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Agenda MCCCDGB

Friday November 8, 2019 – 9:00 a.m. Originating at: Lake Havasu Campus Room #508 Also Available via Interactive Television at: Neal Campus Kingman Room #508 Bullhead City Campus Room #508 North Mohave Campus Room #403

(Action Items are in bold print) I. Call to Order (Dr. Julie Bare, President) II. Pledge of Allegiance (Bare) III. Roll Call (Amy Curley, Executive Assistant) IV. Approval of Meeting Minutes (Bare)(Appendix 1)

The draft minutes from the October 11, 2019 regular meeting appear in Appendix 1.

Motion to approve the draft minutes from the October 11, 2019 regular meeting they appear in Appendix 1. Motion to approve the draft minutes from the October 11, 2019 regular meeting they appear in Appendix 1 with the following modifications:

V. Audience of Any Citizen (Dr. Judy Selberg, Board Secretary)

[NOTE: This is an opportunity for any citizen to address the Board on any matter of concern to the citizen. The Board will listen to the remarks, but may not respond or answer questions. Unless the matter is already on the agenda for action, no action can be taken other than to instruct staff to include the matter on a future agenda. The president of the Board may limit the time for individual presentation and may limit the total time for all presentations. Citizens wishing to comment will be limited to one opportunity to speak. If a citizens group wishes to speak on the same subject, the group should choose a representative to deliver the message. The Chairperson may set a limit for organized group presentations and may set limits for each side when many persons request to speak on an agenda item. During Interactive Television (ITV) meetings, the chair will query each campus for those who wish to speak.]

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VI. Employee Council Reports

A. Faculty Council (Dr. Andra Goldberg) An update from the current Faculty Council President.

B. Staff Council (Meghan Knox) An update from the current Staff Council President.

VII. Board Report (Bare)

A. Policy Review, Weapons, Second Reading (Bare)(Appendix 2) To better align with State statute and to remain consistent with other community colleges in Arizona, the College is recommending updating policy 4.115 as outlined in Appendix 2. The update is proposed to more clearly communicate to students, employees and the general public, the expectation of conduct on College property. Also recommended at this time is moving the policy and any related procedures from Section 4 “Student Services and Financial Aid” to Section 6 “Plant Operations and Maintenance” Motion to approve the revision of policy 4.115, Weapons, as presented in Appendix 2 and its relocation from Section 4 “Student Services” to Section 6 “Plant Operations and Maintenance” Motion to approve the revision of policy 4.115, Weapons, as presented in Appendix 2 and its relocation from Section 4 “Student Services” to Section 6 “Plant Operations and Maintenance” with the following modifications:

B. Board Self Evaluation (Bare)(Appendix 3) The Mohave County Community College District Governing Board completes an evaluation of its performance annually. Trustees are requested to complete the evaluation instrument and submit it to staff by December 13, 2019. The compiled results will be presented at the January 10, 2020 regular meeting.

C. Association of Community College Trustees Annual Congress Trip Reports (McAlpine, Pascual, Selberg, Klippenstein) Trustees Susan McAlpine, Ashley Pascual, Judy Selberg and President Klippenstein attended the ACCT Annual Congress, October 16-19, 2019 in San Francisco to represent MCC. Conference materials provided by individual attendees have been posted to the Trustee Resources webpage under Profession Development. (www.mohave.edu/about/board/trustee-resources/)

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D. Arizona Association of Community College Trustees (McAlpine)(Appendix 4)

An opportunity for the designated representative to speak regarding the Arizona Association of Community College Trustees activities.

C. Trustee Other Reports (Bare)

An opportunity for individual trustees to speak regarding non-agenda informational items.

VIII. President’s Report (Dr. Stacy Klippenstein, President)

A. Mohave Minute (James Jarman, Director of Communications)

A video recap of the latest news from the College, including: CRUHSD College & Career Fair KUSD College & Career Fair * PTK Induction * Christina Henslee Published * BHC Domestic Violence w/ Police * Domestic Violence Silhouettes * Psych Instructors Sierra and Cole Stewart AZ Town Hall * Halloween Events * Children’s Literature Class Halloween * Day of Dead Art NCK * Substance Abuse Walk * London Bridge Parade * MC4 Tech Recycle * MC4 Game and Food Drive * Black Bear Hiring Event * President on Radio * President at FAFSA

B. One-Time Only Funding (Klippenstein) The Arizona legislature awarded $1,152,000 to Mohave Community College as part of a one-time-only (OTO) opportunity to fund Career & Technical Education (CTE) or Science, Technology, Engineering and Math (STEM) purchases. The window for submissions closed on Oct 31. The first round of reviews took place on October 15 with 27 proposals and a second round of review will be on November 12. The final compilation of recommendations will be November 22nd, after which a prioritized list will be submitted to the College President for final evaluation and approval.

C. Strategic Planning Update (Klippenstein, Strategic Planning Team Co-chairs Laurel Clifford and Shawn Bristle) Inclusion, collaboration and transparency guide Strategic Planning Team efforts. Emergent themes derived from multiple feedback efforts, especially the SWOT surveys received during the previous month, were identified in a team meeting on Nov. 7th, immediately following the Student Experience Workshops conducted at all campuses. Participation rates have been as good as or better than anticipated. Input from all constituents continues to be actively solicited, and multiple mechanisms and events ensure continuing access: updated strategic planning webpage, extensive emails and the dedicated Strategic.Planning@mohave.edu email address, upcoming Campus Advisory Committee meetings on all campuses, and upcoming listening sessions conducted by the President for both students and employees at all campuses.

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The Future Summit on Jan. 13 will be a fun, inclusive, and highly visible event that marks a turning point in the planning process. Simultaneously, progress reporting on the current twenty-five strategies and sub-strategies comprising the 2019-20 interim plan is underway, with the first formal updates collected in October.

D. College Affordability Act (Klippenstein)(Appendix 5)

The College Affordability Act (CAA) of 2019 was introduced by House Education and Labor Committee Chairman Bobby Scott on October 15, 2019. The bill is a comprehensive reauthorization of the Higher Education Act. Overall, the bill includes a number of provisions that institutions have historically supported and believe would be beneficial. In particular, the bill provides significant increases in student aid and institutional support. The bill also includes a number of provisions that could be problematic if implemented, as well as several proposals with significant consequences where the outcomes are unclear.

E. Arizona Community Colleges Coordinating Council (Klippenstein)(Appendix 6)

Updates from the meetings of the Arizona Community Colleges Coordinating Council (AC4), including state and federal legislative issues effecting Mohave Community College, state revenue collections and other fiscal issues.

F. Update of Current Events (Klippenstein) Updates on current events impacting the College.

IX. Instruction (Stephen Eaton, Chief Academic Officer)

Faculty Professional Development (Eaton) Mohave Community College has been offering faculty additional professional development in the form of the Learning and Teaching with Technology Expo (LATTE) since December 2011. This year’s offerings are being expanded, with the input of faculty, to encompass additional pedagogical and curricular opportunities such as assessment and program review. The event is scheduled for Thursday December 19, 2019 on the Bullhead City Campus.

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X. Student Service (Ana Masterson, Chief Student Services Officer)

A. Fall 2019 Enrollment Update (as of 11-06-2019)(Masterson)

Campus Bullhead Havasu Kingman North Online Total Credits Spring 20 2,350 1,952 2,062 343 4,434 11,141

Fall 19 8,323 6,448 6,887 1,008 12,955 35,630

Fall 18 7,377 5,548 6,041 1,302 12,394 32,662

B. Official Cohort Default Rate (Heather Patenaude, Director of Financial Aid)(Appendix 7)

Mohave Community College’s cohort default rate (CDR) has dipped below 15% for the first time since the 3 year measure was instituted with the 2009 cohort, with the most recently available figures showing the 2016 CDR for MCC at 14.8%. The national average is 15.9% for two-year public institutions. MCC’s Financial Aid Office’s goal is to help students become more fiscally responsible not only while in college but for the rest of their lives. As part of the College’s Default Rate Management Plan and working with various services and partners, MCC continues to focus on making sure students are financially literate, providing students with resources such as counseling sessions that inform them about how the loan process works. The financial aid office also sends debt summary letters that show each student their individual estimated debt, payment amount and overall money paid. MCC’s default rate was 32.7% in 2010, endangering the college’s ability to offer students federal aid.

XI. Administrative Services

A. Financial Services (Sonni Marbury, Chief Financial Officer) 1. Monthly Financial Reports (Marbury)(Appendix 8a and 8b)

a. Monthly Cash Flow Report – A report that visually represents the College’s fund

balance, expenses, deposits and amount invested with the state treasurer.

b. Expenditures & Revenue Report – A report that visually represents the College’s expenditures by function and object and its primary revenue sources with Year to Date Actuals.

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B. Human Resources (Jennifer Dixon, Chief Human Resources Officer) 1. Circle of Care (Dixon)(Appendix 9)

Mohave Community College is united in the aim to maintain life- long, valuable relationships with our students and communities, performing consistently and delivering value-added services with the highest level of quality, exceeding expectations. MCC’s Circle of Care Philosophy is based on personally caring for our students and communities, listening to their needs, and finding the right solution. Professional development opportunities will be launched around four themes: reducing effort, providing timely responses, providing consistent personalized attention and managing expectations.

2. Human Resources Reports (Dixon)(Appendix 10a and 10b)

The College’s human resources reports for the month ending October 31, 2019, reflecting new hires, transfers, reclassifications, title changes, separations and vacancies.

Motion to approve the Human Resources report for the month ending October 31, 2019 as presented in the appendix.

Motion to approve the Human Resources report for the month ending October 31, 2019 as presented in the appendix with the following modifications:

XII. Next Meeting (Bare)

The next regular meeting of the Mohave County Community College District will be Friday January 10, 2020 originating from the Neal Campus Kingman.

XIII. Adjournment (Bare)

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Minutes

MCCCDGB

Friday October 11, 2019 – 9:00 a.m.

Originating at: Bullhead City Campus Room #508

Also Available via Interactive Television at: Neal Campus Kingman Room #508

Lake Havasu Campus Room #508

North Mohave Campus Room #403

(Action Items are in bold print)

I. Call to Order (Dr. Julie Bare, Board President)

Dr. Bare called the meeting to order at 9:00 a.m.

II. Pledge of Allegiance (Bare)

Dr. Bare led the meeting in the recitation of the Pledge of Allegiance.

III. Roll Call (Amy Curley, Executive Assistant)

Bare Present

McAlpine Excused

Miller Present

Pascual Present

Selberg Present

IV. Approval of Meeting Minutes (Bare)(Appendix 1)

Dr. Bare stated that the draft minutes from the September 13, 2019 regular meeting appear in

Appendix 1 and called for a motion.

Vance Miller moved, Judy Selberg seconded, to approve the draft minutes from the September

13, 2019 regular meeting they appeared in Appendix 1. Without further discussion, the motion

carried 4-0. (Bare, Miller, Pascual, Selberg)

V. Audience of Any Citizen (Dr. Judy Selberg, Board Secretary)

Dr. Selberg stated that this is an opportunity for any citizen to address the Board on any matter of

concern to the citizen. The Board will listen to the remarks, but may not respond or answer

questions. Unless the matter is already on the agenda for action, no action can be taken other than

to instruct staff to include the matter on a future agenda.

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The president of the Board may limit the time for individual presentation and may limit the total

time for all presentations. Citizens wishing to comment will be limited to one opportunity to

speak. If a citizens group wishes to speak on the same subject, the group should choose a

representative to deliver the message. The Chairperson may set a limit for organized group

presentations and may set limits for each side when many persons request to speak on an agenda

item. During Interactive Television (ITV) meetings, the chair will query each campus for those

who wish to speak.]

Dr. Bare queried each campus individually. There were no citizens on any campus wishing to

address the Board.

VI. Employee Council Reports

A. Staff Council (Meghan Knox)

On behalf of Staff Council President Meghan Knox, Staff Council Vice President Amber

Johnson reported that the next meeting of Staff Council would be November 7, 2019. Staff

Council items addressed since the last report to the Board included the successful resolution

of discrepancies between fitness center rules on the three Southern campuses. Twenty one

faculty and staff on the Neal Campus Kingman have signed up to access the center since the

fee was discontinued compared to six last year. Staff Council representatives are working with

Student Activity Councils on the Neal Campus Kingman, Lake Havasu and North Mohave

Campuses to distribute a survey regarding tobacco products on those campuses. Items for

November’s agenda include employee health insurance and issues regarding new mothers.

B. Faculty Council (Dr. Andra Goldberg)

Faculty Council President Andra Goldberg reported that the new Allied Health representative

to the council is Dani Keza, Dental Hygiene faculty at BHC and congratulated her for recently

completing her Master’s Degree.

A new course assessment process is being developed by the faculty and the Chief Academic

Officer that is more comprehensive than the Cycle of Learning assessment that was in place.

The faculty are using Schoology assessment tools to align learning outcomes for goals and

objectives in several key courses in their program. This new process will analyze many

assessments in several courses instead of only one assessment in one course. The faculty are

looking forward to analyzing this data to improve success in these classes.

Lead faculty compensation and duties are under review for possible changes coming during

the next academic year. Lead faculty create course schedule recommendations, facilitate book

selections, coordinate program review reports, develop degree pathways, coordinate

curriculum updates and attend these meetings, and communicate with adjunct faculty in their

departments.

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Dr. Goldberg thanked the faculty who are participating on the Strategic Planning Team –

which had a great first meeting Friday October 4, 2019. Those faculty are: Laurel Clifford,

Math and Engineering Lead Faculty, LHC and Co-Chair of the SP Team, John Hansen, English

and Communications Lead Faculty, Neal Campus Kingman and Dr. Andra Goldberg, CIS

Faculty, Neal Campus Kingman

VII. Board Report (Bare)

A. Policy Review, Weapons, First Reading (Bare)(Appendix 2)

Board Secretary Dr. Judy Selberg stated that to better align with State statute and to remain

consistent with other community colleges in Arizona, the College is recommending updating

policy 4.115 as outlined in Appendix 2. The update is proposed to more clearly communicate

to students, employees and the general public, the expectation of conduct on College property.

Also recommended at this time is moving the policy and any related procedures from Section

4 “Student Services and Financial Aid” to Section 6 “Plant Operations and Maintenance”

Dr. Selberg stated that Dr. Klippenstein had satisfactorily briefed her on the recommendation

during a review of the draft agenda. Dr. Bare reiterated that this item is a first reading and

any individual member questions or comments should be directed to President Klippenstein

prior to the second reading, group discussion and vote at the November meeting. President

Klippenstein stated that review of the policy stemmed from requests brought forth to Staff

Council for clarification.

B. Arizona Association of Community College Trustees (McAlpine)

In Mrs. McAlpine’s absence, Dr. Bare took the opportunity to speak regarding the upcoming

Association of Community College Trustees Congress, which President Klippenstein, Dr.

Selberg, Mrs. McAlpine and Mrs. Pascual will be attending starting October 16. Dr. Selberg

stated that, as in the past, she will be focusing on one specific topic when selecting which

sessions to attend. At previous Congress’, those topics included the presidential search

process, crisis management and trends in higher education. Ms. Pascual stated that she has

chosen sessions on Board development. Both trustees are looking forward to returning with

valuable information to share at the November meeting.

C. Trustee Other Reports (Bare)

No individual trustees wished to speak regarding non-agenda informational items.

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VIII. President’s Report (Dr. Stacy Klippenstein, President)

A. Mohave Minute (James Jarman, Director of Communications)

Mr. Jarman presented a video recap of the latest news from the College, including: John

Hansen Andy Award, MCC employees on the Under 40 awards, MCC Business Office CAFR

Award, Camp Mohave Elementary Partnership, MCC at the County Fair, MCC faculty at

Kingman’s Positive Alternative campus, MCC recruiter at Kingman’s Club for Youth, Campus

Welcome Back Bashes, Veterans Coalition training, Senate Candidate Mark Kelly visit, FRANK

Talk Havasu (Immigration), 8th Grade CTE Event LHC, BHC Oktoberfest and Block Party,

MCC teams at Charity Golf tournaments, Kingman’s Andy Devine Days Parade and NCK

Blood drive.

President Klippenstein thanked not only MPIO but all college faculty and staff for the efforts

put forth on these events and for focusing on children and youth.

B. One-Time Only Funding (Klippenstein)

President Klippenstein reported that the Arizona legislature awarded $1,152,000 to Mohave

Community College as part of a one-time-only (OTO) opportunity to fund Career & Technical

Education (CTE) or Science, Technology, Engineering and Math (STEM) purchases. The

college developed a link for faculty and staff to propose ideas for allocating the award and the

window to submit proposals runs from October 1, 2019 to October 31, 2019. Submissions will

begin to be reviewed by a subcommittee for CTE and STEM mission fit on October 15. After

assessment of all proposals, the subcommittee will submit a prioritized list to the President for

final evaluation and approval. As of Thursday, October 3rd, there are 17 proposals (some

multi-part) submitted totaling over $4 million.

Chief Financial Officer Sonni Marbury reported that as of this morning, the total number of

proposals had increased to 30. Bullhead City Campus Dean Dr. Carolyn Hamblin developed

a process by which to analyze the submissions, including qualities like how many students

will be served and impact on local employers. Both Ms. Marbury and Dr. Hamblin have been

impressed with the quality of the submissions, many of which could hopefully be funded by

other means if not chosen for this One-Time-Only funding source. Dr. Selberg concurred that

the process sounded like an excellent precursor to submitting grant proposals. Ms. Pascual

agreed that the College should take advantage of the all the hard work that went into the

proposals and pursue alternative revenue sources if possible.

