Transcript Mott Community College Budget Update

Mott Community College
Board of Trustees and
Employee Open Forum
June 25, 2013
Financial State of the College Update
Final FY12-13 General Fund Budget
Summary
11-12 Actual
Revenues
12-13 Amend #1
$ 76,604,567
$ 73,180,846
$ 72,823,915
77,564,207
73,507,430
73,266,137
Expenditures
Excess (Deficit) Revenues
Over Expenditures
$
(959,640)
$
Fund Balance – Beginning
$
7,466,087
$
Fund Balance – Ending
$
6,506,447
$
Fund Balance Percent*
12-13 Amend #2
8.39%
*Target = 5% - 10% of Expenditure budget
(326,584)
$
(442,222)
6,506,447
$
6,506,447
6,179,863
$
6,064,225
8.40%
8.28%
2
PROPOSED FY 13-14 BUDGET
3
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.”
4
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
7-4. Seek and cultivate alternative resources to supplement and/or
increase existing revenue streams and funding sources
5
FUNDING SOURCES
(2013-2014)
State Aid
Property Taxes
-Operating
-Debt
Tuition
6
Enrollment and State and Local Funding per
Fiscal
Year
Equated
Students
(FYES)
$6,000
Revenue per FYES
$5,800
$5,600
Funding
$5,400
$5,200
$5,000
$4,800
$4,600
$4,400
$4,200
$4,000
Revenue per FYES
7
THEN and NOW
1999-2000
Tuition
32%
Other
6%
2012-2013
Tuition
50%
Taxes
26%
State
Aid
36%
State Aid Funding
$15,344,107
Other
5%
State
Aid
21%
Taxes
24%
State Aid Funding
$15,021,410
8
Projected Property Tax Funding
FYE 2010 through FYE 2016
($19.3 Million lost since 2009-2010)
$3.1 Million
$24
$22
$1.3 Million
Decrease
$23.3
$1.3 Million
Decrease
Millions
$20
$20.2
$18
$18.9
$17.6
$17.2
$17.5
$17.7
$16
$14
$12
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
9
Current Year Comparison of Millage Rates/Property
Tax Declines with State Grouping
2.50%
2%
2.00%
1.7%
1.50%
1.00%
0.50%
0.00%
-0.50%
-1.00%
Mott
0%
Grand
Rapids
1.99
Kalamazoo
Valley
0.2%
2.41
Schoolcraft
Delta
1.80
2.40
1.79
0%
Wayne
County
2.24
0%
Henry
Ford
3.00
Washtenaw
3.46
-1.0%
-1.50%
-2.00%
-2.50%
-2.4%
-3.00%
MCC is 3rd Lowest in Millage Rate, and has the Largest Property Tax Decline
Current Year Comparison of State of
Michigan Peer Group Property Tax
Revenue
60,000,000
2
50,000,000
40,000,000
3
30,000,000
20,000,000
10,000,000
0
7
8
6
5
4
1
Percentage of Property Tax and
State Aid of Total Funding
70%
60%
63%
58%
50%
40%
44%
45%
06/30/13
47%
06/30/12
51%
06/30/11
06/30/10
06/30/05
06/30/00
30%
12
Budget Balancing per Contact Hour
Property Taxes
State Aid
Tuition
Budget Cuts
Use of Fund Balance
$25
$19.44
Funding per Contact Hour
$20
$14.24
$15
$10.34 $9.66
$10
$5
$2.65
$0.73
$0.65
$9.37
$5.79
$9.18
$3.81
$1.82
$1.76
$0
-$5
-$10
$(4.03)
$(3.51)
$(4.10)
$(4.19)
$(6.45)
$(4.59)
-$15
-$20
$(15.81)
$(20.97)
-$25
-$30
$(25.79)
Fiscal Year
13
FEDERAL STUDENT FINANCIAL AID
AND MCC
14
Tuition and Financial Aid
20%
$8.4 mil
Federal Aid
4%
$1.8 mil
Other Aid
Cash Paying
76%
$31.2 mil
Total aid comprises 80% of MCC's total tuition revenue.
15
Millions
Pell Awards
35
30
Increased Five-Fold in Ten Years
25
20
15
10
5
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Academic Year
Pell Award & Cost of Tuition
Mott Community College
In-District
(Published 13/14)
Saginaw Valley
State University
In-State
Pell Awarded
$5,635
$5,635
Tuition & Fees
$4,042
$8,120
$1,000
$1,000
$593
-$3,485
(30 contact hours)
Books & Supplies
Difference
Student Receives
Remaining
Balance
Student Needs
Unmet
Pell Distribution – 12/13
2013/1 – 2013/4 - Preliminary
Approx. 7,635 Students
Awarded
Educational
Tuition &
Fees
$23,621,967
$17,675,343
Educational
Non-Educational
Books & Supplies
$$ Given To
Charges
Students
$3,040,480
$2,906,145
THE AMERICAN
OPPORTUNITY
TAX CREDIT (AOTC)
“PELL for Most EVERYONE ELSE ?”
American Opportunity
Tax Credit (AOTC)
How did his come to be?
