Transcript FINAL FY13-14 AMENDED BUDGET:

Board of Trustees
Committee of the Whole Meeting
June 18, 2014
Budget Resolutions
For Consideration and Vote
Final Amended 2013-2014 Budget
Initial 2014-2015 Budget
Millage Authorization (Operating, Debt)
Tuition and Fee Recommendation beginning
Winter 2015
FINAL FY13-14 AMENDED BUDGET:
GENERAL FUND
Final FY13-14 General Fund Budget
REVENUES
Overall upward amendment to revenue is $2.0 Million;
2.28% change from January 2014 amendment
Transfers
In
Tuition,
Grants,
Property
Taxes
$350,000 Decrease from
Reserves
Up $400k
State
Aid
$1.6 Million for the
UAAL Rate Stabilization
Payments
Final FY13-14 General Fund Budget
EXPENDITURES
Amended upward by $1.3 Million; 1.73%
Salaries
& Fringe
Benefits
$1.6 Million for the UAAL
Rate Stabilization Payments
Nonsalary
related
expenses
Savings in contracted services,
materials & supplies, and utilities,
increase in bad debt expense,
equipment
Final FY13-14 General Fund Budget
SUMMARY
12-13 ACTUAL
Revenues
$ 73,746,195
13-14 AMEND #1
$
73,671,482
Expenditures
13-14 AMEND #2
73,313,454
$ 75,078,928
73,896,751
75,265,897
Excess (Deficit) Revenues
Over Expenditures
$
74,712
$
(583,297)
$
(186,969)
Fund Balance – Beginning
$
6,506,447
$
6,581,160
$
6,581,160
Fund Balance – Ending
$
6,581,160
$
5,997,863
$
6,394,191
Fund Balance Percent*
* Target = 5% - 10% of expenditure budget
8.92%
8.18%
8.52%
Final FY13-14 General Fund Budget
NET RESULTS OF AMENDMENT:
 6/30/2014 projected to end with ($187,000) reduction
 FUND BALANCE : $400,000 higher than the January
Amended Budget
Reserves as Required by Board Policy #3930
FUND
Fund Name
Requires
01
72
78
General Operating
Reserve
Maintenance &
Replacement Fund
Building & Site
Fund
5-10% of annual
operating expenses
1-3% of College
depreciated assets
or $3 M
1-3% of College
depreciated assets
or $3 M
8.5%
$1.6 million
$1.8 million
$1.4 million
$1.2 million
13-14 Amended
Budget Reserve
Amount Needed to Fully Fund
Funding Sources
State Aid
2014 -2015
Tuition
Debt
Property
Taxes
Operating
THEN and NOW
1999-2000
Tuition
32%
2013-2014
Tuition
49%
Taxes
26%
State
Aid
37%
Other
5%
State Funding
$15,344,107
State
Aid
21%
Other
6%
State Funding
$15,306,817
Taxes
24%
What if Tuition Covered State Aid Losses?
Actual
$167
$175 $175
$147
$129 $130 $133
$100 $100
2012-2013
$103
2011-2012
$94
2010-2011
2005-2006
$87
2009-2010
2004-2005
$85
2008-2009
$71
$82
2007-2008
$63
$80
2006-2007
$61
$69
$76
2003-2004
$73
2002-2003
$61
$113
$120
2013-2014
$115 $121
2001-2002
$200
$180
$160
$140
$120
$100
$80
$60
$40
$20
$-
Hypothetical
Projected Property Tax Funding
FYE 2010 through FYE 2016
Millions
($19.4 Million lost since 2009-2010)
$24
$22
$20
$18
$16
$23.3
$20.2
$18.9
$17.7
$17.2
$17.2
$17.5
$14
$12
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
Enrollment and State and Local Funding per
Fiscal Year Equated Students (FYES)
Revenue per FYES
$6,500
$5,500
$5,000
$4,500
2012-2013
2011-2012
2010-2011
2009-2010
2008-2009
2007-2008
2006-2007
2005-2006
2004-2005
2003-2004
2002-2003
$4,000
2001-2002
Funding
$6,000
Percentage of Property Tax and State Aid of
Total Funding
70%
65%
60%
63%
55%
60%
62%
60%
59% 58%
57% 56% 56%
50%
54%
51%
45%
47%
40%
44% 45% 45%
35%
6/2014
6/2013
6/2012
6/2011
6/2010
6/2009
6/2008
6/2007
6/2006
6/2005
6/2004
6/2003
6/2002
6/2001
6/2000
30%
Based on 2012 – 2013 ACS Data
Current Year Comparison of Millage Rates /
Property Tax Declines with State Grouping
0.0%
Grand
Rapids
Schoolcraft
-0.3%
-2.0%
Property Taxes
-3.0%
Delta
Wayne
County
-1.7%
Kalamazoo
Valley
Mott
Washtenaw Henry Ford
3.5
-0.7%
-0.9%
3.0
-2.5%
2.5
-4.0%
2.0
-4.5%
-5.0%
-6.0%
-4.6%
1.5
1.0
-7.0%
-8.0%
-7.7%
-9.0%
MCC is 3rd Highest Millage Rate, and has the Largest Property Tax Decline
0.5
-
Millage Rates
-1.0%
4.0
$60
$50
$40
$30
$20
8
7
6
5
4
3
2
1
Schoolcraft
Delta
Mott
Grand Rapids
Washtenaw
Wayne County
$-
Kalamazoo
Valley
$10
Henry Ford
Millions
Current Year Comparison of State of
