College Extends Contract With No Escape Clause

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Three years into a 10-year contract, Gila Community College board members on Friday approved an extended agreement with Eastern Arizona College that could save Gila County up to $300,000 this year.

Originally set to expire in 2015, the contract will now last until 2018. The extended term proved a sticking point for Payson board member Larry Stephenson, who voted

against one part of the two-pronged measure. Absent was Payson board member Don Crowley, who earlier cited similar objections.

The vote came three weeks after a long-awaited work-study session in Globe where board members publicly agreed, for the first time, to work toward full-accreditation and full funding. Stephenson had asked repeatedly for such a meeting.

Friday, board chairman Bob Ashford said the contract’s renewal doesn’t affect the board’s ultimate goal. “Either party could cancel this agreement with 90-days notice,” he said. The cooperation agreement allows such a termination at the end of the first, third, fifth, seventh and ninth years.

Crowley previously expressed concern that the new contract didn’t contain escape clauses at the end of years 11 and 13, which prompted Stephenson to vote no.

“It’s kind of a tit-for-tat,” Stephenson said. “You know, they give us something, we give them something.”

Ashford responded that give and take is natural in contract negotiations. “I don’t see what the problem is,” he said.

The law forbids Gila County from running its own college because its property valuations and population counts fall below threshold limits, and so EAC runs it. Because of the school’s provisional status, it receives less than half the per-student funding that other community colleges receive.

Board members tabled the contract in September after Crowley asked the college’s senior dean to calculate a comparison of overhead costs under the new formula and the old formula, based on current and increased numbers of full-time students.

Crowley said he wanted to ensure that the college fared at least as well financially under the new agreement as under the old agreement.

The original 10-year-contract, agreed to in 2005, required GCC to pay EAC 25 percent overhead on all expenditures as long as enrollment stayed under the equivalent of 850 full-time students.

Enrollment, however, has grown dramatically and recently rose above 1,000 full-time students for the first time, reaching 1,020 as of Friday. Senior Dean Stephen Cullen said the numbers he listed made GCC the fastest-growing community college in the state, “and not by a little, but by a lot.”

Under the old contract, which changed the formula for calculating overhead after 850 students, GCC would have paid EAC a 30.2-percent surcharge on all expenditures this year. Ashford calculated that could have cost GCC an extra $300,000.

On Friday, Ashford said Pima Community College, which used to run GCC, charged a 30-percent overhead rate.

“I’m not defending Pima, please,” Stephenson said. “The fact that we have to amend it (the contract) now reflects badly on what we agreed to earlier.”

The agreed upon amendment requires that GCC pay 25-percent overhead with full-time student enrollments of 750 or less. The percentage decreases incrementally to 24 percent after 1,500 students.

With 1,000 full-time students, GCC will pay 25.5 percent overhead, and will continue at that rate until the school enrolls 1,499 students.

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