to imply that Senator Chesley was involved with any kind of a bond issue, but only
meant to bring to the Committee's attention the degree of involvement of the Legislature
in the comnlunity college public policy process and whether the Legislature should involve
itself, to what degree, and as to the powers given to the Governing Board of the
community colleges. Senator Chesley thanked Representative Ortega for clarifying
previous comments made.
Senator Arzberger commented on the issue of transferring credits, stating that the State
Board had come up with a plan that he believed would work. Senator Arzberger
mentioned that at one point in time, he intended to introduce legislation regarding transfer
of credits but that the State Board wanted to work it out administratively and that it
appeared as though members of the State Board were getting some things done now.
Senator Arzberger commented on subsidizing Eastern Arizona and Cochise Community
Colleges and explained that the formula called for equalization of those districts that did
not have enough tax base to support a college and still receive state aid. Senator
Arzberger stated that he did not want to see the formula changed. He commented that
Santa Cruz County was badly in need of a community college facility, and concluded that
the State Board needed to look at some of the issues discussed by the Committee
members and that a plan be developed to establish a community college in Santa Cruz
County without jeopardizing the other community colleges.
Discussion followed between Senators Chesley and Arzberger regarding subsidization and
establishment of a community college in Santa Cruz County.
Gherald H. Hoopes, Jr. clarified that Representative Ortega was referring to the State
Board of Community Colleges rather than the local boards when he was speaking of
dlscuss~ onr egarding elimination of the Community College Districts Governing Board in
its entirety. Representative Ortega acknowledged that Mr. Hoopes' understanding was
correct.
D~ scuss~ ofonll owed between Ghearld L. Hoopes, Jr. and Donald Campbell regarding the
issue of transferring credits to the universities.
JOINT LEGISLATIVE STUDY COMMITTEE
ON COMMUNITY COLLEGES
January 5,1995
Page 5
Representative Newman stated that he was in agreement with many things discussed by
Representative Ortega and emphasized the need for another meeting on the Santa Cruz
situation regarding the establishment of Santa Cruz Community College. Representative
Newman asked for an explanation of the relationship between the Joint Legislative Study
Committee on Community Colleges and the Select Committee on Community Colleges.
Don Campbell inquired whether the Joint Legislative Study Committee on Community
Colleges was a decision- making body or an advisory- body in terms of what
recommendations the Committee agrees upon.
Representative Ortega explained that the Joint Legislative Study Committee on Community
Colleges was created by statute, whereas the Select Committee on Community Colleges
was created by the House. Representative Ortega clarified that the Joint Legislative Study
Committee could not, by statute, transfer its responsibilities to the Select Committee.
Ex~ lanationo f Committee's Mandate and Community Colleae Fundinq
Ms. Trisha Korwes, House Research Analyst, Committee on Education, explained that
the Laws of 1994, Chapter 351, created the Joint Legislative Study Committee on
Community Colleges, requiring the Committee to study the establishment of community
colleges in the counties that were not a part of the community college district in the State,
and that the bill specified five duties, including ( 1) analysis of community college district
formations, ( 2) analysis of population growth trends in rural communities, ( 3) analysis of
needs for community college expansion and the barriers to such expansion, ( 4)
assessment of the fiscal effect of expanding community colleges, and ( 5) development of
leg~ slativer ecommendations based upon the study, with the study report due December
1, 1995. Ms. Korwes distributed materials, including a chart that described the four
count~ esth at did not have a community college district, pointing out the threshold value
amounts of each county.
Don Campbell suggested that members of the Committee meet with residents of the four
counties in order to get a feel for what was occurring in those communities relative to the
need for community colleges. Dennis Miller welcomed the suggestion.
Senator Chesley explained to the Committee members that Santa Cruz County did not
qualify, by statute, for the establishment of a community college because it did not have
the population figures, nor the property values in order to fund a community college.
Senator Chesley discussed the issue in further detail, explaining that in order to consider
the establishment of a community college in Santa Cruz County, at least two existing
statutes would have to be changed. Senator Chesley stated that it would be " tough" to
change the extsting laws.
January 5,1995
Page 6
JOINT LEGISLATIVE STUDY COMMITTEE
ON COMMUNITY COLLEGES
Dennis Miller responded to Senator Chesley's comments, explaining in more detail the
plight of the Santa Cruz residents in terms of high unemployment rates, low income,
transportation problems, etc. relative to the need for a community college that would
provide a two- year degree. Mr. Miller favorably acknowledged the assistance that Pima
Community College was presently providing to Santa Cruz residents.
