As Michael McCall winds down his 16-year career as president of the Kentucky Community and Technical College System, he will leave behind an operation that ran a budget deficit in his final three years.
An audited financial report released this week shows that KCTCS posted a loss of $13.3 million in the fiscal year that ended June 30, a slight drop from the $15.5 million shortfall of 2012-13.
The system cut expenses by nearly 7 percent last year, but the savings weren’t enough to offset drops in several revenue sources. Receipts from state appropriations and student tuition were flat in 2013-14.
Despite the 72-campus system’s third straight year of finishing in the red, KCTCS Board of Trustees Chairman P.G. Peeples hailed the financial report.
“We are extremely pleased with the outcome of this audit,” Peeples, president of the Lexington-Fayette County Urban League, said in a released statement. “It clearly demonstrates KCTCS’ commitment to strong stewardship and fiscal responsibility.”
KCTCS is actually experiencing a continuing downturn, both financially and in the number of students it serves. From 2006 to 2011, the system generated a net surplus of at least $50 million a year, thanks in large part to enrollment surges that coincided with the Great Recession and rising unemployment. Fall enrollment peaked at 108,302 in fall 2011.
Enrollment has slumped ever since -- and, with it, tuition and fee revenue. KCTCS reported 92,365 students in the fall of 2013. Although it launched an “enrollment blitz” through direct mail, Internet advertising and radio, the system had a preliminary student headcount of 87,029 this fall, a one-year drop of almost 6 percent.
It isn’t known what measures KCTCS took -- if anything -- to remedy the revenue-spending gap. Attempts to reach chief finance officer Ken Walker were unsuccessful Friday.
While state appropriations held steady at $191.5 million in 2013-14, KCTCS expects that amount to fall to $190.2 million in the current school year.
The biggest drop in KCTCS’ revenue last year occurred in so-called “non-operating and other revenues.” That category declined $37.1 million, mainly because of an $8.4 million drop in federal and state grants and contracts and a $6.8 million drop in investment income.
The ultimate indicator of the system’s health -- its “net position,” or the difference between its assets and liabilities -- remains strong. As of June 30, it stood at $842.8 million. But that balance has declined with each of the budget deficits of the last three years. In June 2011, KCTCS’ net position was $879.2 million.
McCall, KCTCS’ only president since the community and technical colleges were merged in 1998, retires Jan. 15, and will be replaced by Chancellor Jay Box. McCall, one of the highest paid community college administrators in the country, will then become president emeritus and continue to receive his annual base pay of about $324,000.
Reporter James McNair can be reached at jmcnair@kycir.org and (502) 815-6543.