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C. Jenzabar One Transition (Mark VanPelt, Chief Information Officer)

Mr. VanPelt stated that the IT department is working with personnel from all areas of the

college to lay out a transition from Jenzabar EX to Jenzabar One. Outcomes and expectations

for Jenzabar One include: the student portal will become the easiest way for students to access

services such as guided pathways, financial aid and advising; background processes should

be simpler and easier for IT staff and modules used by faculty and other staff should become

more streamlined and intuitive. Training is being developed as the team moves forward to

ensure that all areas of the college receive preparation prior to the transition. The transition is

tentatively scheduled for April of 2020.

Dr. Klippenstein stated that there was no cost to upgrade the current EX system. The April

deadline will provide a soft launch during the Summer term, which is least impactful for the

students and more manageable for staff. Dr. Selberg stated that a more intuitive system would

be desirable. Dr. Bare reminded Board members that additional questions can always be sent

to the District Office.

D. Strategic Planning Timeline (Klippenstein and Chief Advancement Officer Shawn

Bristle)

Mr. Bristle reported that the Strategic Planning Team co-chairs formulated initial plans with

CampusWorks consultants on Sept. 27, establishing a sequence of process

milestones. Tentative dates for activities and meetings were identified, and the co-chairs are

working to finalize some of the dates. On the morning of Friday, Oct. 4th, CampusWorks

Project Leader Justin Norris facilitated two kickoff sessions. The President’s Cabinet group

learned details of the upcoming process and discussed their roles in it. The Strategic Planning

Team, comprised of students, employees and external representatives from all service areas,

began their important work. The team talked through the planning process in detail and spent

time analyzing the results of feedback sessions conducted at All-Staff Day in early September.

SWOT surveys, one for students and another for employees, are planned to be released on the

week of Oct. 14. Three activities are tentatively planned at the end of the first week of

November: a Strategic Planning Team meeting to review survey results and analyze themes;

a college-wide kickoff event/interactive workshop; a Governing Board workshop to introduce

the strategic planning process and to initiate discussion of the college mission and vision.

Mr. Bristle announced some recent developments including:

Marketing and Public Information has developed a Strategic Planning website to provide the

latest information to MCC’s constituents. The website can be viewed at:

https://www.mohave.edu/about/strategic-plans/strategic-plan-2025/

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November 7, 2019: Student Experience Workshop - will facilitate conversation on the broader

higher education environment and stimulate creative thinking. Part of the workshop will be

spent creating a student experience statement. Putting students first remains a priority of the

strategic planning process.

November 8, 2019: Mission, Vision and Values Workshop - CampusWorks’ facilitators will

support the Board of Governors in reviewing the institution’s mission, using the information

and trends that have emerged from the SWOT surveys as well as identify institutional values

that will help drive the execution of the strategies detailed in the strategic plan.

January 13, 2020: Future Summit - a half-day event educates internal and external audiences

about future trends that are specific to Mohave Community College, as identified in the SWOT

Analysis. Board members, faculty, staff, students, and community members come together to

develop impact statements that will feed development of the College’s strategic priorities

Dr. Bare asked if January 13 was a tentative date. Mr. Bristle responded that the thirteenth has

now been confirmed. Dr. Bare suggested that the strategic planning team could approach the

faculty about promoting the events their classes and perhaps attending during class, if it could

were relevant to the curriculum. Dr. Bare asked the other board members to take note of the

additional time being requested after the November 7 and potentially January 10 regular

meetings. Dr. Bare asked if materials could be gathered for the Board members to review and

prepare in advance so that the workshop(s) could be more productive and efficient. Mr. Bristle

stated that he would ask the consultants to prepare something.

E. 2019 AZ Strategic Vision Outcomes Report (Klippenstein)

President Klippenstein stated that in 2011, Arizona’s community colleges embarked upon a

long-term Strategic Vision to significantly increase the number of Arizonans who achieve their

postsecondary education goals. (Achieve60AZ) In order to measure progress toward the three

major goals outlined in the Strategic Vision, the colleges have implemented a rigorous self-

assessment and accountability process centered around the annual collection and distribution

of data related to 33 key indicators. The 2019 report will be posted on the MCC website when

available.

Dr. Klippenstein reviewed some highlights of the MCC data including:

Enrollment declines appear to be leveling off, with a slight increase for the last recorded

year.

Only 32% of instruction in 2017-18 occurred in traditional semester-length courses held

on campus Monday through Friday, 8am to 5pm. 68% of all student credit hours were

earned online, at night or on the weekends.

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MCC enrolls 24% of recent high school graduates in its service area. This number is

lower than the statewide average (34%) but higher than the national percentage (23%).

At just under $7,700 per year, the net price of attending MCC is just 18% of the Mohave

County median household income. This rate is substantially lower than Arizona’s

public universities (24-29%)

Forty-three percent of 2014-15 transfers from MCC to all four-year institutions, earned

a bachelor’s degree within four years though this percentage may reflect a high

incidence of part-time attendance after transfer.

Ms. Pascual stated that the report provides valuable data to be considered during the strategic

planning process.

F. AZ State-Level Reports: Councils, Legislative and State Budget Updates

(Klippenstein)(Appendix 3)

President Klippenstein reported briefly on the following items: AC4 discussed a needs for a

common online learning platform statewide to facilitate numerous initiatives; Marketing

encourage all colleges to follow Arizona Community Colleges on all social media platforms;

Kathy Hoffman, the State Superintendent of Public Instruction presented to AC4 to give a

status update on several initiatives her office is working on and outreach to AC4 on ways to

work together, including Perkins changes. The minimum requirement that is earmarked for

community colleges is 15% and it was suggested to look at what other states as Arizona’s

allocation is far below the national average; February 19, 2020 will be the community colleges

day at the Capitol in the Rose Garden; State revenue collections increased 1.9% above the prior

year for August and General Fund revenues during August were $19.1 million above the

enacted budget forecast.

G. Update of Current Events (Klippenstein)

President Klippenstein had no update on any current events impacting the College.

IX. Instruction (Stephen Eaton, Chief Academic Officer)

Radiologic Technology Update (Rich Crabb, Radiologic Technology Program Director)

Mr. Crabb presented data on program specifics, student success rates and employment statistics within MCC’s Radiologic Technology Program. The program at MCC exists because the medical community pointed out a need. The program has a history of success with five year Retention/Graduation rates of 88.4%, Job Placement rates of 88% (into career employment within 12 months of graduation) and National Exam Pass Rates of 93% (1, 2, or 3 attempts). As enrollment marketing efforts increased, the numbers of prospective students increased and the program currently has no difficulties filling program seats each year.

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In an effort to increase the prospective student pool, program staff is working more closely with advising to increase students’ program awareness and participate in regular RAD Information Sessions. Program growth is only limited by the availability of appropriate clinical sites (that meet accreditation requirements). The program provides students with high quality education focusing on procedures, safety, ethics and compassion; preparing graduates for entry-level jobs in the field. Ms. Pascual asked if the majority of the program’s graduates are employed in Mohave County. Mr. Crabb responded that most are with a couple in the Las Vegas metro. Dr. Bare if students are placed in outpatient imaging centers in addition to hospitals. Mr. Crabb responded yes, if the facility meets JCERT accreditation standards. President Klippenstein asked if JCERT might consider revisiting some of the regulations. Mr. Crabb responded that while the regulations protect the students, it does limit the availability of clinicals. JCERT also does not allow students to be placed in California. Dr. Klippenstein stated he was greatly impressed with the new ideas and dedication of Rad Tech Advisory Committee members

X. Student Service (Ana Masterson, Chief Student Services Officer)

A. Fall 2019 Enrollment Update (as of 10-01-2019)(Masterson)

Campus Bullhead Havasu Kingman North Online Total

Credits

Fall 19 8,252 6,440 6,850 970 12,966 35,478

Fall 18 7,377 5,548 6,041 1,302 12,394 32,662

B. 2018-2019 Enrollment and Student Success Initiatives Annual Report (Masterson)

Ms. Masterson presented the 2018-2019 Enrollment and Student Success Initiatives Report

which provides an overview of the College’s student population as well as current efforts and

initiatives that build on the foundation of Student Services at Mohave Community College,

which encompasses recruitment and admissions, assessment, learning and life assistance,

financial aid, enrollment management, advising and the call center. All of these play an

integral part in student success at MCC, which lends strongly to retention and completion. A

comprehensive enrollment management data review is also included in the report. The 2019

can be viewed online at: https://www.mohave.edu/assets/SS-Initiatives-Report-FINAL-

10.2.19.pdf

Ms. Masterson reported that the 18/19 Student Population Overall was 5,558 students (71,240

credits) of which 759 (14 %) students were dual enrollment. Basic demographics included: 66%

of the students were female, Hispanics were the leading minority (24+%), the average age was

27 years, the majority of the student population 30 years and younger with dual enrollment

being the significant contributor (50%). A majority are returning students (71%), 42% of new

students and 64 % of returning students received financial aid.

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18/19 grads took 7+ years to complete with a 2.8 GPA Average and 9 percent on academic

probation. General Studies, Liberal Art program popular among new students.

Results of the 18/19 Graduate Survey were graduates are invited to give feedback about MCC

experience, future plans include: 33% (172 out of 527) participated; 96% accomplished their

educational goals at MCC; Most worked full- (48%) or part-time (34%); Of those employed,

53% held job that was related to program of study; More than 50% intended to transfer to

another institution; 70% going into a major directly related to MCC major; 32% entered after

sitting out a year or more after high school; 26% came directly after high school; 28% entered

after being out of another college/university for a year or more.

18/19 Graduate Survey: Overall Satisfaction

My experience at MCC improved my life, 45% agree, 48% strongly agree

I accomplished my community college educational goals when I graduated from MCC,

43% agree, 56% strongly agree

I would recommend MCC to my family and friends, 44% agree, 54% strongly agree

If I had to start college over again, I would choose MCC, 42% agree, 48% strongly agree

18/19 Graduate Survey: Overall Satisfaction (continued)

MCC friendly place, 42% agree, 56% strongly agree

Glad I attended MCC, 45% agree, 52% strongly agree

MCC did excellent job of preparing me for full-time work chosen in my career/profession,

52% agree, 40% strongly agree

MCC did an excellent job of preparing me for future study at a four-year institution, 57%

agree, 39% strongly agree

18/19 Graduate Survey – Service Satisfaction

Personal Safety, 41% satisfied, 59% very satisfied

Overall academic experience, 48% satisfied, 49% very satisfied

Instructor knowledge, 42% satisfied, 56% very satisfied

Class size, 45% satisfied, 52% very satisfied

Accessibility of instructors, 48% satisfied, 49% very satisfied

Campus front office, 41% satisfied, 45% very satisfied

Academic advising, 51% satisfied, 37% very satisfied

Student life (activities & events), 34% satisfied, 24% very satisfied

18/19 Graduate Survey – Improved Skills/Abilities

Reading Comprehension, 13% little improvement, 38% moderate, 39% much

improvement

Mathematical Problem Solving, 13% little improvement, 38% moderate, 41% much

improvement

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General knowledge, intellectual curiosity in variety of subject areas, 13% little

improvement, 34% moderate, 47% much improvement

Appreciate cultural differences, 15% little improvement, 36% moderate, 34% much

improvement

Increasing Access at MCC via: Multiple Assessment Measures (ACT, SAT, Accuplacer, High

school GPA, Performance in a prior, recent math/English high school course), EdReady - online

educational tool that assists students through remediation, Marketing, promotion, outreach,

Funding / Payment Plan, Financial Aid & Access, Dual Enrollment

Increasing Retention / Student Success at MCC via:

Advising (Diverse offerings - intrusive, prescriptive, developmental, online, onground -,

Milestone advising – 90% participation rate, Comprehensive from current to completion to

assist with timely graduation, Successful start advising,

Comprehensive introduction to MCC – campus tour, student life information, academic

planning, MCC resources & academic policies, Online orientation, Survive & Thrive in

College course (STU 103), Student Life.

Early Alert (Academic, Life Issue & Financial “alerts” + tutoring referral), Success Plans for

academically dismissed or probation students which includes financial aid, support

services, student success information.

Student Success Center (peer tutoring, supplemental instruction, additional third party

online tutoring, 24/7 free online counseling, community guide, EdReady, emergency grant,

focused communication.

Increasing Graduation and Transfer via: Articulation, Agreements allow for smooth transfer

by providing academic pathways, Reverse associate degrees, Transfer NEW opportunities

(Prescott College, DeSales University, Westminster College and Southern New Hampshire

University, Nursing (RN-BSN) concurrent enrollment agreements created with University of

Phoenix & Regis University), Partner webpage at mohave.edu, transfer fairs, Continual

program review to ensure quality.

Ms. Pascual asked several question about the presentation and report, specifically:

1. Financial Aid Spending by Year – LEAP (Leveraging Educational Assistance Partnership)

Grants (Slide 14): Ms. Pascual could not ascertain from the chart if any LEAP grants had

been awarded. Ms. Marbury stated that the category was hard to see because the amount

is small in comparison to other awards depicted. Ms. Masterson did not have the exact

amount of LEAP disbursed and will follow up.

2. Time to Graduate by Program and Campus (page 23-25): Ms. Pascual stated that the table

did not reflect by campus only by program. In addition, Ms. Pascual questioned whether

some of the calculations might have been skewed by outliers such as in the case of

programs whose time to graduate was in excess of 8 years.

11

Ms. Masterson replied that she had reviewed those exact calculations with MCC’s

institutional research team when they were delivered to her and yes, there are various

factors that could have impacted the final calculation. For example, the date used to “start

the clock” is the date of admittance, not the date of enrolling in the program. Deeper dives

can be done on factors such as average credits taken per semester, etc. Dr. Klippenstein

added that the College has already started reviewing the data sets and will be able to

provide the Board additional information shortly. Dr. Bare stated that she, personally, did

not feel data divided out by campus was appropriate for the Board, whose duties and

responsibilities are for the entire district; however, believes that decision lies with the

administration.

3. Graduate Satisfaction Survey: Ms. Pascual asked if it was standard procedure to survey all

students, not just graduates, whom have obviously been successful in completing their

degrees. Ms. Masterson replied that the College had surveyed the entire student body in

2016 via the Survey of Entering Student Engagement (SENSE) and Community College

Survey of Student Engagement (CCSSE). As this was prior to Ms. Pascual’s service on the

Board, Dr. Bare suggested those survey results be provided to Ms. Pascual.

Dr. Selberg inquired as to whether GCU (Grand Canyon University) not being represented on

the “Institutions that Graduates Planned to Attend after MCC” (page 28) was an accidental

omission. Ms. Masterson responded that no students who responded to the survey indicated

they planned to attend Grand Canyon.

Ms. Marbury was asked how many students participate in the payment plan. Without access

to exact number at the present, Ms. Marbury estimated 500 students.

Dr. Bare thanked Ms. Masterson for her detailed presentation, stated that the report will be a

valuable asset during the strategic planning process and encourage Board members to review

it thoroughly.

C. Official Cohort Default Rate (Masterson)(Appendix 4)

Ms. Masterson reported that the FY 2016 official cohort default rates were delivered to both

domestic and foreign schools on September 23, 2019. MCC’s official rate for the FY 2016 cohort

is 14.8%. The national average for 2-year public institutions is 15.9%. Financial Aid Director

Heather Patenaude will provide a more extensive presentation regarding MCC’s Default

Management Plan at the November 8, 2019 regular Board meeting.

Mohave Community

College FY2016 FY2015 FY2014 FY2013

FY2012

FY2011 FY2010

Default Rate 14.8 17.7 17.4 18 22.7 28.6 32.7

12

XI. Administrative Services

A. Financial Services (Sonni Marbury, Chief Financial Officer)

1. 2017-2018 Comprehensive Annual Financial Report (Marbury)(Appendix 5)

Ms. Marbury reported that for the seventh year in a row, the Certificate of Achievement

for Excellence in Financial Reporting has been awarded to Mohave Community College by

Government Finance Officers Association of the United States and Canada (GFOA) for its

comprehensive annual financial report (CAFR). The Certificate of Achievement is the

highest form of recognition in the area of governmental accounting and financial reporting,

and its attainment represents a significant accomplishment by a government and its

management.

2. Monthly Financial Reports (Marbury)(Appendix 6a and 6b)

a. Monthly Cash Flow Report – Ms. Marbury presented a report that visually represents

the College’s fund balance, expenses, deposits and amount invested with the state

treasurer.

b. Expenditures & Revenue Report – Ms. Marbury presented a report that visually

represents the College’s expenditures by function and object and its primary revenue

sources with Year to Date Actuals.

B. Human Resources (Jennifer Picard, Human Resources Generalist)

1. Human Resources Reports (Picard)(Appendix 7)

Ms. Picard presented the College’s human resources reports for the month ending

September 30, 2019, reflecting new hires, transfers, reclassifications, title changes and

separations.

Vance Miller moved, Ashley Pascual seconded, to approve the Human Resources report

for the month ending September 30, 2019 as presented in the appendix. Without further

discussion, the motion carried 4-0. (Bare, Miller, Pascual, Selberg)

XII. Next Meeting (Bare)

Dr. Bare stated that the next regular meeting of the Mohave County Community College District

will be Friday November 8, 2019, originating from the Lake Havasu Campus.

XIII. Adjournment (Bare)

Dr. Bare adjourned the meeting at 10:52 a.m.

