CHAMPAIGN — Facing a projected $5 million deficit next fiscal year, Parkland College is offering its employees a voluntary separation program.
Trustees approved the measure this week, and the option will be available to employees from June 25 to Aug. 17 on a first-come, first-served basis.
“This is very similar to what was offered to our employees back in 2016, resulting in substantial savings to the institution and a helpful financial boost to those who were open to moving on,” President Tom Ramage wrote in an email to employees. “This approach is one of the first on our list of measures because it is entirely voluntary and is mutually beneficial for employees in a multitude of situations.”
The voluntary separation program will reopen the retirement incentive program window for employees who previously missed this opportunity, offer employees currently in the retirement incentive program window an additional lump sum of 25 percent of their salary, and offer employees with more than four years of experience a lump sum payment of 25 percent of their salary.
“While I cannot guarantee this program will resolve the problem entirely, we remain hopeful that a combination of participation in the VSP and enrollment gains heading into the fall semester will provide what we need to bridge the financial gap,” Ramage wrote.
Enrollment for the fall is down 30 percent, Ramage wrote, though he expects that to improve as students are taking “a wait-and-see approach.”
“We’ve had some pretty poor numbers for fall semester,” he said. “We have good reason to believe, I think, that that number will get better the closer we get to the fall semester.”
Parkland is projecting a 20 percent enrollment drop in the fall and spring semesters, CFO Chris Randles said. While summer enrollment is up 4 percent, the college is budgeting for a 5 percent drop this summer, in case there’s more nonpayments than expected.
Student tuition and fees make up 54 percent of Parkland’s operating budget, so the drop in enrollment next school year “contributes greatly to the $5 million deficit,” Randles said.
While Parkland received about $1.6 million from the federal CARES Act for institutional expenses, Ramage wrote that the deficit will be covered “in the short-term by dipping into the institution’s fund balance.”
Despite next year’s projected deficit, Parkland is expecting a nearly $2 million surplus this year, higher than the projection in February before Parkland moved classes online for COVID-19, Randles said.
Because doctors and hospitals have had to limit appointments, Parkland’s employees’ health claims “have plummeted the last couple of months,” Randles said. “That will end up helping this fiscal year. It may have a negative impact on next fiscal year as folks need to catch up.”
And he said discretionary spending has “been about as low as possible,” with very little travel and purchases for office supplies.
“The year’s actually fiscally going to be very sound — better than projected a few months ago — which might seem odd to some,” Randles said. “And then, unfortunately, we’re going to see most likely movement in the opposite direction for next fiscal year.”