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Adopted Minutes
April 17, 2001

Special Board Meeting

Call to Order

The meeting was called to order at 3:08 p.m.

Roll Call

Present: Canady, Creamer, Holden, Jeffries, Patterson, Pelleran
Absent: Rasmusson (arrived at 3:15 p.m.)

Additions/Deletions to the Agenda

Trustee Jeffries stated that Mr. Gary Olson, the director of the Senate Fiscal Agency, would be giving a report regarding economic forecasting issues.

Trustee Patterson added a resolution pertaining to Senate Bill 365, which is the boundary bill.

The Board agreed to these additions.

Limited Public Comment Regarding Agenda Items

Tom Ferris - I am Tom Ferris, staff for the part-time Clerical Technical Union (CTU). With me is the President of the union, Jan Penton, Vice President, Steve Simonson, and District Director, Diane Waller. I speak to agenda item 5, negotiations. The part-time CTU has been without a contract since July 1 of last year. We are continuing in negotiations. We have had no additional meetings since February because at that time we came to a conclusion that what was on the table was not respectful to the particular union with regard to language issues, and was not enough as far as the economics was concerned. We petitioned for fact-finding, and we are proceeding down that process. But it is a disservice to the College to have this union have to petition for fact finding. We believe what we have on the table, especially with regard to the language issues, is very reasonable and a sign of the very important work that the members of this union provide. There are 204 members of this group. They are at the front line with a lot of folks who interact with the College. These aren't people who chose this instead of going to work at McDonalds. They are very well trained, very professional, and very needed people at Lansing Community College. They deserve your respect and part of that includes a fair contract. We believe now we have to get an outside party who will be impartial and give us advice on what is fair and equitable. And we are willing to abide by that advice. We are hoping that once that fact finder report is finished, or before he finishes the report, that we can get back to the table and conclude the matter on behalf of the employees.

Closed Session

IT WAS MOVED by Trustee Holden and supported by Trustee Patterson to go into closed session for the purpose of discussing negotiations.

Ayes: Canady, Creamer, Holden, Jeffries, Patterson, Pelleran
Nays: None
Absent: Rasmusson

Motion carried.

The Board went into closed session at 3:11 p.m.

The Board returned to open session at 4:00 p.m.

IT WAS MOVED by Trustee Canady and supported by Trustee Patterson to return to open session.

Ayes: Canady, Creamer, Holden, Jeffries, Patterson, Pelleran, Rasmusson
Nays: None
Absent: None

Motion carried.

Roll Call
Present: Canady, Creamer, Holden, Jeffries, Patterson, Pelleran, Rasmusson
Absent: None

Public Comment (continued)