Effective Date: PPM Posted:

PROCEDURE CHANGE RECOMMENDATION

TO: Governing Board

FROM: President Klippenstein, President’s Council and Policy and Procedure Committee

Policy # 4.115

Submitted: 09/19/2019 Reviewed: 09/30/2019

New Revision Deletion

Current Policy: 4.115 Weapons Policy As defined in ARS §13‐3102 A1, A2 and A10, all persons on Mohave Community College property are prohibited from carrying weapons or simulated weapons, represented by the person in possession of the simulated weapon to be a weapon, with or without a permit, on their person or in their vehicles or concealed within their immediate control. Those items include, but are not limited to: all firearms, sheath knives, boot knives, swords, pocket or folding knives with a blade length greater than three (3) inches, crossbows, long bows, compound bows, sling shots, any instrument under the circumstances of use that could cause death or serious injury, nunchakus, throwing stars, darts, throwing knives and related martial arts weapons, explosives, explosive devices, ammunition and ammunition components or dangerous chemicals (such as Mace, tear gas, or oleoresin capscicum), but excluding normally available over‐the‐counter, self‐defense chemical repellents. Persons excluded from this policy:

Any certified peace officer currently employed by a law enforcement agency.

Any person possessing a weapon for education demonstration proposes.

Recommended Policy:

6.007 Weapons Policy Unauthorized use, possession, or display of firearms and other weapons, dangerous instruments, explosive devices, torches, devices with open flames or fireworks on Mohave Community College property or at college sponsored events is prohibited. Subject to ARS §12-781, a person may lawfully transport or lawfully store a firearm that is both 1) in a person’s locked and privately owned motor vehicle or in a locked compartment on the person’s privately owned motorcycle and 2) not visible from the outside of the motor vehicle or motorcycle.

Persons excluded from this policy: Any certified peace officer currently employed by a law enforcement agency.

Persons not excluded from this policy: Concealed carry permit holders

References: ARS § 12-781, 13-2911, 13-3102, 13-1502, and 13-1503

Effective Date: PPM Posted:

Procedure (Proposed) Definitions: For the purpose of this policy the following definitions will apply. Weapon: Any object or substance designed to inflict a wound, cause injury, or incapacitate, including without limitation all firearms, BB guns, air guns, pellet guns, switchblade knives, knives with blades five inches long or more. Also, chemicals such as mace, tear gas or oleoresin capsicum, but excluding normally available over-the-counter self-defense repellents. Chemical repellents labeled “for police use only” or “for law enforcement use only” may not be possessed by the general public. Fireworks: Any fireworks, fire crackers, sparklers, rockets or any propellant activated devise whose intended purpose is primarily for illumination. Explosive: Any dynamite, nitroglycerin, black powder or other similar explosive material including plastic explosives. Also, any breakable container that contains a flammable liquid with a flash point of 150 degrees F or less and has a wick or similar device capable of being ignited (example: “bottle bomb”)

2019

MCCCDGB Annual Board Evaluation

Mohave County Community College District

Governing Board

The mission of Mohave Community College is to be a learning-centered institution, serving all constituencies,

inspiring excellence through innovation and empowering students to succeed. Mohave Community College

strives to be recognized as a resource for educational, cultural and civic activities by the communities it

serves.

The Process:

Each board member is encouraged to review the document and complete individual self-evaluation prior

to meeting with the board as a whole.

Items in the document were selected from the ACCT website and are consistent with MCC GBP 1.065 -

Powers and Duties of the Governing Board.

ACCT recommends that Governing Board Members establish annual board goals. This is collaboratively

accomplished during the GB review.

Link: https://www.mohave.edu/assets/PP_Manual.pdf

INDICATORS:

1 O I (we) operate at an optimum level of performance.

2 S I (we) operate at a sustainable level that is satisfactory to me as I review my performance and consider

areas of strength/growth.

3 G I (we) operate at an acceptable level, but my (our) growth in this area would lead to optimal

performance.

4 I I (we) suggest improvement for me (the board).

1. BOARD OPERATIONS Scale: 1 = “O”; 2 = “S”; 3 = “G”; 4 = “I” (see indicators)

Avg.

1.1 The Board holds annual workshop(s) for professional development and to explore contemporary issues in community college governance.

1.2 The Board regularly reviews reports on student learning outcomes, and demonstrates a concern for the success of all students.

1.3 The Board spends sufficient time discussing the future direction of the College, and maintains a visionary focus during board discussions.

1.4 Trustees treat one another with respect and work together in a spirit of harmony and cooperation to accomplish the work of the Board.

1.5 The Board considers and respects minority opinions.

1.6 The Board openly discusses issues and maintains appropriate relations with constituent groups.

1.7 The Board accommodates the differences of opinion that arise during debates of issues and once a decision is made, Trustees cease debate and uphold the decision of the Board

1.8 The Chair serves as the voice of the Board when dealing with the public and media

KNOWLEDGE & UNDERSTANDING Scale: 1 = “O”; 2 = “S”; 3 = “G”; 4 = “I” (see indicators)

Avg.

2.1 The board understands and adheres to its roles, responsibilities, and a code of ethics.

2.2 An examination of the Board's work provides clear evidence that the Board understands that its primary function is to establish the policies by which the community college is administered

2.3 The Board understands the budget, the budget process and the financial health of the college

2.4 The Board is knowledgeable about the mission and purposes of the institution.

2.5 The Board is knowledgeable about the educational programs and services of the College, and seeks appropriate information about same from the President.

2.6 The Board is knowledgeable about major social and economic trends and issues that affect the community college institution.

2.7 The Board understands state and federal accountability requirements, and reviews accountability reports to state and federal agencies.

2.8 The Board understands and protects the academic freedom of the faculty, administration, staff, and students.

2.9 The Board understands the political implications of its actions, and considers the implications once a decision is made.

3. MISSION AND POLICY Scale: 1 = “O”; 2 = “S”; 3 = “G”; 4 = “I” (see indicators)

Avg.

3.1 The Board focuses on policy in board discussions, not administrative matters

3.2 The Board requires and is involved in long-range fiscal planning.

3.3 The Board monitors the effectiveness of the college in fulfilling the mission, and requires the college to regularly evaluate program effectiveness.

3.4 Decisions about budget allocations are based on evidence of program effectiveness and linked to plans to increase rates of student success

3.5 The College routinely evaluates effectiveness of efforts to improve student success and uses the results to improve policy and practice

3.6 The Board has policies that require fair and equitable employment processes, and is committed to equal opportunity.

3.7 Annual review of all facilities is conducted by the President, and presented to the GB. In turn, GB policies adequately address parameters for facilities maintenance, appearance, safety, and security.

3.8 The Board has a long-range facilities plan.

3.9 The vision and goals of the institution adequately address community needs.

4. BOARD – PRESIDENT RELATIONSHIP Scale: 1 = “O”; 2 = “S”; 3 = “G”; 4 = “I” (see indicators)

Avg.

4.1 The Board maintains open and effective communication with the President

4.2 The Board and President have a positive, cooperative relationship that reflects mutual trust and respect.

4.3 The Board clearly delegates the administration of the college to the President.

4.4 Through its behavior, the Board sets a positive example for the President and other employees.

4.5 The Board has policies that require adequate participation in decision-making within the institution and through the President, seeks advice and recommendations from faculty, staff and students in developing policies.

4.6 The Board spends sufficient time planning and providing clear priorities for the President and the College

4.7 The Board encourages the professional growth of the President

5. TRUSTEESHIP Scale: 1 = “O”; 2 = “S”; 3 = “G”; 4 = “I” (see indicators)

Avg.

5.1 Trustees understand that they have no legal authority outside board meetings.

5.2 As a Trustee, I adhere to confidentiality expectations and requirements.

5.3 Trustees are prepared for board meetings and meetings are conducted in such a manner that the purposes are achieved effectively and efficiently

5.4 The information requested by and provided to Trustees does not put an undue burden on staff.

5.5 Trustees are knowledgeable about the college, recognizing positive accomplishments and speaking positively about the institution in the community.

5.6 Trustees are knowledgeable about state and national laws and educational policy issues.

5.7 The time I dedicate to my responsibilities as a Trustee is worthwhile.

5.8 As a Trustee, I am satisfied with the overall effectiveness of board management and organization.

5.9 I enjoy and am satisfied with my role as a Trustee.

6.0 Trustees actively support the MCC foundation and its efforts.

ADDITIONAL COMMENTS:

1

AACCT Strategic Direction Planning September 7 2019 Hassayampa Inn, Prescott, AZ

Attendees representing 8 Arizona community colleges

AGENDA Goal of session: To make decisions for the collective good of AACCT & the future of community colleges. • Welcome & introduction • Discussion: impact and value of AACCT • Assessment of organization: past, present & desired future state • Discussion of successes and challenges • SWOT analysis • Discussion of professional future • What now? Plan • Wrap up & appreciations WHAT AACCT DOES FOR COMMUNITY COLLEGES OR TRUSTEES Advocate, teach, educate, organize for effectiveness, update, support, promote, coordinate, convene, collaborate THE VALUE AACCT PROVIDES

10 college systems = 1 voice: Identify ROI of our collaborative, collective interest, Self-defense, stronger together, we can influence by being cohesive, have unity

Student success is community success

Voice on workforce issues CURRENT STRENGTHS OF AACCT

• 52 board members; committed and connected trustees. Mission driven. Increased collaboration. Passion. Entrepreneurial. Creativity. Enthusiastic.

• 8 of 10 colleges: unity. Gathering together annually. • Student success & community mindedness & our students stay in our region • Some facilities • College Community Foundation • Communicating successes (within colleges) • Local control • Workforce linkage • # of constituents

2

• Distance learning • Marketing/branding • Some financial support

CURRENT WEAKENESSES OF AACCT

• Legislature support, governor support (how do we educate/get this message to the governor?)

• Lack of marketing, fundraising • Lack of resources (human and $). We are all volunteers • No seat at the state level • Lack of goals • Lack of public understanding, community involvement • Our communication (challenges of geography, separate colleges, diverse

thought, siloed, history, turnover of trustees) • Divergent priorities

OPPORTUNITIES FOR AACCT

• Marketing with collective messaging • Business partnerships & pathways (internships, non-partisan, etc.) • How could we include the other 2 colleges? • Learning worker and working learner (upskill the American workforce, new

programs) • Community involvement • Fundraising • Governor support and understanding • Legislative understanding • Educating community • “Playing nice” with other educational institutions • New technology • Can be a leader in mental health solutions • Maximizing this network/rapport/relationships • Uniformity of priorities • Strength in #s: greater influence •

THREATS TO THE MISSION & IMPACT OF AACCT

• Insufficient talent pool for leadership, loss of key leaders • Lack of community understanding (and how we are funded) • Miscommunication, gossip, social media (incorrect information) • Funding, costs, loss of financial support. More $ is needed to run this

organization (only $10,000 is currently invested in this organization) • Less students: Enrollment #s are down/graduation transfer (social, financial,

disengagement) • Health: mental health challenges (legality, reporting, social), safety • Shifting political landscape • Demographic changes

3

• Tech changes • Unsustainable business model • Trust (only 8 colleges represented here) • Competing interests (rural or urban) or priorities, internal polarization (diverse

ideologies) • Legislative priorities • Clear mission

3 LARGEST THREATS TO COMMUNITY COLLESGES AND HOW THIS ORGANIZATION CAN HELP

• Funding • Political landscape • Perceived value of higher education • Location • Enrolment decline

TOP PRIORITIES FOR AACCT FOR 2019-2020

1) Strategic Plan, create Mission and Vision 2) Legislative advocacy, legislative support, trustee education, trustee competency,

funding for advocacy, advocate for funding 3) PR (singular voice), Marketing (we are we & about what), establish sustainable

structure, keep members engagement IDEAS FOR ENGAGEMENT WITH AC4

Shared staffing with AC4

Shared invoice with AC4 (keep independent meetings)

Engage AC4 in strategic planning for AACCT o Plan routine meetings with them (1-2/yr) to share priorities

Look what other states are doing FUNDING IDEAS FOR AACCT

Budget of $100,000, $200,000, $100,000, $250,000, $150,000, $150,000

Dues, increased dues, Use present funds from membership dues, larger member fee

Flat fee + amount/FTSE or % or org. budget (then divide among all of CCs budget), % of each college budget (after org. needs are established), Dues billed to each college based on FTSE, increase contribution from each college, allocate budget needs to members based upon FTSE, equitable funding, flat fee & FTE formula, annual dues base on both flat fee & variable fee determined by FTES

Determine need and then fund it (how?), approve a budget

Partnerships (without hidden agendas)

Donations

Fundraising, broader fundraising strategy, state, gov, leg funding, dept of labor

Grant, ask Bill & Melinda for $, state funding (grants), grants, grants,

PT staff (for conference, development, on-boarding)

Sponsorships, more events

4

Ads in conference materials

Foundation support (Helios, etc.) NEXT STEPS TO MOVE PRIORITIES FORWARD

1) Convene executive committee a. Create Strategic Plan b. Come up with timeline

2) Review Priorities 3) Budget created

PARKING LOT – Developed Questions

1) How might we improve the on-boarding process for faster assimilation into AACCT (knowledge sharing, etc.)

2) Who can/will take the lions share of the work? 3) How can we get all 10 colleges in attendance at these events? 4) Does this group have the capacity to support an AZ community college that is

“under fire”/emergency? 5) How do we activate the network?

This Photo by Unknown Author is licensed under CC BY-SA

The College Affordability Act of 2019

Short Summary

Overview

The College Affordability Act (CAA) of 2019 was introduced by House Education and Labor

Committee Chairman Bobby Scott on October 15, 2019. The bill is a comprehensive

reauthorization of the Higher Education Act.

Overall, the bill includes a number of provisions that institutions have historically supported and

believe would be beneficial. In particular, the bill provides significant increases in student aid

and institutional support, especially for institutions that have been historically under resourced.

The bill incorporates community proposals on matters such as the simplifying the application

process for federal student aid; streamlining student loan repayment; enhancing student aid for

graduate studies; strengthening Public Service Loan Forgiveness; and expanding support for

Historically Black Colleges and Universities, Hispanic-Serving Institutions, Tribal Colleges and

Universities and other Minority-Serving Institutions.

Unfortunately, the bill includes a number of provisions that would be problematic if

implemented, as well as several proposals with significant consequences where the outcomes are

unclear due to lack of reliable data for analysis or due to a lack of specificity in the legislative

text. In particular, the bill relies on complicated and burdensome processes that will likely

undermine many of the worthy goals of the legislation, including the benefits of increased

federal support for students and institutions.

Summary

The CAA is a massive bill, comprising 1,165 pages as introduced, and it touches on a vast array

of new and existing programs and their interactions with higher education. This summary is

intended to provide a brief overview of key points on the legislation. Please refer to ACE’s

comprehensive summary of the bill for detailed information on the bill as a whole, as well as the

additional materials on CAA and HEA reauthorization more broadly that are available on our

website.

Federal Intrusion into Accreditation

The College Affordability Act would represent an unprecedented federal intrusion into the nature

and structure of accreditation. A technical review panel would establish common definitions of

terms and metrics to be used by all accrediting agencies. Accreditors would be required to

differentiate institutions by assigning them to groups of comparable institutions and then

determining which of the federally-defined metrics would be used to evaluate institutions in the

areas of completion, progress toward completion, and workforce participation.

The legislation imposes requirements on accreditors to publicize information on websites

regarding actions taken against institutions far beyond current measures to ensure the

2 Prepared by the American Council of Education on October 15, 2019 and subject to revision.

This summary is based on the legislative text as introduced on October 15, 2019

transparency of accreditor actions. In addition, it reduces the reporting period for these actions

from 30 to 10 days. It amends the prohibition on the Secretary to allow for regulations on student

success and explicitly permits the Secretary to require accreditors to review and revise the

standards or performance benchmarks set by accreditors if the Secretary deems them

inappropriate for the selected group of comparable institutions, granting the Secretary ultimate

approval over the standards. The Secretary would then produce public report cards with detailed

information, evaluating accreditors’ effectiveness as gatekeepers.

The legislation creates extensive new requirements on states to inform the Secretary about any

adverse state action against an institution (including revocation of a license) and states must

evaluate each institution and determine if it meets the professional licensure requirements in the

state in which it is seeking authorization. Furthermore, policies are to be established to anticipate

and respond to the closure of an institution, including extensive teach-out requirements.

Increased Funding for Programs

The College Affordability Act significantly increases federal student aid. The legislation, if

passed, would add an immediate $500 increase to the maximum Pell Grant award, and would

index annual increases in the maximum award to the Consumer Price Index (CPI) going forward.

The bill extends overall Pell eligibility to 14 semesters (from the current 12), would exempt

remedial or noncredit courses from counting against that eligibility period, and allows for Pell

Grant eligibility to be carried into post-baccalaureate studies, so long as a student has already

received Pell as an undergraduate and has remaining eligibility.

Beyond the changes to Pell Grants, the CAA would provide additional supports to students and

institutions. In addition to proposal mentioned above, these include:

$6 billion annually to restore the Perkins Loan program

Increased annual allocations to the Federal Work-Study (FWS) and Supplemental

Educational Opportunity Grant (SEOG) programs

An emergency grant aid program through SEOG to support students with unexpected

challenges

$250 million annually for community colleges to develop or support dual-enrollment

programs

$1 billion annually for grants to community colleges to improve completion

$500 million annually awarded to institutions as bonus funding for graduating Pell

recipients

Elimination of origination fees on federal student loans

Overall, CAA is estimated to provide over $400 billion in support for programs impacting

college affordability and institutional support.