Available Financial Aid (Pell and
American Opportunity Tax Credit)
Pell
American Opportunity Tax Credit
(AOTC)
“Pell for Most Everyone Else”
Maximum Award
$5,635
$2,500
Enrollment
Sliding Scale up to full-time
At least Half Time
Income Limits
Expected Family Contribution
Modified AGI< $80,000 Single
< $160,000 MFJ
Program of Study
Degree or Certificate-Accredited
Institution
Degree or Certificate-Accredited
Institution
Can be used for
Tuition, fees, books, equipment,
supplies, leftover can be for living
expenses
Tuition, fees, books, equipment,
supplies
Length of Award
6 years
4 years
Other Eligibility
Not convicted of a felony drug
offense
Not convicted of a felony drug
offense
Estimated - $14.3 Billion available annually for AOTC
Tuition and Fee 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
Student Administrative Fee
$ 117.23
$ 170.93
$ 243.00
$ 6.72
$ 117.23
$ -
$ 122.50
$ 177.96
$ 253.54
$ 7.02
$ 122.50
$ 8.50
$
$
$
$
$
$
5.27
7.03
10.54
0.30
5.27
8.50
22
Tuition & Fees: Local Comparison
College
Mott CC
Baker College - Flint
Eastern Michigan University
Saginaw Valley University
University of Michigan - Flint
Ferris State University
Central Michigan University
Oakland University
Davenport University
Michigan State University
University of Michigan – Ann Arbor
Kettering University
Yearly Tuition & Fees
4,042
7,560
7,701
8,120
9,102
10,440
10,950
11,183
11,544
12,622
13,625
29,536
Cost as based on rates published from the Peterson’s Guide at www.petersons.com
as of 5/2/2013
MCC’s annual cost is approximately 48% of that of the next
23
most affordable college/university in our area.
What if Tuition Covered State Aid Losses?
$175.48
$175.00
$166.72
$155.00
$128.65
$135.00
140.32
$115.46
$115.00
$99.61
$112.64
$103.37
$95.00
$75.00 $61.34
$55.00
$61.15
$69.00
$75.80
Actual
$82.05
$86.52
Hypothetical
Initial FY13-014 General Fund Budget
Summary
12-13 Amend #2
Revenues
Initial 13-14
$ 72,823,915
$ 75,223,819
73,266,137
75,657,116
Expenditures
Excess(Deficit) Revenues Over Expenditures
$
(442,222)
$
(433,297)
Fund Balance – Beginning
$
6,506,447
$
6,064,225
Fund Balance – Ending
$
6,064,225
$
5,630,928
Fund Balance Percent*
8.28%
7.44
*Target = 5% - 10% of Expenditure budget
25
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
Capital Asset
Funding
•Current 10 year needs are
approximately $85 million
•Taxable Values Declining
• Availability of Bonds?
•Approx. $1.6 million in
tech fees annually
30
Key Assumptions – Revenue
Tuition and fee revenue increases at 3.9% each year
Property tax revenue remain flat for 1 year with
slight increases (1.5-3.0%) thereafter
0.6410 Mill Voted Operating Millage is renewed for
10 years starting with FY08-09
State appropriations increase at 2%
Other revenues increase by 2% each year
Total revenue increases by avg. of 2.9%
31
Key Assumptions - Expenses
Salaries and wages increase by 3.2% each year
Fringe benefits increase at a rate of 3.0% each
year
Other expenses increase by avg. of 2.4% each
year
Total expenses increase by avg. of 3.0% each
year
32
Projected General Fund Balance would be $692 thousand
at end of FY19-20, if current trends continued (Revenue
growth of 2.9% vs. expenditure growth of 3.0%)
Based on an average projected gap of $823 thousand 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
33
7 Year Forecast at June 2012
Forecasts:>>>>>>>>>>>>>>>>>>>
Final
Revenues
Amended
Initial
Forecast
Budget
Budget
at
2012-2013
2013-2014 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
6/30/12
Tuition and Fees
35.7
38.9
40.5
42.1
43.7
45.4
47.2
49.1
51.1
Property Taxes
17.7
17.2
17.2
17.5
17.7
18.0
18.5
19.0
18.4
State Appropriations
15.0
15.3
15.6
15.9
16.2
16.6
16.9
17.2
17.2
4.4
3.7
3.8
3.8
3.9
4.0
4.1
4.2
4.0
72.8
75.2
77.1
79.4
81.7
84.0
86.7
89.5
90.7
3.2%
2.6%
2.9%
2.9%
2.9%
3.1%
3.2%
3.2%
All Others
Total Revenue
Revenue Increase (Decrease):
Expenditures
Salaries
39.8
40.1
41.4
42.7
44.1
45.5
46.9
48.4
50.4
Fringe Benefits
16.6
17.1
17.6
18.1
18.6
19.2
19.8
20.4
22.2
All Others
16.9
18.5
18.9
19.4
19.9
20.3
20.8
21.3
23.0
73.3
75.6
77.9
80.2
82.6
85.0
87.5
90.1
95.6
3.2%
3.0%
3.0%
3.0%
3.0%
3.0%
3.0%
3.6%
(0.43)
(0.8)
(0.9)
(0.9)
(1.0)
(0.8)
(0.6)
(4.9)
5.6
4.8
3.9
3.0
2.1
1.2
0.5
(12.9)
Total Expenditures
Expenditure Increase (Decrease):
Surplus/(Deficit):
Fund Balance
(0.44)
6.1
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.
34
Mott Community College
Board of Trustees
Committee of the Whole Meeting
June 24, 2013
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