Michigan Peer Group Property Tax Revenue
Comparison of State of Michigan Peer Group
Revenue Percentages
Based on 2012 - 2013 ACS Data
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
45%
41%
53%
21%
Delta
17%
Grand Rapids Henry Ford
All Other
34%
38%
49%
45%
17%
13%
15%
Schoolcraft
Washtenaw
Wayne
County
31%
29%
22%
19%
Kalamazoo
Mott
11%
24%
Tuition & Fees
51%
34%
26%
Property Tax
47%
63%
32%
State Aid
Expenditure Reductions
Energy Conservation Project
Utility costs averaged 8.2% in 2003; now they are 3.1%
Hold on vacant positions
Average savings of $750K per year
Change in timing of custodial shift
Savings of approximately $170K per year
Eliminating and restructuring food service
Was losing approximately $100K per year
Now generating $48K per year in revenues
More Expenditure Reductions
Utility Reduction Analyst Project
Resulted in $720K savings between 2004-2010 on Telecommunications/IT, Water & Waste
Employee Contract Bargaining
Employees agreed to pay freezes with
incremental increases over 9 years at 1.35%
Industry average is 2.8%
Savings of $460K per year
Course Section Efficiency
Maximizing section seat count before adding new sections
Discretionary budget cuts
Average savings of $400K per year
Even More Expenditure Reductions
Reduction of ORP (optional retirement plan) costs
Average annual savings of $400K
Combining Deans position
Fine Arts and Social Science combined saving $168K per year
Outsourcing custodial and grounds work at sites
Savings of approx. $350K per year
Health Insurance changes to coverage and plans
Savings $550K
New print shop lease
Savings of $200,000 per year
New Auditors
Savings of $60,580 over five years
Tuition & Financial Aid
Federal Aid
$27,100,000 ,
72%
Other Aid
Cash Paying
Total aid comprises 78% of
MCC’s total tuition revenue
$8,300,000
22%
$2,300,000
6%
Millions
Pell Awards
$35
$30
$25
$20
$15
$10
$5
$0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Academic Year
Pell Award & Cost of Tuition
(PUBLISHED 13-14)
MOTT COMMUNITY
COLLEGE IN-DISTRICT
SAGINAW VALLEY STATE
UNIVERSITY IN-STATE
Pell Awarded
$5,730
$5,730
Tuitions & Fees
$4,271
$7,985
$1,000
$1,000
$459
- $3,255
(30 contact hours)
Books & Supplies
Difference
Student receives
remaining balance
Student needs unmet
Pell Distribution – 2013/2014
Approximately 7,282 Students
AWARDED
$ 22,570,894
EDUCATIONAL
TUITION & FEES
$ 17,655,767
2014/1 to 2014/4 - Preliminary
EDUCATIONAL BOOKS NON-EDUCATIONAL $$
& SUPPLY CHARGES
GIVEN TO STUDENTS
$ 2,659,748
$ 2,255,379
Available Financial Aid (Pell & American
Opportunity Tax Credit)
Pell
American Opportunity Tax Credit
(AOTC) “Pell for Most Everyone Else”
Maximum Award
$5,730
$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
Tuition & Fee Recommendation
Per
Contact
Hour
2013 CY RATE
2014 CY RATE
In-District Rate
$ 122.50
$ 126.30
$ 3.80
Out of District Rate
$ 177.96
$ 183.48
$ 5.52
Out of State Rate
$ 253.54
$ 261.40
$ 7.86
$ 7.02
$ 7.24
$ 0.22
$ 122.50
$ 126.30
$ 3.80
$ 8.50
$ 8.76
$ 0.26
Institutional Technology Fee
Student Services Fee
Student Administrative Fee
INCREASE
Tuition & Fees: Local Comparison
College
Yearly Tuition
& Fees
Mott Community College
$ 4,271
Saginaw Valley University
$ 7,985
Eastern Michigan University
$ 7,989
Baker College – Flint
$ 8,280
University of Michigan – Flint
$ 9,426
Oakland University
$ 10,613
Ferris State University
$ 10,950
Central Michigan University
$ 11,220
Davenport University
MCC’s annual cost is
approximately 48%
of that of the next
most affordable
college/university in
our area
Not Reported
Michigan State University
$ 12,862
University of Michigan – Ann Arbor
$ 13,783
Kettering University
$ 29,536
Cost is based on rates published from
the Peterson’s Guide at
www.petersons.com as of
6/11/2014.
Relevant Board Policies
3100 BUDGET ADOPTION
• Budget revisions will be brought forward for Board action as necessary,
but not less than twice per year.