3 Prepared by the American Council of Education on October 15, 2019 and subject to revision.

This summary is based on the legislative text as introduced on October 15, 2019

Changes to Federal Student Aid and Processes

The bill would make a number of changes to current law to simplify the process of applying for

student aid and managing repayment. This bill identifies ways to simplify the Free Application

for Student Aid (FAFSA), primarily by segmenting the application process into three pathways:

1. Applicants who received a means-tested Federal benefit within the previous 2 years.

(Automatic zero EFC.)

2. Applicants who did not receive any means-tested Federal benefit within the previous 2

years, who have adjusted gross income equal to or less than $60,000, and who were not

required to file an income tax return or who filed an “uncomplicated” tax return, i.e. that

did not include any of 10 specific Schedules. (Simplified needs test.)

3. All other applicants.

The bill also includes proposals to simplify repayment by consolidating the multiple existing

repayment plans into two options; (1) a fixed monthly payment repayment plan, and (2) an

income-based repayment plan. The legislation would also align the Public Service Loan

Forgiveness program with these repayment plans, define eligible professions for forgiveness,

then establish additional steps in the application process.

This legislation includes the option to allow “qualified” borrowers to refinance private student

loans into federal plans. These loans would carry the same terms as a federal direct unsubsidized

Stafford loan.

In addition, the institutional allocations for FWS and SEOG would be phased out of their current

levels and to a new allocation based on an institution’s “fair share amount” which is calculated

using several factors representing the financial need of an institution’s student body, a number of

which would be calculated using data not currently reported. While for-profit institutions would

be excluded from participation, a much larger pool of nonprofit institutions would be eligible to

participate, making it difficult to estimate the impact on individual institutions.

Burdensome Reporting

The proposed bill would generally impose heavy reporting requirements across many programs.

The bill includes expansive federal definitions of “hazing,” “harassment,” and “sexual

harassment” and contains amendments to the Clery Act governing the reporting of crimes that

would add new reporting categories for harassment and hazing incidents, with requirements for

detailed information on hazing instances, despite the fact that these incidents do not align with

the definitions of a crime under the UCR currently used for Clery reporting. These new reporting

requirements would be coupled with an institutional obligation to provide students with an

educational program on hazing prevention. Fines for violation of the Clery Act would increase to

$100,000 (from the current $25,000).

Proposed changes also contain the addition of “sexual harassment” to the Violence Against

Women Act (VAWA) categories that previously included sexual assault, domestic violence,

dating violence, and stalking. The bill would also require institutions to conduct climate surveys

regarding student experiences with sexual assault, sexual harassment, domestic violence, dating

4 Prepared by the American Council of Education on October 15, 2019 and subject to revision.

This summary is based on the legislative text as introduced on October 15, 2019

violence, and stalking every two years using a “standardized online survey tool” developed by

the Secretary.

In addition, an array of new crime statistics will be encompassed in mandatory reporting for

every study abroad program that institutions award credit for, even in cases where the institution

is not offering the program. With these new statistics in place, colleges and universities must

conduct biennial reviews to determine the effectiveness of the program at protecting students

from danger and crime as well as determine if there is a need for changes. Reports would need to

include deaths, sexual assaults, accidents and illnesses requiring hospitalization, and incidents

involving police.

The legislation would also restore in statute the gainful employment regulations that had been

rescinded, and which required significant reporting burdens on institutions offering programs of

training “that prepare students for gainful employment in a recognized occupation.” The

Secretary would have to develop performance metrics to assess programmatic performance and

subsequent eligibility for Title IV financial aid, including the use of a debt-to-earnings ratio.

Mandated Positions

The legislation would, in multiple instances, require institutions to hire staff to perform specific

roles, as well as mandate that institutions create and/or staff specific offices on campus.

Examples include:

Requiring institutions to designate a Title VI of the Civil Rights Act compliance officer

and annually submit a report to include any acts of noncompliance.

Institutions would need to designate a liaison for homeless and foster care youth.

Institutions would need to create an “Office of Accessibility” independent of, or

overlapping with, existing institutional disability support services offices.

America’s College Promise

The proposed legislation includes America’s College Promise Act (ACP) language to allocate

roughly $93 billion over ten years to create a two-year community college partnership with states

that choose to apply. This would instruct the federal government to cover a 75 percent (95

percent for certain Indian tribes) match of the average resident community college tuition and

fees, with funding adjusted annually by the lesser of CPI or 3 percent.

To participate, the state would need to commit to waive all community college tuition and fees,

and agree to implement a series of changes which include the provision of a significant array of

student services and supports, as well as state-wide requirements on degree pathways between

two- and four-year institutions. States would likewise need to supplement, rather than supplant,

existing state support for higher education.

Funds remaining after covering community college tuition and fees could then be used by states

to expand the capacity and scope of skills training at community colleges, improve post-

5 Prepared by the American Council of Education on October 15, 2019 and subject to revision.

This summary is based on the legislative text as introduced on October 15, 2019

secondary readiness, expand access to dual or concurrent enrollment programs, and improve

four-year institution affordability. With a tiered list of alternatives for unallocated funds under

ACP, funds could be used for “Pathways to Student Success,” unmet need for Pell grant

recipients, unmet need for all students within a state, covering cost of tuition waivers for students

at public institutions and then tuition waivers at private, non-profit institutions within a state, in

that order.

Short-term Pell Grants

The legislation extends Pell eligibility to short-term job training programs. These grants would

carry roughly the same terms and conditions as standard Pell awards, though students cannot be

eligible for standard Pell and short-term Pell simultaneously. Programs at for-profit institutions

are not eligible to participate.

For job training programs to be considered for eligibility they must:

provide between 150-600 hours of instructional time of a period between 8-15 weeks;

provide training aligned with the requirements of high-skilled, high-wage, or in-demand

industry sectors or occupations in the State or local area in which the job training

program is provided;

provide a credential that is determined to meet the needs of employers and satisfies the

requirements for licensing or certification;

ensure the credits earned are acceptable for degree or certification program requirements;

provide to the Department of Education (ED) the expected earnings of students after

completion that must be higher than that of a high school graduate; and

maintain a 70 percent completion rate and a 70 percent placement rate for students within

six months of completing a program.

Accountability Provisions

Lastly, a complicated accountability system would be implemented under CAA that adjusts the

current cohort default rates (CDR) to a new adjusted CDR (or aCDR), before adding an on-time

repayment calculation as an additional measure, the terms of which would be determined by the

Secretary through negotiated rulemaking. Institutions failing the on-time repayment metric

would then be assessed on the basis of their instructional spending, and then on the basis of their

marketing spending relative to their Title IV funding, with the possibility of using other

categories of institutional spending for the purposes of appeal. The proposal outlined in the

legislation is extremely complicated, and lacks sufficient detail to reasonably anticipate its likely

impact and effectiveness.

2016 Cohort Default Rate:From Over 30% to Under 15%

November 8, 2019 Board of Governors Meeting

Agenda

• Historical Data• Every Cure Counts• Default Prevention Efforts• Preparing for the Future• Questions

Historical Cohort Default Rates

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

2009 2010 2011 2012 2013 2014 2015 2016

National and State Comparison

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

2009 2010 2011 2012 2013 2014 2015 2016

DEF

AUL

T RA

TE

COHORT YEAR

MCC National Public (2-3 yr) State (AZ)

Historical Cohort Headcounts2009 2010 2011 2012 2013 2014 2015 2016

Defaults 313 368 304 253 180 152 140 90Cohort Size 853 1123 1060 1110 998 869 788 605CDR 36.6% 32.7% 28.6% 22.7% 18.7% 17.4% 17.7% 14.8%

From Sanctions to Rewards

Over 30%

• Default Management Plan required

• Risk losing access to federal funding

Under 15%

• 3 consecutive years• Single disbursement

for 1 semester loan• Eliminate 30 day delay

for new borrowers

Every Cure Counts2017 2018 2019 2020

Current Defaults 67 41 0 0Current Cohort Size 510 396 356 196*Current Rate 13.14% 10.35% 0.00% 0.00%Current Projected Rate 12.75% 14.90% N/A N/A

MAXIMUM ALLOWED DEFAULTS TO MAINTAIN 14.8% DEFAULT RATEProposed Defaults 75 59 53 29Recalculated CDR 14.8% 14.8% 14.8% 14.8%

*Current Denominator for 2020 is an estimate based on number of borrowers currently tracked. This number is expected to vary widely as cohort progresses through first year of tracking.

Default Prevention Efforts - ECMC

Debt Summary Letters Grace Counseling

Repayment Options Counseling

& Paperwork Assistance

Forbearance Counseling &

Paperwork Assistance

Cohort Monitoring & Predictive

Analysis

Student Engagement

Tracking

Default Prevention Efforts – MCC While Enrolled• Loan Request Form• Reference Checks• Financial Awareness Counseling• Participation Verification• Debt Summary Letters• Availability of iGrad• Boomer’s Buggy & Class Visits• Emergency Grants• Financial Alerts• Summer Bridge Offerings

After Enrollment• Grace Notices• Postcard Mailers• Email Outreach• Phone Outreach• Tube Mailers• Offer In-Person Exit

Counseling

Default Prevention Efforts – MCC

Changes that Positively Impact Default Rates

• SAP Academic Plans• CBE Educational Activity Reports• WR1 Withdrawals

Provides advising touchpoints, identifiers to provide assistance, or signals when a student may not complete their program.

Preparing for the Future

We must continue to shift focus to successful repayment rather than avoiding default.

Preparing for the FutureProposed Measure Current Monitoring

5 Year Cohort Default Rate

• LoanTracker provides 5 year measure• Considered an estimate• Does not track consolidated loans

Repayment Rate

• College Scorecard Data – measures balance reduction• LoanTracker – measures current status of payments• Varying definitions of successful repayment exist

Adjusted Cohort Default Rate

• Monitoring not yet available• Proposed in College Affordability Act (CAA)• Counts long-term forbearance as a default (36+ months)• Considers the percentage of students borrowing

Preparing for the Future

Successful Repayment

Decreased Borrowing

Additional Debt

Counseling

Career Counseling

Budgeting Skills

Increase Exit Counseling Completion

Improve Outreach Messaging

Questions?

JLBC - Monthly Fiscal Highlights October 2019

Summary

Table of Contents

1716 W. Adams Phoenix, AZ 85007

Phone: (602) 926-5491

www.azleg.gov/jlbc.htm

This report has been prepared for the Arizona Legislature by the Joint Legislative Budget Committee Staff on October 21, 2019.

"Year-to-date

FY 2020

General Fund

revenues are

8.7% above

the prior year

and are $178.6

million above

the enacted

budget

forecast." Summary • Operating Balance/BSF Information ............... 1 • Year-to-Date Results .......................................... 1 • October FAC Summary ..................................... 2 September Revenues ............................................ 2 Monthly Indicators ................................................. 5 JLBC Summary ........................................................ 8 JCCR Summary ....................................................... 9 JLBC/JCCR Meeting Follow-Up .......................... 10 Summary of Recent Agency Reports • ADOA – Investment Yield Restriction ............ 11 • ADOA – Telecommunications Office............ 11 • AHCCCS – Immigration Status Report .......... 11 • Aud. General – Foster Home Recruitment ... 11

• OEO – Annual Report ....................................... 12 • DES – DD Reimbursement Rates ..................... 12 • DES – Child Care Expenditures ........................ 12 • ADE – Report on District Overrides ................. 12 • JLBC Staff – County Flexibility Report ............. 13 • DOR/DOI – Tax Credit Report .......................... 13 • DOR – Revenue Enforcement Goals ............. 14 • ADOT/ADOA – Vehicle Fleet Report.............. 15 • Universities – Report on University Centers. ... 15 • ABOR – Graduation Rates. .............................. 16 • DWR – Interstate Water Banking. .................... 16 September Spending ........................................... 17 Arizona Economic Trends .................. Appendix A

September General Fund revenues totaled $1.16 billion and grew by 11.8% during the month. This level of collections was $119.9 million above the enacted budget forecast.

The strong growth during September occurred in all of the state's large revenue categories.

Sales Tax collections grew by 6.9% and were $15.0 million above forecast, helped by continued healthy performance in the Retail, Contracting and Restaurant/Bar subcategories. Sales Tax has grown by above 6% each month so far during FY 2020.

With the deposit of quarterly estimated tax payments during the month, September tends to be a larger month for Individual Income Tax (IIT) collections. During September, IIT payments grew by 18.2%, which lead to the overall IIT category growing by 9.9% for the month and ending up $48.2 million above forecast.

September is also a significant month for Corporate Income Tax (CIT) collections. CIT revenues were 15.8% above the prior year, posting a $35.2 million gain above the enacted forecast.

Insurance Premium Tax revenues increased by 79.7% during September – however, as noted in the prior Monthly Fiscal Highlights,

Insurance Premium Tax (IPT) declined significantly during August due to a timing issue with IPT quarterly tax payments (which are typically processed during August). Because of a timing shift, these IPT payments were collected in September, effectively recouping the loss seen last month for the category.

Operating Balance/BSF Information The operating fund balance consists of the General Fund and certain dedicated funds. The operating balance as of mid-October 2019 is $1.96 billion. In addition, the state Budget Stabilization Fund (BSF) currently has a balance of $1.01 billion.

Year-to-Date Results Given the significant revenue growth during September, excluding Urban Revenue Sharing and fund transfers, year-to-date FY 2020 General Fund revenues are 8.7% above the prior year and are $178.6 million above the enacted budget forecast.

As noted during the October FAC meeting, the current year-to-date revenue growth of 8.7% significantly exceeds both the enacted budget forecast (2.1%) and the revised FY 2020 October FAC revenue projection (2.4%).

There is, however, significant uncertainty to how state revenues will perform in the second half of FY 2020. As part of addressing federal tax conformity, substantial tax reductions were

2 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

Summary (Continued)

September Revenues

Table 1 General Fund Revenues ($ in Millions)

FY 2020 Collections

Difference From Budget Forecast

Difference From FY 2019

September $ 1,161.8 $ 119.9 $ 122.6 Year-to-Date $ 2,885.0 $ 178.6 $ 129.0

Table 2 Sales Tax Growth Rates Compared to Prior Year

September YTD Retail 7.4% 7.0% Contracting 21.3% 17.8% Use (3.8)% 11.9% Restaurant & Bar 10.5% 7.8% Utilities (0.8)% (5.2)%

enacted for FY 2020. Given the broad-based tax changes (such as increasing the standard deduction) and that taxpayers are unlikely to actively adjust their withholding, these changes are likely to start impacting state revenues during tax filing season in the spring of 2020, as taxpayer receive larger refunds or owe smaller payments. We would note, however, that these types of major revisions to the state's income tax code add uncertainty to the forecast and the exact timing of these revenue impacts can be difficult to predict. October FAC Summary The Finance Advisory Committee (FAC) met on October 10, 2019 to update its 4-sector revenue forecast. The FAC is a 11-member panel of private and public sector economists and their views serve as one of the 4 equal inputs into JLBC’s Consensus revenue forecast. The remaining 3 inputs are the JLBC Staff forecast and 2 University of Arizona (UA) models. The JLBC Staff provided the FAC with a presentation on updated FY 2020 – FY 2023 budget projections. The updated projections were revised upwards from the FY 2020 enacted budget projections mostly due to the better-than-expected performance of state

revenues during FY 2019. During FY 2019, revenues grew by 10.2% compared to a budgeted level of 7.8%. Given this higher revenue base, JLBC Staff is now projecting the state will have a cash balance of $694 million in FY 2020. In terms of calculating the amount of resources available, JLBC Staff presented "planning targets" based on certain parameters. Assuming the state retains $50 million as an uncommitted cash balance, up to $170 million is available for ongoing initiatives such as revenue reductions or spending increases. Beyond that amount, $475 million would be available for one-time purposes, such as capital projects. These long-term financial projections are subject to several potential risks. One potential risk is litigation, as the state is involved in several lawsuits, including the issues of K-12 capital funding and prison health care. In addition, while the October FAC revenue forecast builds in some caution, it does not specifically include a recession scenario. For more information, please see the JLBC Staff Budget Update for a narrative description of the current budget projections and the October FAC meeting packet.

Sales Tax collections of $445.2 million were 6.9% above September of last year and $15.0 million above the forecast for the month. Year to date, collections are up by 6.9% and exceed the forecast by $34.0 million. Sales tax collections by category for September are shown in Table 2. The 5 major categories of the state’s sales tax shown in the table account for approximately 90% of total collections. As shown in Table 2 below, retail, contracting and restaurant/bar sales had strong year-over-year growth in September whereas use tax and utilities sales declined.

3 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

September Revenues (Continued)

Individual Income Tax net revenues of $525.6 million in September were $48.2 million above the enacted revenue forecast. As indicated in Table 3, September withholding revenues of $365.6 million were 5.8% above last year and $5.9 million below the forecast. September estimated and final payments of $179.5 million were 18.2% above the prior year and $43.5 million above forecast. The amount of refunds in September totaled $(19.4) million, which is almost unchanged from the $(19.1) million amount last year. With a forecasted refund level of $(18.1) million, the higher level of actual refunds produced a forecast loss of $(1.3) million.

