LSCS Chief Financial Officer Jennifer Mott presented the information to the board, which indicates that for fiscal year 2019-2020, the college system's budget is seeing a loss of $19.6 million through a combination of revenue loss and expenses incurred through preparing the college for reopening.
Information from Mott shows the financial loss projections for the year are caused by the following:
- Waiver of distance learning fee: $1.5 million
- 7.3% decline in summer enrollment as of May 11: $1.5 million
- Spring term refunds due to coronavirus withdrawals: $1 million
- Possible 10% reduction in state appropriation: $7.8 million
- Sanitization: $200,000
- Personal protective equipment: $4 million
- Online instructional conversion: $600,000
- Computers for students: $3 million
"We've been told there could possibly be a 10% cut now, then a 10% cut in the fall," Head said. "The numbers you are seeing just depends. Regardless, you can see there that we would be borrowing money out of the reserves."
To counter the losses, Mott said LSCS received around $30 million in federal Coronavirus Aid, Relief and Economic Security Act funding. While half of the funding is going to students and financial grants, Mott said about $10.1 million of the institutional funding they received can be used to address revenue loss for this fiscal year, with an additional $5.2 million left in reserve for the fiscal year 2021.
Additional measures by LSCS include a hiring freeze and budget freeze of nonpersonnel expenses, which Mott predicts is saving around $7.6 million. LSCS will still need to cover around $1.9 million from cash reserves as well.
Moving forward, Mott presented information which includes a 15% decline in fall enrollment, a number she said is based on current enrollment compared to last year at the same number of days into the registration period. The decline in enrollment would result in a $21.9 million revenue decline for the fiscal year 2020-2021 budget, and additional expenses for PPE, maintenance of computer systems, online instruction and an additional reduction of state appropriations would result in a in a total of $34 million in lost revenue.
Mott said if LSCS continues with its hiring freeze, utilizes the remaining CARES Act funding and reduces its overall budget by 5%, the overall estimated shortfall of the coronavirus would be around $2.3 million.
According to Head, the information presented during the meeting is a worst-case scenario, and additional information will be available during the board's May 28 meeting.