Gary Olsen, director of the Senate Fiscal Agency - (Mr. Olson distributed a document regarding the Economic and State Update for fiscal years 2000-2001 and 2001-2002. The document is on file with the official Board materials.) The Senate Fiscal Agency is responsible for revenue forecast and we are also responsible for all of the analysis on the State budget and assisting the Senate in establishing the State budget. We have a consensus revenue process wherein the director of the Senate Fiscal Agency, myself, the director of the House Fiscal Agency, and the State Treasurer meet twice a year by law to formulate revenue estimates. Those revenue estimates go through a consensus process to the extent that all three of us have to agree on a number for the year. Those revenue estimates are the basis for the budget that the Governor recommends to the Legislature in February of each year, and also the May estimate which is the basis for final decisions on fiscal year 2002 State budget which is currently before the Legislature. What I wanted to talk about very briefly, and then answer any questions you might have, is where the Senate Fiscal Agency thinks the United States? economy is and what are the revenue collections and what that might mean to the State budget. First of all, panel number two points out that we've had nine years of pretty substantial economic growth in the United States affected by the real gross domestic product. We began to see changes in Michigan, and the rate of economic growth started slowing in Michigan considerably. Things have gotten progressively worse over the last couple of months. The nine years of growth have been a good ride, but clearly something is changing. If you look at the third panel in this handout, you can see the rate of real gross domestic product in the United States has slowed considerably in the last couple of quarters. We?ll have a first quarter of calendar year 2001 number in about 10 days and the anticipation is that that number will be at or below zero. we're anticipating a possible ?1% quarter, so the growth over the last nine years is coming to an end. Why is that? Several factors. Primarily we're looking at the impact of interest rates increases of the Federal Reserve put in place to slow the economy. It takes a period of time for interest rate changes to impact the economy. Energy prices have gone up significantly and that is also having an impact. The ratio of debt in the economy, especially in households where consumers have spent over their means, and that is going to have an impact on the economy. Then, overall consumer confidence. Those are the big negatives that have impacted the economy. Panel four is an indication of purchase managers? views of the economy, and the amount of business sector activity has slowed. The stock market has a great impact on consumer confidence and you can see the drop in panel six. In terms of overall consumer confidence, panel seven, you can see this graph dropping off in the last several months. Interest rates are up and then back down, and just as it takes months for interest rate increases to slow the economy, it is going to take considerable time for interest rate cuts to help speed the economy up. We think that there will be further interest rate reductions. Panel nine. It looks at real personal income growth in Michigan. You can see the growth that has occurred since the last recession in 90-91. we're probably now looking at 2001 being negative again. Michigan?s unemployment rate is an upward trend, and we believe the unemployment rate will increase to probably 6% in the year ahead. Panel 12 is an interesting view of the State?s economy. One of the issues, while the unemployment rate has been trending up in the state, is the number of jobs going down. One of the factors impacting the economy, as well as the average earnings of workers, is the amount of overtime has gone down. So all of these factors result in what you see on panel 13 of the handout. State tax collections also reflect slower economic growth. The 2001 revenue estimate is agreed to in January of 2001. We thought there would be about 4.6% base line general fund revenue growth. After factoring in tax reductions, which the Legislature is already enacting and the Governor signed into law, we're looking at only a 1.5% revenue growth. We have reductions already in place with the State income tax. We now believe that when the revenue estimates are redone on May 15 that general fund, general purpose revenues will decline between 250 and 450 million below this January 2001 estimate. In 2002, similar things are going to occur. You have an additional revenue estimate for 2002, which is the basis for the Governor?s budget recommendation, a net of 1.7% growth in general fund, general purpose revenues for 2002. A 5.3% in baseline growth after enacted tax reductions reduces the revenue by 1.7%. We believe that the May 2001 consensus estimate of general fund, general purpose revenues will decline by between $250 and $550 million. The Governor?s budget spent all of the monies. So if there is a cut in these estimates between $250 and $550 million, which is going to have to come from somewhere and I'll talk about that-very significant adjustments in the general fund, general purpose budget for the State. There will also be significant reductions in school aid fund budget, which funds K-12 education. What does this mean? It means that the 2001 general fund, general purpose budget will almost certainly be in deficit when the revenue estimates are redone. Probably between a range of $200 and $400 million. The options available to the Legislature and the Governor to eliminate the deficit include reductions in the current year appropriations, revenue increase, and transfer from reserve funds. I believe due to the timing of this deficit in the State fiscal year, it is likely that the Legislature will utilize a portion of the $1.2 billion balance in the Budget Stabilization Fund to balance this FY 2000-01 budget deficit. That money is meant to be used for poor economic times, and we are clearly in one. While there is a possibility that the appropriations that have been placed in the current year for community colleges could be cut, I think that is unlikely at this point in time. The real issue for the community colleges is next year?s budget. On panel 17 is the 2002 budget, and it is based on the January revenue estimates. Revenue increases are a possibility, but politically are unlikely. Also, into play here is the 2003 budget because the Legislature has already approved an increase to the School Aid Fund budget. That means that the first growth of the 2003 general fund budget is going to have to go school aid and that is going to factor into decisions for the 2002 budget. What does this mean for community college funding from the State? In the current year, the community colleges received a healthy 6% overall increase. Lansing Community College received a 6.2% increase. The Governor?s recommendation for 2002 is a 2% increase overall. In addition, the Governor is recommending that the Legislature repeal the existing Michigan tax credit, which provides credit for tuition at universities and colleges. That keeps tuition below the rate of inflation. This will save money, and the Governor is recommending to spend that money for higher education, and this will be an additional 1.5% increase. If you assume that the tuition tax credit will be repealed, that will be a tough sell to the Legislature. In the end, the community colleges will be fortunate to receive any increase in 2002. I will be very surprised if there is any increase in 2002, and my advice would be to prepare for the worst. The Legislature will be faced with the decision, looking at these tax cuts that are already in place.

Trustee Jeffries - In terms of the supplemental, is that still in play?

Mr. Olsen - It is in play. The Governor recommended the supplemental appropriations for the current year, which didn't include in them any findings for community colleges or universities. The Senate passed a bill that did include a one and a half percent increase across the board for universities and college for infrastructure technology, equipment, and maintenance funding. So that bill is in play. It is above 30 million dollars, for colleges and universities. Will that survive? I don't know. It is doubtful at this point in time. That was something that the Legislature has been doing with extra money. But when there isn't extra money, it isn't impossible, but I wouldn't count on that.

Trustee Jeffries - You all are going to be meeting on the 15th of May. Will there be a decision made at that time?