Donald Campbell suggested to the Committee, delivery of education via satellite system,
and explained the success of such systems presently being used in elementary education
programs. Mr. Campbell stated that the Committee needed to think about different
methods of delivery. Discussion followed between Representatives Schottel and Newman,
Don Campbell, Dennis Miller, and Gherald L. Hoopes, Jr. regarding satellite education and
other methods of delivery.
Senator Chesley said that he did not believe in redistribution of wealth and that there was
no way Santa Cruz could start a district on its own. Chesley stated that he had strong
feelings towards helping Santa Cruz but that he opposed the starting up of a new campus.
Senator Chesley explained that once a district is " up and running", they soon begin to
cripple and then they come back to the Legislature and want more money. He expressed
that he believed there was a way to help Santa Cruz, that there was no simple answer,
that he would be willing to listen to anything that was reasonable, and that he supported
education, particularly at the community college level. Discussion followed between
Dennis Miller and Representative Schottel.
Representative Schottel acknowledged that bringing a community college to Santa Cruz
County was a serious problem and stated that the Committee would set up another
meeting and make arrangements for Committee members to go to Santa Cruz County to
talk with respective representatives and meet with the community leaders. Representative
Schottel stated that he thought the community colleges were a stronger part of the future
than the universities right now, explaining that the cost of educating students in the
community colleges was one- half the cost of educating students in high schools or
universities. Representative Schottel stated that the Committee should look at
telecommunications, explaining that once set up and in place, public buildings could be
used in the evenings and weekends for alternative campuses and that the concept would
appeal to the taxpayers. Representative Schottel concluded by saying that all Arizona
taxpayers pay taxes into the " pot" for all education, including the four counties that do not
have community colleges but are paying for part of the bill to operate all community
colleges in Arizona.
Senator Arzberger responded to Representative Schottel's comments and while
acknowledging " the coming of television education," Senator Arzberger expressed his
concern for the students' ability to meet, one- on- one with their professors for help or
JOINT LEGISLATIVE STUDY COMMITTEE
ON COMMUNITY COLLEGES
January 5,1995
Page 7
assistance, no€ provided through satellite education. Senator Arzberger expressed his
agreement with Representative Schottel's comment, that while all taxpayers were
contributing to the funding of education, not all taxpayers were benefiting equally,
particularly in the rural counties.
Representative Schottel acknowledged that with the passage of the North American Free
Trade Act ( NAFTA), Santa Cruz county will explode with population and student needs;
Representative Schottel complimented Pima Community College as being one of the
finest institutions in the State.
Without objection, the meeting was adjourned at 10: 15 a. m.
Respectfully submitted,
( Tapes and attachments on file in the Office of the Senate Secretary)
I Presented to:
State Board of Directors for Community Colleges of Arizona
Presented by:
Thomas J. Saad
Associate Executive Director for Administration
Mary Saiz
Administrative Service Officer I
An In- service Training Presentation Prepared by:
Thomas Saad Mary Saiz David Rubi Pete Gonzalez
March 18, 1994
Tempe, Arizona
INTRODUCTION
Fi~~ ancinogf Arizona com~ nunity colleges involves a complex set of
Cunstitutionally dcfi~~ elidm itatio~ lso n how much college distric~ sc an tax and how
much they can spend. In addition, there are a series of statutory laws that definc
the state's contribution in support of community colleges General Fund operations.
For purposes of this presentation, we will focus on the following topics:
-- Constitutionally defined tax levy and expenditure limits
-- The primary sources of funds in support of General Fund Operations
* Primary Taxes * State Aid * Tuition & Fees * Fund Balance
-- Operational expenses by line item.
THE RELATIVE MAGNITUDE OF REVENUES & EXPENDITURES
To illustrate the relative magnitude of revenues and expenditures, the component
information is in the form of a pyramid. Revenues are portrayed in the
conventional form, while expenditures are shown in the form of an inverted
pyramid. This graphic presentation is based upon the following concepts:
1. Tuition & Fees are the last source of revenue factored into the revenue equation.
After all revenue sources that are relatively fixed have been identified, the question
becomes: " Are additional revenues fro111 tuition & fees required to balance the budget?"