Table 3 Individual Income Tax Growth Rates

Compared to Prior Year September YTD Withholding 5.8% 7.1% Estimated/Final Payments 18.2% 21.5% Refunds 1.9% 1.6%

Corporate Income Tax net revenue was $121.4 million in September and 15.8% above the same month in the prior year. This was $35.2 million above the forecast for the month. Year to date, net collections are up by 9.5% relative to the same period in the prior year, and $43.8 million above forecast. Historically, September is the first month in the fiscal year with significant amounts of estimated payments by corporate filers. In terms of corporate net revenue, about 20% of the fiscal-year total is typically collected in September. While the reason for September’s larger-than-expected increase in net collections is currently unclear, we believe that the so-called “tax-shifting” effect following the passage of the federal Tax Cuts and Jobs Act (TCJA) at the end of 2017 may explain at least part of this revenue surge. TCJA lowered the federal corporate tax rate from 35% in Tax Year (TY) 2017 to 21% in TY 2018. This change incentivized corporations to shift their federal taxable income from TY 2017 to TY 2018 so as to take advantage of the lower corporate tax rate. The starting point for state corporate income tax is federal taxable income. Thus, the shifting of federal

taxable income from TY 2017 to TY 2018 benefitted Arizona’s corporate income tax in FY 2019 since the state corporate rate did not change. Unlike individual income tax filers, corporate filers often use a fiscal year that is different from the calendar year. In addition, large corporations typically request a 6-month filing extension. This means that the changes under TCJA that took effect in TY 2018 (such as the corporate rate reduction) will continue to affect state corporate income tax collections not only in FY 2019 but also in FY 2020 and FY 2021 depending on when a corporation’s fiscal year begins. Insurance Premium Tax net collections were $110.4 million in September, $48.9 million more or 79.7% higher than the same month last year. It was also $13.9 million above forecast. Through September, insurance premium tax revenue was up by 5.8% and remained $5.9 million above forecast. September's increase in revenues was caused by recording a significant amount of delayed August payments. Due to a delay in receiving September tobacco and liquor tax revenue data, September collections are reported at forecast. The Lottery Commission reports that September ticket sales were $74.5 million, which is $0.1 million, or 0.1% above sales in September 2018. Year-to-date, ticket sales are $233.1 million, or (0.9)% below sales in the prior year. Highway User Revenue Fund (HURF) collections of $128.2 million in September were up by 0.4% compared to September of last year and were $(0.3) million below forecast. Year-to-date, collections have increased by 1.4% above the prior year and are $(2.7) million below forecast. Due to delays in reporting final August revenues for various revenues sources, DOR has made technical adjustments to prior month collection figures. For September, DOR has increased the amount of prior General Fund revenue collections by $41,600, and the adjustment has been included in the reported year-to-date results.

4 Table 4

General Fund Revenue: Change from Previous Year and Budget Forecast

September 2019

Actual ActualSeptember 2019 Amount Amount September 2019 Amount Amount

Taxes Sales and Use $445,214,178 $28,746,805 6.9 % $14,953,773 3.5 % $1,318,009,276 $84,690,049 6.9 % $34,016,772 2.6 % Income - Individual 525,626,609 47,458,010 9.9 48,206,507 10.1 1,360,793,107 120,273,881 9.7 80,147,090 6.3 - Corporate 121,360,798 16,590,560 15.8 35,220,449 40.9 161,698,104 14,050,801 9.5 43,750,341 37.1

Property (337,898) (534,559) -- (459,403) -- 1,258,984 (190,832) (13.2) 594,269 89.4 Luxury - Tobacco 1,428,920 (455,800) (24.2) 0 -- 5,313,364 (326,640) (5.8) 484,392 10.0 - Liquor 2,493,157 (293,457) (10.5) 0 -- 7,885,649 (270,685) (3.3) (184,852) (2.3) Insurance Premium 110,404,809 48,949,420 79.7 13,853,610 14.3 156,478,781 8,553,216 5.8 5,873,489 3.9 Other Taxes 2,913,796 2,198,451 307.3 2,104,095 259.9 6,623,915 4,305,602 185.7 4,085,980 161.0

Sub-Total Taxes $1,209,104,370 $142,659,430 13.4 % $113,879,032 10.4 % $3,018,061,179 $231,085,391 8.3 % $168,767,480 5.9 %

Other Revenue Lottery 0 (14,835,733) (100.0) (2,372,921) (100.0) 20,000,000 5,164,267 34.8 (4,248,421) (17.5) License, Fees and Permits 2,710,564 440,665 19.4 374,975 16.1 9,636,618 984,419 11.4 2,046,726 27.0 Interest 4,665 (1,501) (24.3) (154,429) (97.1) (5,005) (1,563,114) (100.3) (258,812) (102.0) Sales and Services 3,328,614 1,480,558 80.1 686,091 26.0 5,904,999 1,519,063 34.6 917,995 18.4 Other Miscellaneous 1,598,936 (176,363) (9.9) 1,010,764 171.8 2,781,899 1,372,987 97.5 1,684,328 153.5 Disproport ionate Share 0 0 -- 0 -- 0 0 -- 0 -- Transfers and Reimbursements 6,495,873 5,959,211 -- 6,495,873 -- 13,031,655 7,970,311 157.5 9,701,578 291.3

Sub-Total Other Revenue $14,138,653 ($7,133,162) (33.5) % $6,040,353 74.6 % $51,350,167 $15,447,934 43.0 % $9,843,393 23.7 %

TOTAL BASE REVENUE $1,223,243,023 $135,526,269 12.5 % $119,919,385 10.9 % $3,069,411,346 $246,533,324 8.7 % $178,610,873 6.2 %

Other Adjustments Urban Revenue Sharing (61,463,432) (5,229,729) 9.3 (0) 0.0 (184,390,296) (15,689,186) 9.3 (0) 0.0 One-Time Transfers 0 0 -- 0 -- 0 (94,158,056) -- 0 -- Public Safety Transfers 0 (7,702,636) -- 0 -- 0 (7,702,636) -- 0 --

Sub-Total Other Adjustments (61,463,432) (12,932,365) 26.6 % (0) 0.0 % (184,390,296) (117,549,879) 175.9 % (0) 0.0 %

TOTAL GENERAL FUND REVENUE $1,161,779,592 $122,593,904 11.8 % $119,919,385 11.5 % $2,885,021,050 $128,983,445 4.7 % $178,610,873 6.6 %

Non-General Funds

Highway User Revenue Fund 128,191,596 517,499 0.4 % (299,846) (0.2) % 375,126,326 5,315,454 1.4 % (2,711,923) (0.7) %

Percent Percent Percent Percent

Current Month FY 2020 YTD (Three Months)

Change From Change fromSeptember 2018 Enacted Forecast September 2018 Enacted Forecast

5 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

Monthly Indicators

NATIONAL According to the U.S. Department of Commerce Bureau of Economic Analysis' third or "final" estimate, the U.S. Real Gross Domestic Product (GDP) increased at a seasonally adjusted annual rate of 2.0% in the second quarter of 2019. This final estimate remained the same from the preceding preliminary estimate due to decreases in residential investment, inventory investment, and net exports. The Conference Board’s U.S. Consumer Confidence Index, which is based on consumers' perceptions of current conditions, as well as their expectations 6 months into the future, decreased by (6.8)%, or 9.1 points, from August's revised 134.2 to 125.1 in September. Consumer views on trade and tariff tensions caused the decline in September. The labor index, which is calculated as the percentage of respondents who think that jobs are plentiful minus the percentage who think that jobs are difficult to find, decreased by 5.1 points, or (13.3)%, in September to a net value of 33.2. According to the U.S. Department of Commerce Bureau of Economic Analysis, the U.S. Personal Consumption Expenditure (PCE) Price Index remained unchanged from July to August. Compared to August 2018, the overall price index is up by 1.4%. The "core" PCE price index excludes food and energy prices and is the Federal Reserve's (Fed) preferred inflation measure. This core index increased year over year by 1.8% in August, which remains below the Fed's inflation target of 2.0%. Consumer prices, which are measured by the U.S. Bureau of Labor Statistics Consumer Price Index (CPI), did not change in September, reflecting a 1.7% increase above September 2018 prices. The food index rose by 0.1% and the shelter index by 0.3%, but these increases were offset by a (1.4)% decrease in the energy index and a (1.6)% decrease in the index for used cars and trucks. In addition, the gasoline index fell (2.4)%. Core inflation (all items less food and energy) rose 0.1% for the month, and compared to September 2018, the core CPI is up by 2.4%. The index for medical care services rose 0.4%, while the index for apparel fell 0.4% and the index for new vehicles fell 0.1%. The Conference Board's U.S. Leading Economic Index was unchanged in August at 112.2 and is 1.2% above its August 2018 reading. The lack of change was the result of strong numbers from housing permits and the Leading Credit Index (Treasury bill and investor sentiment outlook). This was offset by a weak manufacturing index and interest rate spread.

ARIZONA Single-family housing construction is increasing. However, the pace of growth has started to decline. In August, Arizona’s 12-month total of single-family building permits was 31,581, or 3.9% more than a year ago. The comparable single-family permit growth rate for the entire U.S. was a decrease of (3.6)%. The 12-month total of multi-family building permits has been up and down. In August, Arizona’s total of 10,939 multi-family building permits was (2.7)% less than in 2018. Nationwide multi-family permits were 4.7% more than in 2018. Tourism Revenue per available room was $63.50 in August, 8.1% above the same month in the prior year. Ridership through Phoenix Sky Harbor Airport during August increased 2.2% above the prior year. Employment According to the latest employment report released by the Office of Economic Opportunity (OEO), the state added 21,900 nonfarm jobs in September compared to the prior month. This was less than the 10-year average job gain of 28,500 for the month of September. Compared to the same month in the prior year, Arizona added 65,000 net new jobs in September, which is a year-over-year increase of 2.3%. This is the slowest employment growth rate since July 2017. The largest year-over-year job gains in September came from the following industries: Construction (+16,800), Education and Health Services (+16,300), and Manufacturing (+8,900). The only major sector that had a net loss of jobs in September was the government sector, which shed (1,600) jobs. Year-over-year, government employment growth is down by (0.4)%. In September, the state’s regular unemployment rate decreased from 5.0% to 4.9%. In September 2018, the jobless rate was 4.8%. The state jobless rate has remained essentially unchanged over the last 6 months. The U.S. unemployment rate declined from 3.7% in August to 3.5% in September, the lowest jobless rate since December 1969. According to OEO, the state had a total of 22,908 claimants receiving unemployment insurance benefits in September, a decrease of (10.2)% from August. This figure is (6.1)% below the September 2018 level.

6 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

Monthly Indicators (Continued)

OEO reported that 15,415 initial claims for unemployment insurance were filed in September, an increase of 16.5% compared to the same month last year. This is the first year-over-year increase in initial claims in 17 months. Average Hourly Earnings The Average Hourly Earnings received by private sector workers in August was $26.54, which was 0.8% above the average in the prior month. Year-over-year growth in earnings increased from 2.2% in July to 3.3% in August. Arizona Personal Income According to the U.S. Department of Commerce Bureau of Economic Analysis, Arizona personal income increased at a seasonally adjusted annual rate of 6.3% from the first quarter to the second quarter of 2019. Arizona's growth rate was the sixth highest in the nation and was 0.9% above the U.S. personal income growth rate of 5.4%. State Agency Data At the beginning of October 2019, the total AHCCCS caseload was 1.84 million members. Total monthly enrollment increased by 0.1% for October and was 1.5% higher than a year ago. Parent and child enrollment in the Traditional population was flat for October and was (0.1)% lower than a year ago. Enrollment in KidsCare is 36,050 for October, which represents 1.7% growth compared to September and is 6.0% above last year. For October 2019, growth in the childless adult population was 0.7%. At 331,438, this population is 6.6% higher than a year ago. In the adult Medicaid expansion program up to 133% of the Federal Poverty Level, enrollment increased 1.0% for October and totals 77,568 individuals. Enrollment is 0.9% higher than a year ago. Based on information the Department of Child Safety provided for August 2019, reports of child maltreatment totaled 46,244 over the last 12 months, a decrease of (2.1)% over the prior year. There were 14,156 children in out-of-home care as of July 2019, or (1.3)% less than in July 2018. Compared to the prior month, the number of out-of-home children decreased (1.3)% The Arizona Department of Correction's inmate population was 42,594 as of September 30, 2019. This was an increase of 0.3% since August 31, 2019 and a 1.2% increase since September 2018.

According to the most recent information from the Administrative Office of the Courts, the Maricopa County probation caseload was 27,825 as of June 2019. This was a decrease of (296) below the prior month, and a decrease of (610) since last June. In addition, the state's non-Maricopa County probation caseload was 19,283. This was an increase of 11 above the prior month, and an increase of 27 since last June. These figures represent standard and intensive probation caseloads, including both adult and juvenile probation. There were 13,448 TANF Cash Assistance recipients in the state in August, representing a 3.0% monthly caseload increase from July. The year-over-year number of TANF Cash Assistance recipients has declined by (6.9)%. The statutory lifetime limit on cash assistance is 24 months. The Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, provides assistance to low-income households to purchase food. In August, 822,868 people received food stamp assistance in the state, representing a 0.4% increase above July caseloads. Compared to August 2018, the level of food stamp participation has declined by (3.4)%.

7 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

Table 5 MONTHLY INDICATORS

Indicator Time Period Current Value Change From

Prior Period Change From

Prior Year Arizona

Employment - Regular Unemployment Rate September 4.9% (0.1)% 0.1% - Total Unemployment Rate (discouraged/underemployed)

2nd Q 2019 9.2% 0.2)% 0.1%

- Initial Unemployment Insurance Claims September 15,415 (1.7)% 16.5% - Unemployment Insurance Recipients September 22,908 (10.2)% (6.1)% - Non-Farm Employment - Total Manufacturing Construction

September September September

2,942,000 180,100 177,800

0.7% (0.2)% 1.0%

2.3% 5.2%

10.4% - Average Hourly Earnings, Private Sector August $26.54 0.8% 3.3% Building

- Residential Building Permits (12-month avg) Single-family Multi-family

August August

31,581 10,939

(0.3)% 3.5%

3.9%

(2.7)% - Maricopa County/Other, Home

Sales (ARMLS) Single-Family (Pending Sales)

August

5,475

(14.1)%

6.8%

- Maricopa County/Other, Median Home Price (ARMLS) Single-Family (Pending Sales)

August

$294,000

1.4%

5.0%

- Phoenix S&P/C Home Price Index (2000 = 100) July 194.06 0.7% 5.8% - Maricopa Pending Foreclosures August 2,325 (0.9)% (8.9)% - Greater Phoenix Total Housing Inventory, (ARMLS) August 17,492 (2.9)% (11.8)%

Tourism - Phoenix Sky Harbor Air Passengers August 3,651,884 (4.7)% 2.2% - State Park Visitors June 312,634 9.2% 12.3% - Revenue Per Available Hotel Room August $63.50 (0.1)% 8.1% General Measures - Arizona Leading Index – 6-month projected growth August 2.5% (0.9)% 0.0% - Arizona Personal Income, SAAR 2nd Q 2019 $335.1 billion 6.3% 6.3% - Arizona Population July 2018 7,171,646 N/A 1.7% - State Debt Rating Standards & Poor’s/Moody’s Outlook

May May

AA / Aa2

Stable

N/A N/A

N/A N/A

Agency Measures - AHCCCS Recipients October 1st 1,844,204 0.1% 1.5% Acute Care Traditional 1,033,223 0.0% (0.1)% Prop 204 Childless Adults 331,438 0.7% 6.6% Other Prop 204 187,215 (0.2)% 1.5% Adult Expansion 77,568 0.1% 0.9% KidsCare 36,050 1.7% 6.0% Long-Term Care – Elderly & DD 66,196 0.3% 4.8% Emergency Services 112,514 (0.4)% (0.4)% - Department of Child Safety (DCS) Reports of Child Maltreatment (12-month total)

DCS Out-of-Home Children

August

July

46,244 14,156

0.1%

(0.3)%

(2.1)% (1.3)%

Filled Caseworkers (1406 Budgeted) July 1,293 21 (47) - ADC Inmate Growth September 42,594 0.3% 1.2% - Department of Economic Security - TANF Cash Assistance Recipients August 13,448 2.9% (6.94)% - SNAP (Food Stamps) Recipients August 822,868 0.4% (3.4)% - Judiciary Probation Caseload Non-Maricopa

Maricopa County

June June

19,283 27,825

11 (296)

27

(610) United States - Gross Domestic Product (Chained 2012 dollars, SAAR)

2nd Q, 2019 (3rd Estimate)

$19.0 trillion 2.0% 2.3%

- Consumer Confidence Index (1985 = 100) September 125.1 (6.8)% (7.5)% - Leading Indicators Index (2016 = 100) August 112.1 0.0% 1.1% - Consumer Price Index, SA (1982-84 = 100) September 256.4 0.0% 2.4% - Personal Consumption Expenditure Price Index (2012 = 100)

August 110.0 0.0% 1.4%

8 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

JLBC Summary

At its September 25, 2019 meeting, the Joint Legislative Budget Committee considered the following issues: Executive Session Arizona Department of Administration – Risk Management Services – Consideration of Proposed Settlements – The Committee approved several settlements under Rule 14, which requires Committee approval of Risk Management settlements above $250,000 pursuant to A.R.S. § 41-621(N). Regular Agenda AHCCCS/Department of Economic Security – Review of Capitation Rate Changes for Plan Year 2020 – The Committee gave an unfavorable review of AHCCCS' plans to adjust capitation rates for numerous programs. In aggregate, the AHCCCS rate adjustments are 5.0%. These adjustments would have a General Fund cost of $54.0 million. The enacted budget included $30.0 million for AHCCCS formula expenses or ($24.0) million less than the cost of AHCCCS' proposed rates. Arizona Department of Administration/Automation Projects Fund – Review of FY 2020 Projects – The Committee gave a favorable review of $12.3 million in expenditures for 5 projects. The favorable review included reporting requirements. The 5 projects include: • Business One-Stop Shop portal, $1.0 million • Department of Agriculture IT upgrade feasibility

study, $200,000 • DCS CHILDS project implementation, $8.5 million • Arizona Medical Board cloud migration, $300,000 • DPS Criminal Justice Information System upgrade,

$2.3 million Arizona Department of Corrections – Review of FY 2020 First Quarter Correctional Officer Staffing Report – The Committee gave a favorable review of ADC's first quarter report. Of 1,290 vacant correctional officer positions, ADC proposes filling 812 of them by June 2019. Through August 26, ADC has a net decrease of (74) officers. The favorable review included additional reporting requirements. Arizona Department of Education – Review of K-12 Broadband Connectivity Projects – The Committee gave a favorable review to ADE's June 2019 report on K-12 broadband connectivity projects. ADE certified $11 million of state matching contributions to draw down approximately $130 million in federal monies to fund projects in FY 2018 and FY 2019. The favorable review included reporting requirements.

