Transcript Mott Community College Budget Update

Mott Community College
Board of Trustees
Committee of the Whole Meeting
June 25, 2012
BUDGET RESOLUTIONS
For Consideration and Vote
• Final Amended 2011-2012 Budget
• Initial 2012-2013 Budget
• Millage Authorization (Operating,
Debt)
• Tuition Recommendation beginning
Winter 2013
2
FINAL FY11-12 AMENDED
BUDGET:
General Fund
3
Final FY11-12 General Fund Budget
REVENUES:
Tuition & Fees -$588 thousand, -1.5% adj. credit-side
enrollment and projections down for Winter and Spring
2012
Property Taxes
-$185 thousand due to projected
increased delinquencies
State Aid
Other Revenue
increased)
no change
$354 thousand (auxiliary revenue
=Overall downward amendment to revenue
is -$356 thousand
-.47% change from January 2012 amendment
4
Final FY11-12 General Fund Budget
EXPENDITURES:
Amended downward by $770 thousand, a 1% change:
Salaries & Wages and Fringe Benefits
open positions.
--continued holds on
Non-salary related expenses
-- savings in contracted services
and material and supplies, with increases in utilities.
Transfers -- increase of designated scholarships and transfers
amongst sites to reflect actual anticipated activity.
5
Final FY11-12 General Fund Budget
Summary
10-11 Actual
Revenues
11-12 Amend #1
11-12 Amend #2
$ 76,710,276
$ 76,390,963
$ 76,035,286
76,518,073
77,609,947
76,839,675
$ (1,218,984)
$
(804,389)
Expenditures
Excess (Deficit) Revenues
Over Expenditures
$
192,203
Fund Balance – Beginning
$
7,273,879
$
7,466,082
$
7,466,082
Fund Balance – Ending
$
7,466,082
$
6,247,098
$
6,661,693
Fund Balance Percent*
9.76%
*Target = 5% - 10% of Expenditure budget
8.05%
8.67%
6
Final FY11-12 General Fund Budget
NET RESULTS OF AMENDMENT:
FUND BALANCE :
$315 thousand higher than the
January Amended Budget
6/30/12 projected to end with $(804,389) deficit, for a
total of $6.66 million
7
Reserves as Required by Board Policy #3930
_____________________________________________________________________
General Operating (01) Reserve
Requires 5-10% of annual operating expenses.
11-12 Amended Budget reserve of 8.67%
Maintenance & Replacement Fund (72)
Requires 1-3% of College depreciated assets or $3.1 M
11-12 Amended Budget reserve of $2.1 M
Amount needed to fully fund is $1 M
Building/Site Fund (78)
Requires 1-3% of College depreciated assets or $3.1 M
11-12 Amended Budget reserve of just slightly over $3 M
8
FUNDING SOURCES
(2012-2013)
State Aid
Property Taxes
-Operating
-Debt
Tuition
9
Trends in Funding Sources & Enrollment
40,000
$33,500,000
35,000
30,000
$23,500,000
25,000
$18,500,000
20,000
15,000
$13,500,000
10,000
$8,500,000
5,000
$3,500,000
0
State Aid
Property Taxes
Headcount
Headcount
Funding
$28,500,000
Trends in Funding Sources & Enrollment, Fiscal
Year Equated Students (FYES)
$6,500
$33,500,000
$6,000
$28,500,000
Funding
$23,500,000
$5,500
$18,500,000
$5,000
$13,500,000
$4,500
$8,500,000
$3,500,000
State Aid
$4,000
Property Taxes
Revenue per FYES
11
THEN and NOW
1999-2000
Tuition
32%
Other
6%
2012-2013
Tuition
53%
Taxes
26%
State
Aid
36%
State Aid Funding
$15,344,107
Other
5%
State
Aid
19%
Taxes
23%
State Aid Funding
$15,021,410
12
Projected Property Tax Funding
FYE 2010 through FYE 2016
$3.1 Million
$24
$22
$1.3 Million
Decrease
$23.3
$1.3 Million
Decrease
Millions
$20
$20.2
$18
$18.9
$17.6
$16
$17.1
$17.1
$17.4
$14
$12
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
13
Percentage of Property Tax and
State Aid of Total Funding
70%
60%
63%
58%
50%
51%
47%
40%
44%
42%
06/30/13
06/30/12
06/30/11
06/30/10
06/30/05
06/30/00
30%
14
Millions
Pell Awards
35
30
Increased Five-Fold in Ten Years
25
20
15
10
5
2002
2003
2004
2005
2006 2007 2008
Academic Year
2009
2010
2011
2012
Pell Award & Cost of Tuition
Mott Community College
In-District
(Published 12/13)
Saginaw Valley
State University
In-State
Pell Awarded
$5,550
$5,550
Tuition & Fees
$3,644
$8,134
$1,000
$1,000
$906
-$3,584
(30 contact hours)
Books & Supplies
Difference
Student Receives
Remaining
Balance
Student Needs
Unmet
Pell Distribution – 10/11
Sample of Approx. 9,540
Students
Awarded
$27,919,272
Educational
NonEducational
Books & Supplies Educational
Tuition & Fees
Charges
Govt. Refund
$18,729,369
$4,491,705
$4,698,199
Pell Distribution – 11/12
Sample of Approx. 9,700
Students
Awarded
$31,013,885
Educational
NonEducational
Books & Supplies Educational
Tuition & Fees
Charges
Govt. Refund
$21,128,548
$4,493,632
$5,391,705
Compensation as a Percentage of
the General Fund Budget
77.00%
76.50%
76.00%
75.50%
75.00%
74.50%
74.00%
2001
2013
Compensation expense would be $1.25 M higher if it was at 2001 levels as a
percentage of budget.