2. Salaries and related benefits are the largest expenditure category, and relatively
small percentage increases to the base, cause sizeable dollar increases. Local board policy
decisions that determine cost of living adjustments, 111erit increases, and increased costs of'
health insurance, have a major impact on the growtll of General Fund operational expenses.
PRIMARY PROPERTY TAXES' REF. A
S'I'ATUTOHY AUTllORIrI'Y:
-- TAX AUTkIORITY TO MAINTAIN TIlE DISI'RICT. Pursuant to AKS 15- 1462, the Board of
Supervisors in each district, levy primary taxes on behalf of the district, for purposes of "... maintaining
the district and not for capital outlay."
-- LIMITS ON PRIMARY TAX LEVIES. Arizona Constitution Article IX, Public Debt, Revenue
& Taxation, Section 19, states in part, " ( I ) The maximu~ n amount of ad valoren1 taxes levied by any
county, city, town or community college district, shall not exceed an amount two percent greater than the
amount levied in the preceding year. In addition, taxes can be levied against property not taxed in the
prior year ( new construction). For purposes of calculating the levy limit, the law stipulates that the levy
limit for each year is increased to the maximum allowable, whether or not the political subdivision elects
to levy to the maximum.
CAN TAXES BE LEVIED IN EXCESS OF THE PRIMARY LEVY LIMIT ? YES ! Arizona
Revised Statute 42- 301.03, enables community college districts, by two- thirds vote of the governing board,
to conduct an override election ( at a general election) for purposes of le; ying secondary property taxes
in excess of the primary levy limit. The ballot shall specify the " maximum dollar amount of secondary
taxes which may collected in each year". l h e duration of the override cannot be less than two years or
more than seven years. The obvious problem with the override provision is what happens if the voters fail
to approve an override after the period of the first override lapses.
ARE COMMUNITY COLLEGE DISTRICTS AT OR NEAR TIIEIR LEVY LIMITS? Six
community college districts are at or very near their levy capacity. Of the four remaining districts, the
range of capacity used is 70% to 90%.
SOUI< CB 01' KEVIINUBS - COMMUNIr[ Y COLLEGES
Sr1' A' 1' l: A 11)
m L N L m m , .. . ' , r . 0"
Arlzotla Statutory Autllority - ARS 15- 1466 ( New Icgislatio~ l9 3/ 94)
' flie State sliall pay die cost of rliai~ itair~ iliagn y district possessitig the qualificatioils as prescribed in statute for fiscal year 1993-
1994 arid thereafter accordirig to the followi~ igc alculation:
Col~~ pone~ its: Prior year appropriation
rt Percentage growtll of GDP i~ nplicitp rice deflator ( iliflation) + or -
-- or
' FTSE ( Full- time equivalent student)
Definition: Divide total enrollment credit hours per selilester by 15 credit llours, wllich is tlie # of llours considered a full- ti~ ncs ~ udc
FTSE Coui~ t
Arizona Statutory Authority - ARS 15- 1466.0 1
I n determining state aid the number of full- time equivalent students sllall be calculated in the followi~ lgm aniler:
Basic actual FTSE count, add the liuriiber of FTSE ellrolled as of 45 days after classes begill in the fall setnester to rlic
number of FTSE e~ irolled as of 45 days after classes begin in the spring semester, not including short- term classes, ant1
divide tlle number by 2.
ie. Fall semester 4,500 FTSE
Spring semester + 4 350 FTSE
= 8,850 FTSE divided by 2 = qg25 FTSE c o u ~
E N R ( In lieu of primary property taxes)
Arizona Statutory Authority - ARS 15- 1468 ( New legislatiori 93/ 94)
Any district that is part of the state com~ nu~ iictyol lege system but has less than $ 448,017,200 of primary assessed valuatior~, s lr;~
be paid by the state according to the following calculation:
Components: Prior year's actual primary assessed valuatioli ie. $ 246,059,000 + or - d tof s t t h($ 448.017 .200) $ 448.017.30
= Difference between actual and statutory valuation a~ riou~ lt $ 201,958,200
Per $ 100 dollar of assessed valuation $ 2,019,582
x or $ 1.37
- X l ~ . l Z
- % IIa. 82; 7
SOURCE OF KEVENUI3S - COMMUNI'I'Y COL1, EGES
IWNI) IIALANCE
ND U N I V I ~ I W B
Tlie co~~ i~~ iucnolilteyg es co~ ifor~ ton generally accepted accouriti~ igp rinciples applicable to governmental colleges and universities.