Universities – Review of FY 2020 Tuition Revenues – The Committee gave a favorable review of the Arizona Board of Regent's FY 2020 expenditure plan for all projected tuition and fee revenues by expenditure category. The gross FY 2020 tuition and fee collections are projected to be $3.29 billion, or $217.6 million higher than FY 2019. The universities estimate $(851.1) million in tuition waivers and awards in FY 2020, resulting in $2.44 billion of net tuition. Consent Agenda Department of Child Safety – Review of FY 2019 Fourth Quarter Benchmarks – The Committee gave a favorable review of the department's FY 2019 fourth quarter benchmark report for assessing progress made in increasing the department's number of FTE Positions, meeting caseload standards of caseworkers, reducing the number of backlog cases and open reports, and reducing the number of children in out-of-home care. Arizona Department of Corrections – Review of FY 2019 Bed Capacity Report – The Committee gave a favorable review of ADC's bed capacity report. At the end of FY 2019, ADC has a permanent bed shortfall of (3,440), but including temporary beds has an overall surplus of 2,779. ADC does not plan to add any permanent or temporary beds in FY 2020. Instead, ADC expects to reallocate existing beds between custody levels to address population needs. Arizona State Parks Board – Review of FY 2020 Arizona Trail Expenditure Plan – The Committee gave a favorable review of the department's FY 2020 expenditure plan including 8 maintenance projects covering a total of 80 miles of the Arizona Trail. ASPB is using the $250,000 appropriation from FY 2020 and $225,000 in local and community funding for total funding of $475,000. Department of Public Safety – Review of Expenditure Plan for the Gang and Immigration Intelligence Team Enforcement Mission (GIITEM) Border Security and Law Enforcement Subaccount – The Committee gave a favorable review for the expenditure plan of $1.1 million of the $2.4 million appropriation for Border Security and Law Enforcement Grants as proposed by the department. Six County Sheriffs will receive funding from the program, which is down from the 7 that were funded last year. Department of Veteran's Services – Review of Veterans' Suicide Prevention Program – The Committee gave a favorable review of the expenditure report relating to the Veteran's Suicide Prevention line item as well as the status of non-state matching funds. The favorable review included reporting requirements.

9 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

JCCR Summary

At its September 25, 2019 meeting, the Joint Committee on Capital Review considered the following issues: Regular Agenda Arizona Department of Corrections – Review of FY 2020 Building Renewal Allocation Plan – The Committee gave a favorable review to ADC's $6.9 million plan for 13 building renewal projects at 7 state prison facilities. These monies were appropriated from the Department of Corrections Building Renewal Fund. Reviewed projects include: locking systems, air conditioning and duct work, electrical infrastructure, roof replacements, well motor/pump projects, and gas line replacements. The favorable review included provisions with reporting requirements. Arizona State University – Review of Downtown Phoenix Residence Hall and Entrepreneurial Center – The Committee gave a favorable review of ASU's plan for a 0.82-acre ground lease and $116.1 million residence hall and entrepreneurial center at the Downtown Phoenix Campus. Of the $116.1 million, the vendor would fund $66.5 million for 532 beds (and be repaid with dorm fees). ASU would issue $49.6 million in system revenue bonds for the entrepreneurial space. The review included the standard university financing provisions. Arizona State University – Review of Downtown Phoenix Thunderbird School of Global Management Building – The Committee gave a favorable review of $37.0 million in system revenue bond issuances to fund construction of the Thunderbird School of Global Management's building on the Downtown Phoenix Campus. Total project costs are $67.0 million, of which $37.0 million would be funded by system revenue bonds and $30.0 million from campus sale proceeds. The favorable review included the standard university financing provisions. Arizona State University – Consider Approval of Interdisciplinary Science and Technology Building (ISTB) 7 Financing Project – The Committee approved a $17.0 million increase in the bond issuance for construction of the Interdisciplinary Science and Technology Building (ISTB) 7. At its September 2018 meeting, the Committee approved Arizona State University's request of a $175.0 million bond issuance for construction of ISTB 7, making the total project cost $192.0 million. ISTB will include lab space for biological sciences, computing and engineering. Debt service will be paid

with 50% tuition and 50% with Capital Infrastructure Fund appropriations. The approval included the standard university financing provisions. Northern Arizona University – Review of Student Athlete High Performance Center Indirect Financing Project – The Committee gave a favorable review of a $46.0 million indirect financing project for construction of a 70,000 square foot Student Athlete High Performance Center (SAHPC). The SAHPC will be focused on providing wellness and development for Northern Arizona University (NAU) student athletes and educational opportunities for NAU students. The debt service will be paid through student athletic fee revenue, gifts, and general university funds. The favorable review included the standard university financing provisions. Consent Agenda Department of Emergency and Military Affairs – Review of West Valley Readiness Center – The Committee gave a favorable review of $15.5 million for construction of a West Valley Readiness Center. These monies include $3.9 million from the General Fund and $11.6 million from Federal Funds. The favorable review included provisions with reporting requirements. Arizona Game and Fish Department – Review of FY 2020 Building Renewal Allocation Plan and FY 2020 Capital Projects – The Committee gave a favorable review of $1.4 million for 25 items in the department's FY 2020 building renewal allocation plan, $300,000 for fish hatchery property maintenance, $150,000 for dam maintenance, $400,000 for hatchery maintenance, and $525,000 for 2 non-appropriated capital improvement projects. The favorable review included provisions with reporting requirements and a provision restating a statutory requirement for spending from the Headquarters Major Maintenance Fund. Northern Arizona University – Review of FY 2020 Capital Improvement Plan for One-Time Appropriation – The Committee gave a favorable review of $5.0 million for capital improvement projects. These monies are part of a $6.65 million one-time appropriation to NAU in FY 2020. The monies will be used for 2 projects: $1.0 million for underground utility infrastructure improvements and $4.0 million for academic building improvements. The favorable review included a standard university financing provision.

10 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

JCCR Summary (Continued)

JLBC/JCCR Meeting Follow-Up

Pima Community College District – Review of Pima Aviation Technology Center Expansion – The Committee gave a favorable review of a $19.3 million project to expand the Pima Aviation Technology Center (ATC). These monies include $15.0 million from the General Fund and $4.3 million in Pima Community College District revenues. The favorable review included provisions with reporting requirements. Department of Public Safety – Review of Radio Communications Tower Project – The Committee gave a favorable review of $309,000 for the construction of a radio communications tower along the South Mountain Loop 202 extension. These monies were appropriated from the Board of Fingerprinting Fund in FY 2020.

Arizona Department of Transportation – Review of FY 2020 Building Renewal Allocation Plan – The Committee gave a favorable review of $13.3 million for the Arizona Department of Transportation's (ADOT) FY 2020 building renewal allocation plan. These monies included $13.0 million from the State Highway Fund and $281,700 from the State Aviation Fund. Reviewed projects include: remodeling, safety improvements, compliance and roofing replacements. The favorable review included provisions with reporting requirements.

ADC also reports that all 10 state prison facilities have direct evaporative cooling. ADC estimates the cost to replace the systems with indirect evaporative cooling would be $114.9 million. (Geoffrey Paulsen) Department of Education – Achievement Testing – Pursuant to a provision from the September 2018 JLBC meeting , the Arizona Department of Education (ADE) has reported on the status of all contracts for the statewide assessment and menu of assessments, including exam vendors, pricing agreements, and an estimate of the number of students taking each exam in FY 2020. Table 6 below provides this information for each test, which ADE estimates will have costs totaling to $12.6 million in FY 2020. The $12.6 million is in addition to the cost of the statewide assessment (AzMERIT), which ADE previously reported to the Committee at its June 2019 meeting would cost $12.9 million in FY 2020, bringing total achievement testing costs to $25.5 million for FY 2020. (Patrick Moran)

Arizona Department of Corrections – Report on ADC Fire Watch and Prison HVAC Needs – Pursuant to Committee provisions from the June 2019 JCCR meeting, the Department of Corrections (ADC) submitted a report detailing the costs of using a 24-hour fire watch due to inoperable fire systems. The report also included a list of the state prisons that currently use direct evaporative cooling and the cost to upgrade to indirect evaporative cooling. According to ADC, the department does not incur any additional costs from the 24-hour fire watch since existing correctional officers on post have taken on the responsibility in addition to their normal duties. Additionally, ADC reports that all 10 prisons have some level of inoperable fire systems, ranging from 50% to 95% of the complex. ADC estimates the cost to replace the inoperable fire systems would be $95.7 million.

Table 6

Test Vendor Number of Test

Takers Cost per Student Total Cost Menu of Assessments ACT 65,000 $38.00 $2,470,000 AIMS Science Pearson 265,000 $7.93 $2,101,700 AZELLA Pearson 125,000 $48.63 $6,078,700 MSAA Cognia 6,800 $250.00 $1,700,000 AIMS A Science In-House 3,000 $66.67 $200,000

11 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

Summary of Recent Agency Reports

Arizona Department of Administration – Report on Investment Yield Restriction – Pursuant to A.R.S. 41-707, the Arizona Department of Administration (ADOA) is required to annually report by October 1 of each year any costs associated with the Investment Yield Restriction requirement for the tax-exempt deficit financing used to solve the FY 2010 budget shortfall. This restriction limits the investment return on the state’s operating balance to the interest rate paid on the outstanding tax-exempt financing. The state is required to restrict the yield on investments with a value equal to the current level of outstanding financing. ADOA reported that during FY 2019 there were no costs associated with meeting the Investment Yield Restriction requirements. ADOA stated the requirements have not reduced the yield of investments and there have been no penalties paid to the federal government. (Josh Hope) Arizona Department of Administration – Report on the Telecommunications Program Office - Pursuant to A.R.S. § 41-712, the Arizona Department of Administration (ADOA) submitted its annual report on the Telecommunication Program Office (TPO), including the current rate structure of telecommunications charges, and payments made by all AZNet 2 participants for FY 2019 and FY 2020. AZNet 2 participants pay a variety of fees for different purposes, including a third-party vendor to operate and maintain the system, a separate third-party vendor who aggregates an agency’s bills and manages expenses, as well as an amount paid to TPO for their administration of the system as a whole. In FY 2019, total charges paid by all entities were $37.9 million. In FY 2020, the estimated total charges paid by all entities is $43.6 million. Pursuant to A.R.S. § 41-713, ADOA additionally submitted their annual report on the Telecommunication Fund, which includes the sources and uses of received monies, for FY 2019, as well as estimates for FY 2020. The Telecommunication Fund primarily consists of monies paid by agencies, as well as other AZNet 2 participants, to TPO to administer the system as a whole. In FY 2019, the Telecommunication Fund received $1.8 million from AZNet 2 participants to administer the system. In FY 2019, the Telecommunication Fund is also estimated to receive $1.8 million from AZNet 2 participants to administer the system, although ADOA is appropriated $1.6 million from the fund in FY 2020 to administer the program. (Rebecca Perrera)

AHCCCS – Report on Title XIX Reimbursement Rates to Behavioral Health Providers – Pursuant to A.R.S. § 36-3403, AHCCCS must contract with an independent consulting firm to report on the adequacy of Title XIX reimbursement rates to behavioral health providers on or before October 1 of each year. The report concludes that behavioral health provider reimbursement rates are "marginally adequate" in the State of Arizona, as most providers who responded to the survey indicated they are accepting new AHCCCS patients with a 2-week wait period. However, the report proposes an increase of 23.1% for Fee-For-Service (FFS) behavioral health outpatient service rates. This is based on the finding that MCOs often reimburse providers at a higher rate than the FFS fee schedule for behavioral health outpatient services. For reference, 6 of the 7 contracted MCOs pay at or above FFS fee schedule rates, with 3 paying above fee schedule rates for all categories. As a result, AHCCCS will not update the capitation rates paid to its contracted health plans to reflect adjustments to the FFS schedule. (Maggie Rocker) AHCCCS – Report on Systematic Alien Verification for Entitlements Program – Pursuant to A.R.S. § 36-2903.03, the Arizona Health Care Cost Containment System (AHCCCS) provided its latest report on the collection and verification of documentation associated with the Systematic Alien Verification for Entitlements (SAVE) program. AHCCCS, in conjunction with the Department of Economic Security (DES), performed 22,463 verifications of immigration status in FY 2019. During this period, AHCCCS and DES referred 20 individuals (18 citizens, 2 non-citizens) for prosecution for fraudulent schemes, prohibited acts, theft, or forgery. AHCCCS and DES identified one fraudulent immigration case using the SAVE program during FY 2019. (Maggie Rocker) Auditor General – Report on Foster Home Recruitment and Retention – Pursuant to the FY 2018 Human Services Budget Reconciliation Bill (Laws 2017, Chapter 311), the Auditor General reported on the Department of Child Safety’s (DCS) practices for recruiting, licensing, using and retaining foster parents. The Auditor General made the following findings: • DCS' licensing standards for foster homes are

generally consistent with model standards from the U.S. Department of Health and Human Services.

12 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

Summary of Recent Agency Reports (Continued)

• The department placed children in non-relative foster homes at lower rates than the national average, but exceeded the national average for placement rates with relatives. State law establishes a preference for placement with relatives.

• DCS uses data to estimate its foster home recruitment needs, which is consistent with best practices, but still needs additional homes for specific groups, such as teenagers and large sibling groups.

• Foster parents have consistently reported that customer service and lack of information about children in their care are areas where there is room for improvement.

• Inadequate handling of inquiries by the department and its contractors from prospective foster parents, particularly for Spanish-speaking parents, may hinder foster home recruitment efforts.

The report recommended that DCS adopt a customer service model, provide foster parents with complete information packets, and implement procedures to ensure contractors and the department adequately handle intake in English and Spanish, among other recommendations. DCS agreed to the auditors' recommendations. (Patrick Moran) Office of Economic Opportunity – Report on Revenues, Expenditures, and Program Activity – Pursuant to A.R.S. § 41-5356(B), the Arizona Industrial Development Authority (AZIDA), operating under the Arizona Finance Authority, submitted its annual report on its financial activity from the previous fiscal year. The agency reported $14.1 million in revenue, of which $6.2 million was from bond financing fees and $7.9 million was from single family mortgage lending fees. Expenses totaled $6.1 million, leaving net operating income at $8.0 million for FY 2019. It used revenues to provide $45.3 million in down payment assistance via 0% interest loans that are forgivable after 3 years. Additionally, AZIDA issued a total of $1.4 billion in bonds for a total of 26 projects for FY 2019. The bonds were utilized to finance 16 education projects, 6 multifamily housing projects, 2 health care projects, and 2 infrastructure projects. (Elliot Chau) Department of Economic Security – Report on Reimbursement Rates for Developmental Disabilities Programs – Pursuant to A.R.S. § 36-2959, the Department of Economic Security (DES) reported on its annual study performed by an independent consulting firm of the adequacy and appropriateness of Medicaid reimbursement rates for service providers

that contract with the Division of Developmental Disabilities (DDD). The main findings of the report were as follows: • The number of service providers increased from

548 in FY 2018 to 566 in FY 2019, a 3% increase. • The average number of services used per user

decreased by (2.0)% between FY 2018 and 2019. • Total payments to providers for all providers

increased by approximately 5.0% in FY 2019 compared to FY 2018.

• The consultant concludes that providers are facing challenges in retaining quality employees due to Proposition 206 and Proposition 414 minimum wage increases, citing wage compression and increased labor and benefits costs as sources of pressure for providers.