Mr. Olsen - No, what happens in the process is on the 15th of May, the three of us, the director, and Doug Roberts, soon to be State Treasurer, will meet, and we will come up with this revenue number. Based on that number, we will tell the Legislature and Governor that the budget is out of balance by this amount. We will then present a lot of options to them as to how you deal with the deficit, and they will make the decision on what to do. I will provide them, the senators I work for, numerous options to make a decision. I would think the timing is such that the Legislature should, based on our schedule, get the budget approved and sent to the Governor by mid June. It may drag out longer than that with these difficult decisions. But it is more difficult to cut than to spend extra money. So mid to end of June I think there will be a firm number that the college would have in terms of their 2002 college appropriations, at least going in. Understand, I have been with the Legislature 23 years and I have done this economic forecast for most of that time, and when you are in a situation like we are in now with the economy, things can get a lot worse quickly. We made an estimate in January that revised down the estimates from the prior May. We will make another estimate this May to revise down from January. There is no guarantee that the economy won't get worse than you think, and then you will have further problems down the road. We hope that is not the case and will do our best to make the best estimate for State revenues. It is very difficult. If you ask an economist today, you get many different answers to whether we are at the bottom of an economic cycle. The Wall Street Journal reported yesterday, and so did Business Week, that the auto industry is already rebounded. And there will be a big pick up and that will be good for Michigan. I am not entirely convinced of that, but that is their estimation. That is their speculation. Other industries are going down, like technology, but they are speculating that the auto industry will start increasing production, if sales stay where they are. They are very high, auto sales, so that is sort of the timing.

Trustee Jeffries - On the tuition tax credit, are you saying that is something they could take action on yet?

Mr. Olsen - There is a bill introduced in the Senate to repeal the credit that will be effective for the tax year 2001. People have already, of course, filed their taxes for tax year 2000. So the Governor's recommended that the credit be repealed for 2001. Probably looking at the situation we are in for the budget, little or no increases from universities or colleges are very likely in 2002. I don't think many colleges or universities will be able to keep their tuition increases under 3%, and, therefore, their students, or parents, won't qualify for the credit anyway. The Governor has recommended a repeal to that and I think that will be discussed. That is a possibility, if that is repealed and nothing else happens. I doubt the Legislature will repeal that credit without getting that money that it saves in the State budget. I doubt that will happen.

Trustee Holden - What about capital outlay monies?

Mr. Olsen - Well, the Governor has recommended in his 2002 budget no new planning authorization for either universities or community colleges. We have a process where the first step of the Legislature is to offer planning facilities. The Governor has recommended no new project in 2002. The Senate gave a supplemental appropriation bill that they passed in late March. It had a couple community college projects in it. Those are posed by the administration at this point in time. That will be negotiated. There is always a possibility, I have seen this before, you can't put operating money in these budgets, sometimes you do something on the capital outlay side where your body (inaudible) cost is down low, and also creates... (inaudible). Right now I would guess we would see little or no action on capital outlay, as well. There may be some relatively small projects. The State building operates on your statutory capital and not the bonds. Some of the small community college projects can still be financed through that.

Trustee Holden - Are you still looking at lowering the amount of match-up the community college has to have?

Mr. Olsen - That is still being discussed. That is a possibility, too, that something could be done in that area. There is always the possibility of, as I said, with capital outlay, maybe you can do something on the capital outlay side which sort of pushes the cost out.

Trustee Creamer - What do you project, having been there for 23 years, the impact of term limits would be on a process like this? Would it make it more difficult to manage?

Mr. Olsen - Well, I think it may be more difficult to manage, for me work. For Senate term limits haven't hit?but I have very experienced leaders that I work for. I think it will make it extremely difficult. The house has leaders there on both sides of the aisle that have never gone through any sort of economic downturn, whatsoever. So they won't have any experience in handling this. Irrespective, the Legislature will make the decisions to balance the budget. It may be a more difficult process because there is something to be said about history and understanding this. You can touch the budget. People will say there is no way universities, colleges, State agencies can live without some sort of increase, but budgets have been cut in the past and the State survives. Colleges survive and move on. It is painful, but it has been really nine good years of growth and if you have to cut?I can't speak for the college, I am sure this is a lean machine here being run?but the State can, you know. Nine or ten years and everything is growing. It is not necessarily a bad thing to take a hard look at the numbers, and that is what is going to have to happen.

Trustee Jeffries thanked Mr. Olsen for having come and addressed the Board.

Chairperson and Board Member Reports

Chairperson Report

Change of date for May regular meeting to May 14

The Board agreed to change the May meeting date from May 21 to May 14, 2001 at 6:00 p.m.

One-way to Two-way Street Resolution

Trustee Jeffries stated that the City asked that the last sentence in the resolution be amended to include ?in a manner acceptable to both the City and the College.?

IT WAS MOVED by Trustee Creamer and supported by Trustee Patterson to accept the resolution and its amendment.

Ayes: Canady, Creamer, Holden, Jeffries, Patterson, Pelleran, Rasmusson
Nays: None
Absent: None

Motion carried.