Types of funds: Current - Accounts for tliose resources that will be expended in tlie liear term.
Unrestricted
General fund - accounts for all current financial resources
Auxiliary fund - accou~ lts for transactions of substantially self- supporting auxiliary activities.
l Restricted
- Accounts for investment in property, buildings and equiplne~ it.
As agreed to by the co~ nmunityc ollege districts and the Arizona Auditor General the fund balance for purposes of analyzing the financial conditio~ 0~ 1 .
community college districts is calculated in the followirig manner:
Cumulative end result of the funds financial activities
- Less Cash for Reserves
- Less Casli for Board Designations
le to Carrv Over as. a F- urce for the New Y w
Components of tile Fund Balance available to carry over as a financing source for the new year [ nay include:
Assets sucli as LESS Liabilities such as
@ Cash @ Accounts payable
Investments eAccruetl liabilities
Property taxes receivable De ferred revenue
@ Supply lliventories
Prescribing to tlie graphic illustration of [ lie Pyramid, any fund balance not reserved or tlesig~ iatedw ould be tlerived from tuirion a~ itf1l . c I C . \ , L . I I ~
not expended in [ lie year. 4
SOUI< CE OF REVENUES - COMMUNITY COLLEGES
N AND l.- f- --. f. h *
Arizona Statutory Authority - ARS 15- 1425 ( 5)
Tlie State Board shall " Fix and collect fees wllicll tile col11nlul~ ityc ollege districts shall charge and graduate the tuition and ices
betweer1 institutio~ isa nd between residents, ionr residents and students from foreign cou~ itries. \ I
State Board Standards and Procedures - SP7- 508
. General is a charge to stude~ lts levied on a per credit liour basis for the purpose of offsetting tlle cost of instructiori i ~ i l t l
attendant functions. General tuition is paid by all students ill addition to all applicable out of state tuition and out of cou~ lty
reimbursement cl~ arges.
Reelslratlon are charges to students on a per credit liour basis for tlie purpose of offsetting tile cost of studelit activities i111
for debt retirement.
is a fixed fee assessed on a per student per semester basis to recover direct Iia~ idling aiid processirl
expenses of registration.
o wC o uSer- are otlier charges to students that relate to tile norrnal cost of doing busii~ ess
beyond tuition, registration, and registration processi~ lg fees.
Statutory Authority - Since there are no statutory referelices as how to determine out- of- state tuition, ill the absence of law tlic S r ; ~ rI~ jo ;
is responsible to determine the calculation.
State Board Standards and Procedures - SP7- 508
Out- of- State tuition is an additional charge to out- of- state students, and wlleri co~ nbiiied with gei~ eral tuitiori and registratiorl icc.(
should recover a minimum of eighty percent of the cost of i~ istruction ( operational cost of FTSE).
SOUKCL', 01: K1iVL: NUES - COMMUNITY COLLEGES
Arizona Statutory Autliority - ARS 15- 1469
l'lle district rnay adrnit students froni any part of tllis state which is riot a part of an establislled cornmu~ iityc ollege districl 011 I I H
sarne conditioris as residents, and is calculated in tlie followi~~ ngia liner:
Components: Operational expenses of tlie college district for the currerit year
- cby . . ie. $ 90,000
$ lo. ooo
= Difference between operational expenses arid M& O State Aid $ 80,000
for the 800
= Cost of maintaining student above arnourit paid by state aid $ I00
X
- 8
lLA!& I
State Board Standards and Procedures - SP7- 508
Charges to unorgallized counties for students from tliose couiities attending au Arizona comnlunity college. Tlle rei~ nbursc~~ lci)~
cliarges are described in detail in AKS 15- 1469.
e011o r before May 15, the State Board sllall determine the amount of reimbursement to each district froni each unorgarlized coul~ ly;, i
notify tile board of supervisors of each coullty the amount it must reimburse each district.
. On or before November 15 and May 15 [ lie board of supervisors fro111e ach unorganized courity sliall Inate one: lialf tlie payllicll[ c l ~ l uI
tlie districts.
. BY STATE BOARD DIRECTIVE, THE REIMBURSEMENT CHARGE PER FTSE SHALL NOT EXCEED ' 1' 1 I
CHARGE TO OUT- OF- STATE STUDENTS.