• The report also analyzed "unassigned service authorizations" or cases where a service has been recommended for a DD member but a provider has yet to be identified. The services with the most unassigned authorizations were therapies (960), respite (264), and habilitation (216). (Elizabeth Dagle)

Department of Economic Security – Report on Annual Child Care Expenditures – A.R.S. § 46-810 requires the Department of Economic Security (DES) to provide an annual child care report to the Committee. The FY 2019 report shows that the average number of children served increased to 30,487, or 2.0% above FY 2018; the number of families served increased by 3.1%. Across categories, the number of children served in the Low Income Working category (including those in special circumstances) increased by 18.1%, child welfare-related placements decreased by (11.4)%, the number of Temporary Assistance for Needy Families-related children decreased by (12.8)%, and the number of children receiving transitional child care decreased by (9.1)%. The wait list for child care subsidies decreased from 6,745 at the beginning of FY 2018 to 738 at the beginning of FY 2019. Currently, all eligible families are able to receive child care services immediately. The amount spent by DES on child care subsidies increased to $142.5 million, an increase of 6.2% from FY 2018. The average monthly subsidy paid per child increased 4.1% to $389.53. The total amount of co-payments collected increased by 23.5% from FY 2018 to $7.5 million. (Elizabeth Dagle) Department of Education – Override Report – Pursuant to A.R.S. § 15-249.04, the Arizona Department of Education (ADE) has reported FY 2020 data on school district budget overrides. Overrides permit school

13 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

Summary of Recent Agency Reports (Continued)

districts to generate and spend additional monies from local property taxes if approved by voters. The ADE report for FY 2020 indicates that 93 districts have Maintenance and Operation (M&O) overrides pursuant to A.R.S. § 15-481 and 27 have “District Additional Assistance” overrides pursuant to A.R.S. § 15-481 for the current fiscal year. The total amounts budgeted for overrides for FY 2020 include $554.9 million for M&O overrides (up $24.2 million from FY 2019) and $88.9 million for District Additional Assistance overrides (up $3 million from FY 2019). (Steve Schimpp) JLBC Staff – County Flexible Revenue Report – The FY 2020 Revenue Budget Reconciliation Bill (BRB) (Laws 2019, Chapter 272) permits counties with a population under 250,000 persons according to the 2010 Census to use any source of county revenue for purposes other than the purpose of the revenue source to meet a county fiscal obligation for FY 2020, but limits this authority to no more than $1,250,000 used for purposes other than the purpose of the revenue source. The FY 2020 Revenue BRB requires counties to report on their use of this provision. Of the 12 eligible counties, 4 reported using the flexibility: • Apache County: $1.25 million from the Community

College District, Library District, Flood District, and Public Health District to the General Fund and Jail District for law enforcement and Jail District operations. Apache County utilized $1.25 million last year.

• Coconino County: $1.25 million from the Jail District to the General Fund to pay down the Public Safety Personnel Retirement System (PSPRS) debt and pay for information technology needs for the Sheriff's Department. Coconino County did not utilize the flexibility last year.

• La Paz County: $1.25 million from the Vehicle License Tax to the General Fund to pay down PSPRS debt and pay for general operating expenses. La Paz County did not utilize the flexibility last year.

• Navajo County: $1.0 million from the Flood Control District and Library District to the General Fund for operating expenses. Navajo County utilized $1.25 million last year.

Last year, 2 eligible counties reported utilizing a total of $2.5 million of flexibility. The following 5 counties indicated that they are not utilizing this provision: Gila, Graham, Mohave, Santa Cruz, and Yavapai. The following 3 counties did not respond: Cochise, Greenlee, and Yuma. (Josh Hope)

Department of Revenue/Department of Insurance – Report on Tax Credits DOR – Income Tax Credits Pursuant to A.R.S. § 43-224, the Arizona Department of Revenue submitted its annual report on the amounts of individual income and corporate income tax credits used during the prior fiscal year. The agency reported that just over 1.7 million credit claims, totaling $520.8 million, were claimed against the individual income tax in FY 2019. This is a dollar impact growth of 10.0% over the prior year. Of the total, the "income taxes paid to other states" credit accounted for $186.5 million, school tuition organization credits accounted for $126.3 million, the charitable and foster care contributions credits accounted for $93.2 million, and the public school extracurricular activity fee credit accounted for $45.3 million. Use of other credits, including the Proposition 301 Sales Tax Credit, totaled $69.5 million. The number of claims and dollar impact of credits are listed in Table 7 below. Table 7

FY 2019 Individual Income Tax Credits ($ in millions)

Credits:

# of Claims

Annual Cost

Income Taxes Paid to Other States

80,087 $186.5

School Tuition Organizations 151,005 126.3 Contributions to Charitable and

Foster Care Organizations 205,379 93.2

Public School Contributions 165,817 45.3 Prop 301 Sales Tax Credit 548,638 26.3 Other Credits 570,897 43.2 Total Value of Credits 1,721,823 $520.8

The Department of Revenue reported that taxpayers used a total of $99.0 million in corporate income tax credits in FY 2019, a dollar impact decline of (22.9)% from the prior year. Of the total amount used, $46.4 million was for research and development credits and $20.6 million was for school tuition organization credits. Use of other credits, including credits for renewable energy production, totaled $21.6 million in FY 2019. The number of claims and dollar impacts of credits are listed in Table 8 below.

14 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

Summary of Recent Agency Reports (Continued)

Table 8

FY 2019 Corporate Income Tax Credits ($ in millions)

Credits:

# of Claims

Annual Cost

Research and Development1/ 428 $46.4 School Tuition Organizations 106 20.6 New Employment 34 10.4 Other Credits 38 21.6 Total Value of Credits 606 $99.0 _____________ 1/ Does not include additional credit for university

research due to confidentiality laws. This amount is, however, reflected in the total.

DOI – Insurance Premium Tax Credits Pursuant to A.R.S. § 20-224I, the Department of Insurance submitted its annual report on the amounts of insurance premium tax credits used in the previous fiscal year. The agency reports that a total of $40.9 million in insurance premium tax credits were used in FY 2019. Of this amount, $30.4 million consists of credits earned for donations made by insurance companies to private school tuition organizations that provide scholarships to children of low-income families or to children with disabilities. The dollar impacts of the specific credits are listed in Table 9 below.

Table 9 FY 2019 Insurance Premium Tax Credits

($ in millions) Credits:

Annual Cost

Private School Tuition Organization - Low Income Students 1/

$26.9

New Employment 4.8 Health Insurance Premium 2/ 3.8 Private School Tuition Organization

- Disabled/Displaced Students 3/ 3.5

Insurance Guaranty Fund 1.9 Total Value of Credits $40.9 ____________ 1/ Credit was capped at $89.2 million in FY 2019

between corporate and insurance premium taxpayers.

2/ Credit is capped at $5.0 million annually. 3/ Credit is capped at $5.0 million annually between

corporate income and insurance premium taxpayers.

(Elliot Chau/Jeremy Gunderson)

Department of Revenue – Report on Annual Enforcement Goals – Pursuant to 2 General Appropriation Act footnotes, the Department of Revenue (DOR) is required to report on their FY 2020 revenue enforcement goals, provide an annual progress report to the JLBC on the effectiveness of the department’s overall enforcement and collections program for FY 2019, and to report on the amount of Transaction Privilege Tax (TPT) delinquent accounts. In FY 2019, DOR’s total enforcement goal was $650.5 million but they actually collected $743.5 million. DOR’s FY 2020 goal for enforcement collections is $670.0 million. Compared to actual FY 2019 total enforcement revenue, DOR’s FY 2020 goals consist of: • A decrease in audit revenue of $(54.9) million, or

(37.6)%. • A decrease in accounts receivables revenue of

$(25.5) million, or (10.4)%. • An increase in collections revenue of $6.8 million,

or 1.9%. Audit enforcement revenue includes revenue due to DOR’s auditing of taxpayer returns, and finding and licensing unlicensed businesses. Accounts Receivable revenue includes taxpayer accounts paid before they would have been moved to collections, which allows DOR’s collectors to work on other accounts. After certain periods of time, unpaid taxpayer accounts are moved from Accounts Receivable to DOR’s Collections section. The above figures represent total enforcement revenues, which include state, county and municipal (city/town) taxes. The FY 2020 General Appropriation Act required DOR to separately delineate enforcement revenue for these types of taxes. DOR reported estimates for these categories, which allocates the $743.5 million in total enforcement revenue as follows: • $467.8 million in General Fund tax revenue • $145.1 million in municipal taxes • $36.3 million in county taxes • $55.6 million in state-shared revenue • $38.7 million in other state revenue At the end of FY 2019, there were 500,991 delinquent TPT accounts, totaling $534.5 million, of which 31.5% of these cases had been delinquent for more than 2 years. Additionally, DOR reports that $15.7 million in delinquent accounts were written off as uncollectible in FY 2019. (Jeremy Gunderson)

15 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

Summary of Recent Agency Reports (Continued)

Arizona Department of Transportation/Arizona Department of Administration – State Motor Vehicle Fleet Transition Report – Pursuant to Laws 2019, Chapter 267, the Arizona Department of Transportation (ADOT) and the Arizona Department of Administration (ADOA) reported on the suggested legislative changes required to fully implement the transition of the state fleet operations and infrastructure from ADOA to ADOT. The agencies recommend that 3 statutes be repealed and redrafted into a new motor vehicle fleet article. The agencies also recommend conforming changes to 3 additional statutes. ADOT and ADOA further recommend session law to authorize one-time transfers of personal and real property, provide for rules, and add a retroactive effective date of July 1, 2020. Laws 2019, Chapter 627 required a report on the transitioning of operations of the state fleet from ADOA to ADOT. The report did not provide details on progress the agencies have made transitioning the operations. (Jordan Johnston) Universities – Report on University Centers – In conjunction with an ongoing appropriation, the FY 2019 General Appropriations Act requires Arizona State University (ASU), Northern Arizona University (NAU), and the University of Arizona (UA) to operate Center's and report on each of the Center's 1) total funding; 2) faculty and courses; 3) student enrollment; and 4) community events, initiatives, and publications. Arizona State University – The FY 2020 General Appropriation Act appropriated $3.0 million to ASU to operate the School of Civic and Economic Thought and Leadership (SCETL). The SCETL reports total available funds of $7.6 million in FY 2020. This includes the $3.0 million FY 2020 General Fund appropriation, a $3.9 million carryover from FY19, $500,000 from the President's strategic initiative Fund, and $277,000 from donor support. ASU reports that operation costs for the school in FY 2020 are $900,000, including a $426,000 renovation of space dedicated to the school. During FY 2019, the SCETL had 11 faculty members who were collectively responsible for teaching 40 courses. The SCETL reports 351 students enrolled in courses taught by the school or who are enrolled in a major/minor offered by the school in FY 2019. In FY 2019, the SCETL supported internships in Africa, Belize, Israel, and India; along with Global Intensive Experience (GIE) courses in India and Israel for students. The school's proposal for a M.A. degree in Classical Education and Leadership is currently under review by faculty committees and the College and University Senates. Provisional courses are being offered during the spring 2019 and 2020 semesters for

the program. The SCETL also coordinates the Civic Discourse Project, presenting forums, lectures, and panel discussions. The 2019-2020 series is focused on Citizenship and Civic Leadership in America. Northern Arizona University – The FY 2020 General Appropriation Act appropriated $500,000 to NAU to operate the Alliance Bank Economic Policy Institute (EPI) in the College of Business. The Institute reports receiving a total of $784,100 in funding for the Economic Policy Institute since October 2018, including the FY 2020 $500,000 General Fund appropriation and $284,100 from Coconino County, U.S. Department of Commerce, U.S. Department of Interior, Arizona Office of Tourism, and the Arizona Snowbowl. The EPI is staffed by a Director, 2 affiliated faculty, 1 research assistant, and 3 undergraduate student workers. NAU reports no formal student enrollment, as the EPI does not offer any courses as a part of its structure. Current EPI research includes the contribution of the Flagstaff Snow Park to the local economy, Arizona Snowbowl's economic contribution to the Flagstaff and regional economy, and the Navajo Generating Station and Kayenta Mine Complex Project. In addition, EPI hosts conferences and workshops such as the Economic Outlook Conference, Tribal Entrepreneurship Trainings, Seventh Generation Money Management Workshop and Tribal Business Plan Competitions. University of Arizona – The FY 2020 General Appropriation Act appropriated $2.5 million to UA to operate the Center for the Philosophy of Freedom. The Center reports receiving a total of $2.7 million in funding for the Center in FY 2020, including the $2.5 million General Fund appropriation and $242,900 in donations from foundations and other private donors. During FY 2019, the Center had 7 faculty members who were collectively responsible for teaching 56 graduate and undergraduate courses. These courses had total enrollment of 2,124 undergraduate students and 52 graduate students. The center has a total of 12 graduate students currently enrolled. In addition to teaching, the Center reports that its students and faculty have contributed to the publication of 10 books and academic articles in 2018 and 10 books and academic articles in 2019. The Center reports community events such as large public lectures and local Freedom Talks. Other initiatives include collaboration with the UA Center for Ethics, Markets, and Law, the Early University Program at UA Global, and high school entrepreneurship classes; in addition to the Take Charge Initiative,

16 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

Summary of Recent Agency Reports (Continued)

expanding educational offerings in Europe, and the World Bank Development Workshop in 2020. (Alexis Pagel) Arizona Board of Regents – Report on University Retention and Graduation Rates – Pursuant to A.R.S. § 15-1626, the Arizona Board of Regents (ABOR) is required to submit an annual report on retention and graduation rates at each university campus. ABOR reports retention and graduation rates based on the federal government’s definitions, which track the outcomes of first-time, full-time, degree-seeking students after 1 year for retention rates and after 6 years for graduation rates. The standard federal definitions of retention and graduation rates exclude community college and transfer students. • Fall 2018 retention rates reflect the percentage of

first-time, full-time, degree-seeking students who initially enrolled in fall 2017 and who re-enrolled in the same university in fall 2018. o Arizona State University (ASU) 85.5%; Northern

Arizona University (NAU) 73.5%; and the University of Arizona (UA) 81.2%.

• Six-year graduation rates reflect the percentage of first-time, full-time, degree-seeking students who received their degree within 6 years of their initial fall enrollment at the same university. The report shows the percentage of students who enrolled in fall 2012 who graduated from the same university within 6 years (by spring 2019). o ASU 67.7%; NAU 52.4%; UA 64.5%.

ABOR also uses a 4-year community college transfer graduation rate to monitor student progress, citing student mobility as a significant factor in postsecondary education. • The 4-year community college transfer graduation

rates for students who transfer to an ABOR university from community college and graduate within 4 years. o ASU 70.9%; NAU 64.9%; UA 68.0%

(Alexis Pagel) Department of Water Resources – Report on Interstate Water Banking – Pursuant to A.R.S. § 45-2473, the Department of Water Resources and the Arizona Water Banking Authority (AWBA) submitted a report accounting for all monies received through the Interstate Water Banking Agreement with the Southern Nevada Water Authority (SNWA). The AWBA budget operates on a calendar year basis. During CY 2018, AWBA reported the storage of 13,500

acre-feet of the State of Nevada's unused Colorado River allocation. The initial costs for this storage was estimated to be $3,280,100. Storage payments must be adjusted for actual costs incurred, and the actual costs for CY 2018 totaled $3,268,300, slightly less than estimated. In addition to the cost of storage, a charge is applied for water delivered. This rate-charge is dependent on Central Arizona Water Conservation District's year-end reconciliation costs. The rate decreased from $49.00 per acre-foot to $33.34 per acre-foot, a decline of $15.66 per acre-foot. As a result, the SNWA was owed $211,400 (13,500 acre-feet x $15.66 per acre-foot) plus accrued interest, resulting in a total reimbursement of $224,600. Over time, Nevada and Arizona have amended the Interstate Water Banking Agreement in consideration of each state's water planning needs and the hydrologic conditions of the Colorado River. The original agreement entered into in 2001 by the states to support the storage of Colorado River water was last modified in 2013. Previously, Arizona agreed to guarantee the acquisition and storage of 1.25 million acre-feet of water at a cost of $330 million. The amended agreement in 2013 ended this requirement and both parties agreed that the $122.7 million that Arizona received from Nevada through 2013 covered the obligation for the current 600,651 acre-feet of stored water. With the modified agreement, Arizona and Nevada agreed that new deliveries and storage would be on a "pay as you go" basis and Nevada would be billed directly for these costs. (Elliot Chau)

17 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

September Spending

September 2019 General Fund spending was $670.5 million, which is an decrease of $(28.0) million below September 2018. Year-to-date, General Fund spending of $4.14 billion is an increase of $136.2 million above the prior year. (See Tables 10 & 11).

• Year-to-date, Department of Economic Security

(DES) spending has decreased by $(238.2) million compared to the prior year. This decline is related to the technical timing of Medicaid spending.

• State spending has increased due to the deposit of General Fund monies into the Budget Stabilization Fund (BSF). The enacted budget authorized 2 deposits from the state General Fund to the Budget Stabilization Fund: $271 million in FY 2019 (which was made in June 2019) and $271 million in FY 2020. As of mid-August the entire FY 2020 deposit was completed.