Board Member Reports

Trustee Dave Patterson - He presented the resolution concerning Senate Bill 365 in opposition of the establishment of a Michigan Educational Boundary Commission. The Board received the background information regarding this Bill. It is on file with the official Board materials.

IT WAS MOVED by Trustee Pelleran and supported by Trustee Creamer to accept the resolution in opposition of Senate Bill 365.

Chair Jeffries asked that a copy of the resolution be mailed to all of the community colleges in Michigan and to the Michigan Community College Association.

Ayes: Canady, Creamer, Holden, Jeffries, Patterson, Pelleran, Rasmusson
Nays: None
Absent: None

Motion carried.

President's Report


Budget Work Session

Vice President Barbara Larson and Assistant Vice President Glenn Cerny gave the Board a presentation on the 2000-2001 budget reconciliation and the proposed 2001-2002 budget. (A copy of the presentation is on file with the official Board materials.)

Trustee Holden asked what the College receives from the Perkins Grant.

Vice President Larson stated that the College receives approximately 970,000, to a million dollars, a year. She asked Dean Jim Predko to respond.

Dean Predko stated that the College receives a little over a million dollars.

Trustee Holden asked how much is spent on instructional equipment.

Dean Predko responded that approximately $600,000 is spent on instructional equipment, but requests can get up to nearly 1.7 million.

Trustee Patterson complimented Vice President Larson and her staff in the development of the budget in alignment with the strategic planning process. He stated that he is pleased that the College is looking at itself in terms of fees, and in terms of the ability to stay up with costs.

President Cunningham stated that was a cultural change because the College had worked with Boards that did not ever want to increase course fees.

Trustee Jeffries asked if an increase in health care is budgeted for the next fiscal year.

Mr. Cerny responded that a 3% increase is budgeted.

President Cunningham stated that tough choices would have to be made regardless of what happens with the state appropriations. She said that the College is in a position to make some tough choices and will continue to make them.

Trustee Pelleran asked what was the alternative to building the 15 million dollar technology careers building adjacent to the Lansing M‑TEC, considering the College has only one acre to work with.

President Cunningham stated that the College is not landlocked. The College, in conjunction with General Motors, will develop a plan and then determine what are the additional needs.

Trustee Holden complimented the staff for their work on the budget process.

Action Items

Approval of Minutes ? President Cunningham presented the February 19, March 12, and the March 19, 2001 meeting minutes.

Trustee Patterson asked that on page 32 of the February 19 meeting minutes that the $16,000 figure be changed to reflect the correct figure, which was $60,000.

Human Resources



Ivy Collins, Faculty Member, Kineseology, Physical Fitness and Wellness, Liberal Studies Division



James Bollman, Receiving and Inventory Manager, Business Services, Administrative Services Division

Charles Thomas Small, Divisional Human Resources Director, Human Resources Department Careers Division


Norman Beck, Faculty Member, Humanities Department, Liberal Studies Division

Robert Idalski, Faculty Member, Technology Careers, Careers Division

Vicki Spincich, Faculty Member, Dental Assistant, Careers Division

Morris Thomas, Faculty Member, Social Science, Liberal Studies Division


Approval of Bids?

There were three bids presented to the Board for their approval. The first proposal presented was for the Arts and Sciences building exterior weatherproofing and restoration and D.C. Byers of Lansing was awarded the bid. The second proposal presented was for restoration of the parking structure and D.C. Byers was awarded the bid. The third proposal was for the College's housekeeping services and Romanow Building Services of Lansing was awarded the bid.

IT WAS MOVED by Trustee Creamer and supported by Trustee Canady to accept the President's report as presented.

Ayes: Canady, Creamer, Holden, Jeffries, Patterson, Pelleran, Rasmusson
Nays: None
Absent: None

Motion carried.

IT WAS MOVED by Trustee Canady and supported by Trustee Creamer to go into closed session for the purpose of discussing negotiations.

Roll call vote:
Ayes: Canady, Creamer, Holden, Jeffries, Patterson, Pelleran, Rasmusson
Nays: None
Absent: None

Motion carried.

The Board went into closed session at 5:45 p.m.

The Board returned to open session at 6:38 p.m.

IT WAS MOVED by Trustee Creamer and supported by Trustee Patterson that the Board return to open session.

Roll call vote:
Ayes: Canady, Creamer, Holden, Jeffries, Patterson, Pelleran, Rasmusson
Nays: None
Absent: None

Motion carried.

Roll Call:
Present: Canady, Creamer, Holden, Jeffries, Patterson, Pelleran, Rasmusson
Absent: None

Public Comment

There was no public comment.


The meeting adjourned at 6:40 p.m.

Lansing Community College Trustees

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Phone: (517) 483-5252
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