HOW AN INSTITUTION IS RECOVERING AFTER A NATURAL DISASTER
If there were an economic recession in the near future, John Holdnak isn’t convinced it would have much impact on his community. By some accounts, it may take up to 10 years and $1 billion to replace the region’s damaged and destroyed housing stock, says Holdnak, president of Gulf Coast State College (GCSC), Panama City, Fla. “We’re looking at something of a sustained economic boom regardless of what might happen nationally.”
When Hurricane Michael struck the Florida Panhandle in October 2018, over the course of four short hours it wiped out one-third of the area’s housing. Many of the structures still standing in Panama City and the surrounding county were uninhabitable without significant repairs, including Holdnak’s condo. “That level of immediate upheaval not only changes the face of a community in the short-run, it can ultimately alter its long-term makeup,” Holdnak says. In fact, the Category 5 storm precipitated a series of ripple effects that continue to warp normal assumptions and timelines, he adds.
Wading through a new reality. While the GCSC campus reopened 27 days after the storm, it did so by the valiant efforts of faculty and staff—a number of whom slept in their cars and took showers in the college gym because they didn’t have places to live, Holdnak says. For the interim, the college loaded up full-time faculty with as many students as they could accommodate, made adjustments to adjunct loads, and rather than automatically filling staff vacancies, determined how they might merge positions, spread duties around, or reduce operating hours.
One year later the campus is about 85 percent rebuilt, with mostly punch-list items left to address, Holdnak says. The losses in repairs and restoration to bring buildings back to their prehurricane condition have amounted to about $58 million, with several million more to come. “Fortunately, we have good insurance,” Holdnak says. “We used to have good reserves.” The college has been forced to tap into those to help with payroll and operations. For the first time in its 61-year history, GCSC proposed and its board approved an unbalanced budget for FY20.
Waiting for people to return. It doesn’t help that enrollment has taken a hit. While the college was on track for its largest enrollment increase in more than a decade in fall 2018, it ended the year down nearly 15 percent. Enrollment assumptions for FY20 were based on a predicted 15 percent decline. “That’s pretty much been on target,” Holdnak says.
The shortage of available housing has forced many in the community to relocate. Whether that’s a temporary or permanent phenomenon remains to be seen, Holdnak says. The outlook for housing availability is slowly improving, with projections for some of the larger apartment complexes to come back online by the first quarter of 2020. The downside, says Holdnak, is that after being refurbished, rents for some housing are increasing as much as 50 percent. “That may keep a number of our students from eventually returning.” Further driving up rents and home sale prices is demand from the influx of contractors and construction workers who need places to live.
A looming question for GCSC is what’s at the end of this recovery in terms of the pipeline of college students. Area charter schools haven’t lost many students, but public secondary school attendance is reported to be down about 30 percent, Holdnak says. “When upward of 50 percent of our students in a given year might be local public high school graduates, we don’t yet know what that means for future enrollments.”
Enduring market competition. Another quirky contributing factor skewing enrollment projections: demand for unskilled labor. Local businesses are in huge competition for workers. In many instances, entry-level wages are double what they were prior to Hurricane Michael, Holdnak says. For instance, many fast-food and restaurant workers are making $13 to $14 per hour, and pizza delivery drivers are making $15 to $20 per hour. “Some high school students are figuring out they can make $35,000 a year. That makes it a harder pitch for us to convince them to complete a certificate program for which the starting salary might be $40,000,” Holdnak says. “Will we see some of them in five or 10 years when they have climbed as far up as they can in restaurant management and realize they want to do something else? We don’t know for sure.”
Realizing there’s no quick fix. When faced with a short-term budget crunch, you can eliminate travel and cut your professional development budget to get over the hump of a bad semester, Holdnak says. “But, if you want to remain viable, you can’t quit buying resources for your library or permanently ignore the training needs of employees. We can’t gut college programming if we want to be in a strong position once enrollments return.”
Looking ahead for opportunities. In the months following the storm, another huge question remained as to whether Tyndall Air Force Base, 12 miles east of Panama City, Fla., would rebuild after suffering extensive damage. According to Holdnak, the military presence in the region accounts for well over 30 percent of the local economy. That the base was approved for reconstruction and is now also helping to attract new aerospace and manufacturing business provides great opportunity for GCSC to develop programming and apprenticeship opportunities centered around engineering technology and high-tech manufacturing, Holdnak says. To that end, he has already identified potential partners to capitalize new equipment and salaries for several years.
Holdnak is also seeking grant funding that would allow him to put together scholarships and opportunity packages to recruit prospective students to the area. In one big win, GCSC has been successful in getting the Florida State legislature to pass a statute that any college that is negatively impacted by a hurricane, such that they lose 10 percent or more enrollment, can for three years after landfall recruit out-of-state students and for tuition purposes treat them as in-state students. “For us, that would equate to about one-fourth of what an out-of-state student would normally pay,” Holdnak says. He’s pressing forward with developing those opportunities despite the fact that available housing hasn’t yet come back fast enough for the college to actually take advantage of the new statute.
Emerging from limbo. Setbacks aside, Holdnak could not be prouder of the incredible faculty and staff he’s had the privilege of working with through the storm and its lingering impacts. “They kept students’ needs front and center, and we made sure that everyone who stuck with us completed their classes on time and graduated or transferred without any delays.” As for the near-term outlook for the college and the region, Holdnak says there are glimpses of progress being made every day. “We will get through this,” he confirms. “We are a resilient community, and we’re making plans. It’s just a lot of waiting and preparing in the meantime.”
KARLA HIGNITE, Fort Walton Beach, Fla., is a contributing editor for Business Officer.