Ten year average salary increases are 1.35%.
PROPOSED FY 12-13 BUDGET
20
RELEVANT BOARD POLICIES:
_____________________________________________________________________
3100 Budget Adoption. “Budget revisions will be
brought forward for Board action as necessary, but not
less than twice per year in January and June.”
3920,3930 Financial Stability, Fiscal Reserves. “The
College will designate and set aside appropriate fund
reserves to support plans for long-term capital and
operating commitments.”
5100 Compensation Philosophy. “The Board has
determined based on long-term budget projections, and
other related budget data, that total compensation/
benefits should not exceed 77% of the total operating
budget.”
21
STRATEGIC PLAN
_____________________________________________________________________
7-0. Budget/Finance
7-1. Focus on controllable revenues and costs to sustain
our current reputation and facilities and provide funding
for strategic priorities
7-2. Establish short and long-term budget and finance
priorities that provide a balanced approach to the needs of
a learning organization with the flexibility to realign
resources
7-3. Implement a comprehensive strategy to address the
long-term deficit which enables us to continue to provide
affordable high quality education
22
STRATEGIC INITIATIVES FOR
12-13
Allocation for 12-13 is $50,000 for AQIP
$55,000 allocated for Department/Division
level strategic planning
Current AQIP Action Projects :
Developmental Education/Mandatory Placement
Campus Cultural/Behavioral Readiness
Wait List/Retention Alert
23
PROPOSED FY12-13 BUDGET
No Change in Budget Principles.
Uncertainty still remains.
Budget must support Strategic Plans
Minimize/offset impact on Students
Avoid overall reduction in Staffing
Maintain Fund Balance/Reserves
Maintain flexibility in Budget
Balanced Approach
24
PROPOSED FY12-13 BUDGET
Key Assumptions Revenues
Property Taxes
State Aid
Tuition
$ 1,287,950
$ 637,810
$ 1,612,930
PROPOSED FY12-13 BUDGET
Key Assumptions Expenditures
Transfers
Salaries, Wages and Fringe Benefits
Contracted Services
Utilities and Insurance
$
$
$
$
569,640
489,000
286,720
220,200
Initial FY12-013 General Fund Budget
Summary
11-12 Amend #2
Revenues
Initial 12-13
$ 76,035,286
$ 76,845,892
76,839,675
76,840,772
Expenditures
Excess(Deficit) Revenues Over Expenditures
$
(804,389)
$
5,120
Fund Balance – Beginning
$
7,466,082
$
6,661,693
Fund Balance – Ending
$
6,661,693
$
6,666,813
Fund Balance Percent*
8.67%
8.68%
*Target = 5% - 10% of Expenditure budget
27
PROPOSED “OTHER FUNDS”
FY12-13 BUDGETS
Main Point is Impact on Operating Budget:
Designated Fund $2.61Million Revenue Budget
(Scholarships, Student Enrichment, Copy Machines, Paid Parking,
Designated Technology Fee)
Auxiliary Enterprise Fund--$1 Million Budget
$728,940 Net “profit” supplements General Fund
(Catering, Vending, Bookstore, Computer Lab Printing, Lapeer Campus
Auxiliary)
28
PROPOSED “OTHER FUNDS”
FY12-13 BUDGETS
Main Point is Impact on Operating Budget:
Debt Retirement Fund
Millage Rate remains at 0.87 mill to meet debt obligations
Capital Funds—repair, upgrade of buildings, equipment,
technology, vehicles ($104 million in net value)
Instructional Technology Fee = $1.66 Million per year
$1.24 million per year planned transfer from General
Fund (minimum required annual expenses).
29
CAPITAL FUNDING
Link to Mission and
Strategic Plans
• MCC’s mission statement directs the
college to…
“maintain its campuses, state-of-the-art equipment,
and other physical resources that support quality
higher education. The college will provide the
appropriate services, programs, and facilities to
help students reach their maximum potential.”
MCC Asset Value vs. Time
(Asset Life)
Asset Value
Planned Maintenance
points
New
Premature
End of Life
End of Life
Extended Life
Deferred Maintenance
• Planned maintenance not performed
when scheduled
• Usually lack of funding – can be a
liability
• Leads to earlier asset replacement due to
premature end of life
Deferred Replacement
• Planned asset replacement not performed
when scheduled
– Usually lack of funding
– Can be a liability for the College
• “Run-to-failure” mode of operation
– Uses capital that should be scheduled for
other purposes
Capital Asset
Funding
•Current 10 year needs are
approximately $85 million
•Taxable Values Declining
• Availability of Bonds?
