Northern Essex Community College
Board of Trustees Audit and Finance Committee Minutes
Wednesday, February 4, 2026
Attendees: Trustees Jennifer Borislow, Lloyd Hamm, and Evan Silverio, President Lane Glenn, Michael McCarthy, Anthony DeGregorio, Jenn Ball, Jim McCarthy (GW&K), Joe Pasquale (GW&K) notetaking: Kathleen Teixeira
With no quorum established, Chairman Silverio called the meeting to order 4:10 pm. The minutes of the December 3 meeting were not approved and tabled to the April 2026 meeting.
President Lane Glenn joined the meeting at 4:16 pm.
FY26 Quarter 2 Budget Update (AFC-26-05)
Executive Vice President Michael McCarthy provided an overview of FY26 second quarter financials, including enrollment trends, revenue projections, and expense monitoring.
Enrollment:
• Fall credits came in slightly below projections, with a modest decline in credit volume.
• Early College credits are excluded from this analysis/schedule.
• Spring enrollment is expected to show a slight increase (~3,000 credits).
Revenue Highlights
• Tuition & Fees projected at $28.5M (↑ $3.6M from FY25, but slightly above $300k from FY26 budget).
• Student Financial Aid projected at $15.1M (↑ from $14.6M in FY25), driven by Free College participation and FAFSA completion rates.
• Grants & Other Revenue projected at $33.9M, consistent with prior year and FY26 Budget.
Expenses:
• Salaries & Benefits projected at $57.6M (fully funded positions; vacancy savings retained).
• Operating Expenses projected at $23.9M (consistent with FY25).
• Depreciation projected at $4.8M due to capital investments.
• Bad Debt projected at $400K, with continued monitoring tied to Free College compliance processes.
Other Financial Notes:
• Investment income projected at $1.95M (consistent with FY25).
• Capital appropriations estimated at $500K, subject to timing of project funding.
• State estimated funding formula resulted in a positive net position change of ~$1.3M.
Summary:
• Total Operating Revenue projected at $47.3M.
• Financial position remains stable with conservative budgeting practices.
• Administration continues to monitor external funding risks and enrollment trends
Discussions: Financial Risks & Outlook:
• Potential federal funding reductions could impact state appropriations.
• Concerns raised regarding Medicaid/Medicare funding pressures affecting state budgets.
• Free College program sustainability remains a long-term concern.
• Leadership emphasized maintaining reserves to prepare for economic uncertainty.
Investment Portfolio Review – GW&K
Representatives from GW&K Investment Management presented a portfolio update.
Performance Overview:
• 2025 returns: ~10.7% overall
• Equities: ~13% growth, led by U.S. large-cap stocks
• Fixed Income: ~8% return, driven by yield performance
Market Outlook:
• Economic conditions remain stable despite volatility concerns.
• Strong consumer spending and AI-driven growth continue to support markets.
• Risks include inflation, federal policy changes, and valuation levels.
Investment Policy Statement (IPS) Discussion:
• Current IPS is outdated (originating from the 1990s).
• Proposed updates include:
o Expanded diversification guidelines (small-cap, mid-cap, international exposure)
o Updated asset allocation ranges
o Alignment with current portfolio practices
• No immediate changes required; proposal focuses on governance and long-term alignment.
• Implementation would occur gradually over time (estimated through September 2026).
Action/Next Steps:
• With no quorum established, the Committee agreed to table formal recommendation until the April 2026 meeting.
• Additional review and potential revisions to be presented at a future meeting.
Athletics Complex Project Update:
• Design and planning progressing with architects and engineers.
• Central Catholic High School has withdrawn from the partnership.
• Potential new partner under discussion.
• Active fundraising and sponsorship efforts underway.
• Project timeline:
o Design completion: ~1–1.5 months
o Potential bid phase and financing review to follow
o Target: Shovel-ready by August 2026
• Financing strategies under review, including phased funding and borrowing options.
Other Business:
• Discussion on Board meeting agenda sequencing (Audit & Finance to follow unfinished business).
• Investment discussion to be revisited at full Board level.
Adjournment
With no further business, the meeting was adjourned at 4:57 PM.