GENERAL FUND OI'ERAI'IONAL EXPENDITURES REF. E- 1
LIMI'TAI'ION OF OI'EKATIONAL EXI'ENIII'I'UKES DEFINED BY CONSTITUTIONAL PROVISION
Pursuant to Article IX, Public Debt, Revenue, and Taxation, Section 21, the total
amount of all funds expended by community college districts is limited. The
expenditure limitation is determined by the Economic Estimates Commission and
must be published prib; r to April 1 for each ensuing fiscal year.
FIOW IS THE EXPENDITURE LIMIT CALCULATED FOR EACH DISTRICT?
For purposes of calculating expenditure limits, the base year is FY 1979- 80. In
calculating the limitation for any given year the expenditures for base year ' 79-' 80
are increased by: 1. the growth in FTSE from base year to the year in question.
2. By an inflation factor known as the IPD ( Implicit Price Deflator). The IPD is
determined by adjusting the Consumer Price Index ( CPI) downward to reflect cost
components that are not relevant to political subdivisions. EXAMPLE.
FTSE ' 94-' 95 FTSE ' 79-' 80 FTSE GROWTH INFLATION FY ' 79-' 80 EXP. ' 94-' 95 EXP, LIMIT
21400 1,033 2.3233 2.0597 $ 3,163,993 $ 15,140,866
ie- $ 3,163,993 X 2.3233 X 2.0597 = $ 15,140,866
DOES THE CONSTITUTION PROVIDE FOR EXCLUSIONS TO THE
EXPENDITURE LIMIT? YES. Article IX, Section 21, details a long listing of
revenue sources that are excludable from the limitation. The obvious advantage to
being able to exclude defined revenues, is that it effectively increases expenditure
capacity.
TO'I'A L B U DG E'TED EX P.
LESS EXCLUSIONS
Bond Proceeds
Long Tern1 Obligations ( COPS)
Dividends & Interest
Grants Federal Gov't
Grants Private
77
Faptial State Aid
-
Funds Accum. for Capital Const.
13 UDGEI'EII EXPENDI'I'URE LIMITATION REPORT
XYZ Cornn~ unity College District REF. E- 2
Contracts Other Entities ($ 1 , oOO, OOo)
CURRL: N'I' I: lJNIlS
GENERAL AUXI1, IAKY I RI3S'TKICTED
Tuition & Fees ($ 13,000,000)
Prior Year's Cash Carry Forward ($ 5 ,000. m) ( $ 5 ~ , 0 0 0 ) ($ 500,000)
Secondary Taxes- Override ($ 5,000,000)
P L A N T F U N D S
UNEXP. PLANT DEBT. RE'I'IRE.
[ TOTAL EXCLUSIONS ($ 24,300,000) ($ 55O, oOO) ($ 12, o0o, ooO) ($ 4,1 ~ , O ( X ) ) ($ 1 . ~ , o o @ I ($ 42,850,0(~ 1)]
1' OTA L
EXPEND. SUBJECT TO LIMIT $ 43,700,000 $ 450,000 $ 0 $ 3,900,000 $ 0 - 1
EEC EXPEND. LIMIT
EXPEND. CAPACITY USED
STATEB OARDO F DIRECTORFSO R
COMMUNITCYO LLEGEOSF ARIZONA
3225 N. CENTRALA VENUES, m12 20 PHOENMA, RIZONA85 012- 2411
TEL ( 602) 255- 4037 FAX ( 602) 279- 3464
September 26, 1995
Honorable Mark Killian, Speaker
Arizona House of Representatives
1700 West Washington
Phoenix, Arizona 85007
Dear Speaker Killian:
Laws 1994, Chapter 35 1, established the Joint Legislative Study Committee on Community
Colleges and called for the committee to meet for two years culminating with a report due
December 1, 1995. The State Board appointed its two members to the committee- Gherald L.
Hoopes, Sr. and Lourdes Moreno- Jeong.
Mr. Hoopes completed his term on the State Board, January 1995, and was replaced on the
committee by Robert J. McKenzie, State Board member fiom Apache County. We recently were
informed by Mr. McKenzie of his resignation fiom the State Board due to an employment
relocation. The State Board is awaiting hrther word fiom the Governor's office on the
appointment to complete Mr. McKenzie's term which ends January 1998.
Please let me know if we can be of fbrther assistance on this matter.
Sincerely,
Pete Gonzalez
Associate Executive Director for Community and Governmental Relations