•Approx. $1.7 million in
tech fees annually
TUITION PROPOSAL
(CALENDAR YEAR 2013)
36
What if Tuition Covered State Aid Losses?
Add in Property tax loss = $325.48
$170.00
$160.00
Actual
$168.82
Hypothetical
$150.00
$140.00
$133.30
$130.00
$120.00
$110.00
$99.88
$100.00
$103.37
$90.00
$86.52
$80.00
$70.00
$60.00
$70.55
$61.34
$61.15
2001-2002
2004-2005
2009-2010
2011-2012
Tuition & Fees: Local Comparison
College
Mott CC
Saginaw Valley University
Eastern Michigan University
University of Michigan - Flint
Oakland University
Baker College - Flint
Ferris State University
Central Michigan University
University of Michigan – Ann Arbor
Michigan State University
Davenport University
ITT Technical of Flint
Kettering University
Yearly Tuition & Fees
3,644
8,134
8,637
9,182
9,938
10,080
10,440
10,950
12,634
12,821
15,150
31,272
33,946
Cost as based on in district/state rates from the College’s web sites
MCC’s annual cost is approximately 45% of that of the next
38
most affordable college/university in our area.
Tuition Recommendation
2012 2013
Calendar Calendar
Year Rate Year Rate Increase
Per Contact
Hour:
In-District Rate
Out of District Rate
Out of State Rate
Institutional Technology Fee
Student Services Fee
$108.05
$161.75
$215.49
$ 6.19
$108.05
$ 117.23
$ 170.93
$ 243.00
$ 6.72
$ 117.23
$
$
$
$
$
9.18
9.18
27.51
0.53
9.18
39
40
Key Assumptions – Revenue
Tuition and fee revenue increases at 3.9% each year
Property tax revenue decreases for 1 year with flat
and slight increases (1.5-2.5%) thereafter
0.6410 Mill Voted Operating Millage is renewed for
10 years starting with FY08-09
State appropriations increase at 3% for two years
and 2% increases thereafter
Other revenues increase by 2% each year
Total revenue increases by avg. of 2.8%
41
Key Assumptions - Expenses
Salaries and wages increase by 3.1% for one
year and then 3.8% thereafter
Fringe benefits increases at a historical
average rate of 4.5% each year
Other expenses increase by avg. of 3% each
year
Total expenses increase by avg. of 3.7% each
year
42
Projected General Fund Deficit would be $12.9 Million at
end of FY18-19, if current trends continued (Revenue
growth of 2.8% vs. expenditure growth of 3.7%)
Based on an average projected gap of $3.2 million per year
to be filled with budget-balancing solutions
Short-term savings and flexibility continues to be key
Long-term strategy of managing total compensation costs
43
7 Year Forecast at June 2012
Forecasts:>>>>>>>>>>>>>>>>>>>
Revenues
Final
Amended
Initial
Forecast
Budget
Budget
at
2011-2012
2012-2013 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
6/30/11
Tuition and Fees
39.0
40.6
42.2
43.9
45.6
47.4
49.2
51.1
47.4
Property Taxes
18.9
17.7
17.1
17.1
17.4
17.6
17.9
18.4
20.9
State Appropriations
14.4
15.0
15.5
15.9
16.3
16.6
16.9
17.2
15.4
3.7
3.5
3.6
3.7
3.7
3.8
3.9
4.0
3.9
76.0
76.8
78.4
80.6
83.0
85.4
87.9
90.7
87.6
1.0%
2.1%
2.8%
2.9%
2.9%
3.0%
3.2%
2.6%
All Others
Total Revenue
Revenue Increase (Decrease):
Expenditures
Salaries
39.5
40.6
41.8
43.4
45.1
46.8
48.6
50.4
48.9
Fringe Benefits
17.6
17.0
17.8
18.6
19.4
20.3
21.2
22.2
20.5
All Others
19.7
19.2
20.4
20.9
21.4
21.9
22.4
23.0
23.1
76.8
76.8
80.0
82.9
85.9
89.0
92.2
95.6
92.5
-0.1%
4.1%
3.6%
3.6%
3.6%
3.6%
3.6%
3.3%
-0.80
0.01
(1.6)
(2.3)
(2.9)
(3.6)
(4.3)
(4.9)
(4.9)
6.7
6.7
5.1
2.8
(0.1)
(3.7)
(8.0)
(12.9)
(13.7)
Total Expenditures
Expenditure Increase (Decrease):
Surplus/(Deficit):
Fund Balance
Note: the forecast illustrates proforma data if current trends were to continue. The College is obligated to
balance it’s budget each year and will take necessary steps to do so.
44
Mott Community College
Board of Trustees
Committee of the Whole Meeting
June 25, 2012
Questions or Comments?
For More Info.: Contact Larry Gawthrop, CFO (810) 762-0525 or [email protected]
Details Provided with Board Resolutions 1.39 and 1.40