September 19Change FromSeptember 18 Year-to-Date

YTD Change from FY 19

AgencyAHCCCS 150.9 16.1 444.0 (30.2)

Corrections 87.8 21.7 391.2 16.2

Child Safety 17.6 3.2 76.2 (8.9)

Economic Security 3.4 (4.5) 269.8 (237.4)

Education 311.1 (56.1) 1,913.9 13.1

Health Serv ices 6.9 0.3 28.0 0.8

Public Safety 3.9 1.8 32.9 (3.6)

School Facilities Board 0.2 (9.6) 185.2 15.4

Univ ersities 62.7 2.1 188.4 9.7

Leaseback Debt Serv ice 0.0 0.0 77.7 (6.4)

Budget Stabilization Fund Deposit 0.0 0.0 271.1 271.1

Other 26.0 (3.0) 260.6 96.4

Total 670.5 (28.0) 4,139.0 136.2

Table 10General Fund Spending ($ in Millions)

18 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

Agency September 19

Change from

September 18 Year-to-Date

YTD Change

from FY 19

Dept. of Admin./Automation Projects Fund 494.8 (92.6) 15,643.4 8,384.6

ADOA – Sale/Leaseback Debt Service - - 77,709.3 (6,402.7)

Office of Administrative Hearings 57.9 9.6 251.3 16.8

Commission of African-American Affairs 17.4 9.7 36.6 8.1

Department of Agriculture 728.6 (444.7) 2,966.2 (202.8)

AHCCCS 150,855.6 16,091.1 444,031.1 (30,218.0)

Arts, AZ Commission on the 200.0 200.0 700.0 700.0

Attorney General 1,494.8 (1,957.0) 7,503.8 88.2

State Board of Charter Schools 312.0 237.8 480.5 157.1

Department of Child Safety 17,633.8 3,167.8 76,175.8 (8,875.3)

AZ Commerce Authority 1,291.7 - 4,000.1 125.0

Community Colleges 11.0 (129.9) 22,842.5 9,661.2

Corporation Commission 47.3 15.6 165.2 (791.2)

Department of Corrections 87,826.5 21,670.6 391,205.1 16,154.3

County Funding - - - -

AZ State Schools for the Deaf & Blind 1,711.9 541.5 7,186.2 1,938.4

Office of Economic Opportunity 33.3 (9.9) 249.9 131.1

Department of Economic Security 3,374.5 (4,500.9) 269,810.8 (237,414.9)

State Board of Education 59.0 16.3 351.0 177.7

Department of Education 311,068.0 (56,139.4) 1,913,850.9 13,075.2

DEMA 421.6 219.2 5,154.0 3,431.3

DEQ – WQARF - - - -

Office of Equal Opportunity - - - -

State Board of Equalization 17.9 (13.0) 219.6 118.5

Board of Executive Clemency 68.8 (108.0) 238.4 (101.7)

Department of Financial Institutions 111.1 9.6 654.6 366.3

Department of Forestry and Fire Management 723.3 191.4 2,593.0 42.8

Department of Gaming - - 2,509.5 730.0

Governor/OSPB 756.8 (492.0) 2,944.6 (121.6)

Department of Health Services 6,861.0 272.9 27,997.4 823.3

Arizona Historical Society 163.0 (9.4) 1,067.2 414.9

Prescott Historical Society of AZ 59.2 (4.7) 261.2 33.4

Department of Housing - - 3,750.0 3,750.0

Independent Redistricting Comm. - - - -

Department of Insurance 499.2 (140.0) 1,623.8 (75.8)

Judiciary

Supreme/Superior Court 2,550.2 451.1 29,688.9 3,559.1

Court of Appeals 1,628.8 7.5 4,332.2 (102.0)

Department of Juvenile Corrections 3,168.3 2,926.1 10,378.0 3,480.2

Table 11

General Fund Spending

($ in Thousands)

19 JLBC – MONTHLY FISCAL HIGHLIGHTS – OCTOBER 2019

Agency September 19

Change from

September 18 Year-to-Date

YTD Change

from FY 19

State Land Department 674.1 10.5 2,729.9 (233.8)

Legislature

Auditor General 1,696.5 55.2 5,878.0 407.8

House of Representatives 1,075.7 39.5 3,921.2 269.4

Joint Legislative Budget Comm. 181.9 (3.2) 616.4 (37.2)

Legislative Council 476.4 (15.9) 1,797.9 290.7

Senate 753.7 68.3 2,614.7 93.3

Mine Inspector 184.6 23.0 368.9 5.8

Nav. Streams & Adjudication 8.0 4.2 28.7 (7.9)

Phoenix Convention Center - - 23,500.0 503.7

Comm. for Postsecondary Ed. - (141.7) 833.6 10.2

Department of Public Safety 3,949.1 1,824.8 32,897.2 (3,605.9)

Public Safety Personnel Retirement System - - 6,000.0 (1,000.0)

Radiation Regulatory Agency - - - -

Real Estate Department 179.1 (178.2) 769.0 (30.7)

Department of Revenue 1,557.2 (3,140.9) 9,516.5 905.2

Rio Nuevo Distribution - - - -

School Facilities Board 170.0 (9,573.2) 185,166.7 15,404.8

Secretary of State 750.3 (581.9) 2,625.8 (1,685.9)

Tax Appeals Board - (18.1) 82.1 17.9

Office of Tourism - - 1,778.0 (355.6)

Department of Transportation 54.1 (907.4) 29,030.2 26,179.0

Governor's Office on Tribal Relations 2.4 (0.7) 19.4 1.3

Universities

Board of Regents 0.4 (47.8) 424.5 (14.3)

Arizona State University 29,702.0 1,256.2 85,479.2 4,571.5

Northern Arizona University 9,406.7 430.2 29,312.7 1,397.5

University of Arizona 23,542.1 509.5 73,176.7 3,709.4

Department of Veteran Services 373.6 0.6 1,650.9 116.9

Department of Water Resources 1,517.7 429.0 38,874.9 35,179.1

Department of Weights & Measures - - - -

Other - State Treasurer/JP Salaries 4.5 0.0 239.2 (101.1)

Other - Budget Stabilization Fund Deposit - - 271,107.0 271,107.0

Other - - - -

Total 670,507.2 (27,961.5) 4,139,011.2 136,159.4

Table 11 (Continued)

Arizona Economic Trends

Page:

2……Total Non-Farm Employment3……Average Hourly Earnings – Private Sector4……Initial Claims for Unemployment Insurance5……State Sales Tax Collections – Retail Category6……State Sales Tax Collections – Contracting

Category7……Residential Building Permits

October 2019Appendix A

JLBC 22

Total Non-Farm Employment

2,1002,2002,3002,4002,5002,6002,7002,8002,9003,000

Jan-

01Au

g-01

Mar

-02

Oct-0

2M

ay-0

3De

c-03

Jul-0

4Fe

b-05

Sep-

05Ap

r-06

Nov-

06Ju

n-07

Jan-

08Au

g-08

Mar

-09

Oct-0

9M

ay-1

0De

c-10

Jul-1

1Fe

b-12

Sep-

12Ap

r-13

Nov-

13Ju

n-14

Jan-

15Au

g-15

Mar

-16

Oct-1

6M

ay-1

7De

c-17

Jul-1

8Fe

b-19

Sep-

19

Thou

sand

s of J

obs

-10%-8%-6%-4%-2%0%2%4%6%8%

Jan-

01Ju

l-01

Jan-

02Ju

l-02

Jan-

03Ju

l-03

Jan-

04Ju

l-04

Jan-

05Ju

l-05

Jan-

06Ju

l-06

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11Ju

l-11

Jan-

12Ju

l-12

Jan-

13Ju

l-13

Jan-

14Ju

l-14

Jan-

15Ju

l-15

Jan-

16Ju

l-16

Jan-

17Ju

l-17

Jan-

18Ju

l-18

Jan-

19Ju

l-19

Year

Ove

r Yea

r Gro

wth

(%)

2,942,000 jobs(September 2019)

2.3% Y/Y Growth(September 2019)

JLBC 33

Average Hourly Earnings – Private Sector

$19

$20

$21

$22

$23

$24

$25

$26

$27

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Jan-

16

Jul-1

6

Jan-

17

Jul-1

7

Jan-

18

Jul-1

8

Jan-

19

Jul-1

9

$ / H

our

-6%-4%-2%0%2%4%6%8%

10%12%

Year

Ove

r Yea

r Gro

wth

(%)

3.3% Y/Y Growth(August 2019)

$26.54/ Hour(August 2019)

JLBC 44

Initial Claims for Unemployment Insurance

5,00010,00015,00020,00025,00030,00035,00040,00045,000

Jan-

01Au

g-01

Mar

-02

Oct-0

2M

ay-0

3De

c-03

Jul-0

4Fe

b-05

Sep-

05Ap

r-06

Nov-

06Ju

n-07

Jan-

08Au

g-08

Mar

-09

Oct-0

9M

ay-1

0De

c-10

Jul-1

1Fe

b-12

Sep-

12Ap

r-13

Nov-

13Ju

n-14

Jan-

15Au

g-15

Mar

-16

Oct-1

6M

ay-1

7De

c-17

Jul-1

8Fe

b-19

Sep-

19

Tota

l Mon

thly

Cla

ims

-50%

0%

50%

100%

150%

Jan-

01Ju

l-01

Jan-

02Ju

l-02

Jan-

03Ju

l-03

Jan-

04Ju

l-04

Jan-

05Ju

l-05

Jan-

06Ju

l-06

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11Ju

l-11

Jan-

12Ju

l-12

Jan-

13Ju

l-13

Jan-

14Ju

l-14

Jan-

15Ju

l-15

Jan-

16Ju

l-16

Jan-

17Ju

l-17

Jan-

18Ju

l-18

Jan-

19Ju

l-19

Year

Ove

r Yea

r Gro

wth

(%)

15,415 Claims(September 2019)

16.5% Y/Y Growth(September 2019)

JLBC 55

State Sales Tax Collections – Retail Category

$100

$125

$150

$175

$200

$225

$250

$275

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Jan-

16

Jul-1

6

Jan-

17

Jul-1

7

Jan-

18

Jul-1

8

Jan-

19

Jul-1

9

$ in

Mill

ions

-20%-15%-10%

-5%0%5%

10%15%20%

Aug-

06

Feb-

07

Aug-

07

Feb-

08

Aug-

08

Feb-

09

Aug-

09

Feb-

10

Aug-

10

Feb-

11

Aug-

11

Feb-

12

Aug-

12

Feb-

13

Aug-

13

Feb-

14

Aug-

14

Feb-

15

Aug-

15

Feb-

16

Aug-

16

Feb-

17

Aug-

17

Feb-

18

Aug-

18

Feb-

19

Aug-

19

Year

Ove

r Yea

r Gro

wth

(%)

7.4% Y/Y Growth(September 2019)

$225.0 Million(September 2019)

Excludes temporary 1-cent sales tax*January 2014 estimate adjusted downward by $30 million to reflect one-time category shift JLBC 66

State Sales Tax Collections – Contracting Category

$0

$25

$50

$75

$100

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Jan-

16

Jul-1

6

Jan-

17

Jul-1

7

Jan-

18

Jul-1

8

Jan-

19

Jul-1

9

$ in

Mill

ions

-50%-40%-30%-20%-10%

0%10%20%30%40%

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Jan-

16

Jul-1

6

Jan-

17

Jul-1

7

Jan-

18

Jul-1

8

Jan-

19

Jul-1

9

Year

Ove

r Yea

r Gro

wth

(%)

Excludes temporary 1-cent sales tax

21.3% Y/Y Growth(September 2019)

$57.7 Million(September 2019)

JLBC 77

Residential Building Permits

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Jan-

01Au

g-01

Mar

-02

Oct-0

2M

ay-0

3De

c-03

Jul-0

4Fe

b-05

Sep-

05Ap

r-06

Nov-

06Ju

n-07

Jan-

08Au

g-08

Mar

-09

Oct-0

9M

ay-1

0De

c-10

Jul-1

1Fe

b-12

Sep-

12Ap

r-13

Nov-

13Ju

n-14

Jan-

15Au

g-15

Mar

-16

Oct-1

6M

ay-1

7De

c-17

Jul-1

8Fe

b-19

Build

ing P

erm

its Single Family UnitMulti-Family Unit

31,581 Permits10,939 Permits

(August 2019)

12-Month Moving Sum

Monthly Cash Flow

Invested inStateTreasury

Deposits

Expenses

                    Page 1 Expenditures by Function ‐ General and Capital FundOctober 31, 2019

 33% of fiscal year completed

Annual BudgetYear to Date 

ActualActual as % of Budget

Year to Date Prior Year

% Change ExpensesCurrent Year vs. 

Instruction 11,329,492      2,611,765       23% 2,478,417       5%Academic Support 3,609,095        1,063,777       29% 1,005,091       6%Student Services 3,361,513        933,863          28% 918,252          2%Institutional Support 6,703,006        1,754,021       26% 1,627,273       8%Maintenance of Plant 5,851,383        1,261,287       22% 1,011,434       25%Student Financial Aid 1,299,000        448,767          35% 446,756          0%   Total 32,153,489      8,073,480       25% 7,487,223       8%

 ‐

 2,000,000

 4,000,000

 6,000,000

 8,000,000

 10,000,000

 12,000,000

Annual Budget

Year to Date Actual

Year to Date Prior Year

23%

29%28% 26%

22%

35%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Actual as % of Budget

% of fiscal year complete

                    Page 2 Primary Revenue SourcesOctober 31, 2019

 33% of fiscal year completed

Annual BudgetYear to Date 

ActualActual as % of 

BudgetYear to Date Prior Year

% Change Revenue ReceivedCurrent Year vs. Prior

Property Taxes 25,293,210 9,039,924 36% 8,717,963 4%Tuition & Fees 8,900,000 3,995,494        45% 3,987,529 0%State Appropriations 2,782,300 799,800 29% 829,000 ‐4%   Total 36,975,510          13,835,219     37% 13,534,492   2%

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

Property Taxes Tuition & Fees State Appropriations

Annual Budget

Year to Date Actual

Year to Date Prior Year

36%

45%

29%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Property Taxes Tuition & Fees State Appropriations

Actual as % of Budget

% fiscal year complete

                    Page 3 Expenditures by Object ‐ General and Capital FundOctober 31, 2019

 33% of fiscal year completed

Annual BudgetYear to Date 

ActualActual as % of 

BudgetYear to Date Prior Year

% Change ExpensesCurrent Year vs. Prior

Personnel Services 14,575,321        3,930,362     27% 3,943,931        0%Benefits 4,789,401          1,336,240     28% 1,283,635        4%Comm. and Utilities 1,190,110          305,498         14% 282,900            8%Travel 273,541             36,441           13% 32,702              11%Contracted Services 2,151,477          907,129         42% 764,946            19%Supplies and Materials 2,126,368          384,348         18% 346,488            11%Student Financial Aid 1,299,000          448,767         35% 446,756            0%Fixed Charges 687,605             504,987         73% 500,329            1%Capital 2,999,794          131,659         4% 128,177            3%Other/Contingency 2,065,772          60,165           3% 59,358              1%   Total 32,158,389        8,045,594     25% 7,789,222        3%

 ‐

 2,000,000

 4,000,000

 6,000,000

 8,000,000

 10,000,000

 12,000,000

 14,000,000

 16,000,000

Annual Budget

Year to Date Actual

Year to Date Prior Year

27%28%

14% 13%

42%

18%

35%

73%

4% 3%0%

10%

20%

30%

40%

50%

60%

70%

80%

Actual as % of Budget

% of fiscal year complete

                    Page 4 Capital Expenditures by FunctionOctober 31, 2019

 33% of fiscal year completed

Annual BudgetYear to Date 

ActualActual as % of Budget

Year to Date Prior Year

% Change ExpensesCurrent Year vs. Prior

Grant Funded Expenses

Instruction 0 0 0% 0 0% 0Academic Support 36,250 16,953 47% 15,525 9% 0Student Services 0 0 0% 0 0% 0Institutional Support 760,000 0 0% 0 0% 0Maintenance of Plant 2,203,544 131,659 6% 128,177 3% 0   Total Expenses 2,999,794 148,612 5% 143,702 3% 0

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Annual Budget

Year to Date Actual

Year to Date Prior Year

Grant Funded Expenses

0%

47%

0% 0%

6%

0%5%

10%15%20%25%30%35%40%45%50%

Actual as % of Budget

% of fiscal year complete

MOHAVE COMMUNITY COLLEGE’S CIRCLE OF CARECOMMITMENT TO CARING ABOUT CUSTOMERS

ON THE HORIZON

• MCC Circle of Care Kick-off – Dec 2020

• MCC Circle of Care familiarization and implementation – Spring 2020

• Little Wins & Big Thank Yous (recognition program) – Spring 2020

Human Resources ReportMonth Ending October 31, 2019

NEW HIRES

NameEffective

Date Position Campus SalaryVanessa Espinoza 10/7/2019 Multimedia Journalist NCK $43,500.00Alexander Curtis 10/7/2019 Academic Advisor NCK $38,500.00

TRANSFERS

NameEffective

Date From Campus To SalaryJonathan Neth 10/28/2019 Assistant Facilities Manager NCK Office Technician, Financial Services $15.24Brian Butti 10/28/2019 Maintenance Technician NCK Assistant Facilities Manager $16.31

RECLASSIFICATION

NameEffective

Date From Campus To Annualized Salary

TITLE CHANGE

NameEffective

Date From Campus To

SEPARATIONS

NameEffective

Date Position Campus Date of Hire Reason SalaryTiffany Port 10/4/2019 Manager, PN/RN Programs NCK 1/7/2013 Resignation $85,983.00Cassandra Ojeda 10/03/2019 Administrative Assistant, PCS BHC 4/16/2018 Resignation $12.02Melinda Silva 10/31/2019 Director, Recruitment & Customer ServiceNCK 8/16/2010 Resignation $72,478.00

10/31/2019

Position Title Site Date Vacated Vacated by Start Date Current Status

Resident Faculty, Electrical NCK 6/28/2019 John Roe Accepting Apps

Nursing Lab Assistant NCK 8/7/2019 Lisa Crossman Accepting Apps

Business Analyst, 19.5hpw NCK New Position New Position On Hold

Program Manager, CNA/Caregiver NCK 8/30/2019 Lori Casteel On Hold

Program Manager, PN/RN NCK 10/4/2019 Tiffany Port On Hold

Resident Faculty, Rad Tech BHC New Position New Position On Hold

Lab Assistant, HVAC LHC New Position New Position On Hold

Student Services Tech NCK 11/8/2019 Mandee Trowbridge Testing

Maintenance Tech NCK 10/25/2019 Brian Butti Interviewing

Resident Faculty, Biology BHC 8/8/2019 Vanja Velickovska Interviewing

Vacancy Report