3920 FINANCIAL STABILITY & 3930 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
Strategic Plan
7-0 Budget/Finance
7-1
7-2
7-3
7-4
Focus on controllable
revenues and costs to
sustain our current
reputation and
facilities and provide
funding for strategic
priorities
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
Implement a
comprehensive
strategy to address
the long-term deficit
which enables us to
continue to provide
affordable high
quality education
Seek and cultivate
alternative resources
to supplement and/or
increase existing
revenue streams and
funding sources
Proposed FY14-15 General Fund Budget
REVENUES – KEY ASSUMPTIONS
Tuition
& State
Aid
$1.5 million in tuition &
fees; $430,000 in State Aid
Property
Taxes
Grants &
Other
unchanged
($100,000) decrease in
transfers in
Proposed FY14-15 General Fund Budget
EXPENDITURES – KEY ASSUMPTIONS
Salaries
& Fringe
Benefits
No across the board increases,
minimal increase in health
insurance (hard cap), and
blended MPSERS rate
Other
Expenses
Additional bad debt expense
Initial FY14-15 General Fund Budget
13-14 AMEND #2
INITIAL 14-15
Revenues
75,078,928
75,430,356
Expenditures
75,265,897
75,424,741
Excess (Deficit) Revenues Over Expenditures
(186,969)
5,615
Fund Balance – Beginning
6,581,160
6,394,191
Fund Balance – Ending
6,394,191
6,399,806
Fund Balance Percent*
8.52%
8.45%
* Target = 5% - 10% of expenditure budget
Proposed “Other Funds” FY14-15 Budgets
Main Point is Impact on Operating Budget
 Designated Fund $2.7Million Revenue Budget
 Scholarships, Student Enrichment, Copy Machines,
Paid Parking, Designated Technology Fee
 Auxiliary Enterprise Fund $994,000 Budget
 $751,750 Net “Profit” Supplements General Fund
 Catering, Vending, Bookstore, Computer Lab Printing,
Lapeer Campus Auxiliary
Proposed “Other Funds” FY14-15 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 ($101 million in net value)
 Instructional Technology Fee = $1.55 Million per year
 $765,000 per year planned transfer from General Fund
(minimum required annual expenses)
Regional Technology Center
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.”
Capital Asset Funding
Current 10 year needs are
approximately $85 million



Taxable Values Declining
Bond Millage passed in
November 2013 ($50 M)
Approx. $1.6 million in tech
fees annually
7 – Year Forecast
 Key Assumptions – Revenue
 Tuition and fee revenue increases at 1.0% each year
 Property tax revenue remain flat for 1 year with slight




increases (0.5-1.0%) thereafter
0.6410 Mill Voted Operating Millage is renewed for 10
years starting with FY08-09
State appropriations increase at 1%
Other revenues increase by 2% each year
Total revenue increases by an average of 1.4%
7 – Year Forecast
 Key Assumptions - Expenses
 Salaries and wages increase by 2.5% each year
 Fringe benefits increase at a rate of 2.0% each year
 Total expenses increase by avg. of 2.4% each year
7 – Year Forecast
 Projected General Fund Balance would be ($12.7)
million at end of FY20-21, if current trends continued
(Revenue growth of 1.4% vs. expenditure growth of
2.4%)
 Based on an average projected gap of $823,000 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
7 Year Forecast at June 2014
AMENDED
BUDGET 13-14
REVENUES
INITIAL
BUDGET
14-15
15-16
16-17
17-18
18-19
19-20
20-21
Tuition & Fees
36.6
38.2
38.6
38.9
39.3
39.7
40.1
40.5
Property Taxes
17.3
17.3
17.6
18.0
18.4
18.9
19.4
19.9
State Appropriations
16.9
15.7
15.9
16.1
16.2
16.4
16.5
16.7
4.2
4.2
4.3
4.3
4.4
4.5
4.6
4.7
75.1
75.4
76.4
77.3
78.4
79.5
80.7
81.8
0.5%
1.2%
1.3%
1.4%
1.4%
1.4%
1.4%
All Others
TOTAL REVENUE
Revenue Increase (Decrease)
EXPENDITURES
Salaries
40.0
40.3
41.3
42.4
43.4
44.5
45.6
46.7
Fringe Benefits
18.6
17.6
18.0
18.3
18.7
19.1
19.4
19.8
All Others
16.7
17.5
18.0
18.5
19.1
19.6
20.1
20.7
75.3
75.4
77.3
79.2
81.2
83.1
85.2
87.3
0.1%
2.6%
2.4%
2.4%
2.4%
2.4%
2.5%
(0.19)
0.06
(1.0)
(1.9)
(2.7)
(3.6)
(4.5)
(5.5)
6.3
6.4
5.4
3.4
0.7
(2.9)
(7.4)
(12.9)
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 its
budget each year and will take necessary steps to do so.
Board of Trustees
Committee of the Whole Meeting
June 18, 2014
Questions or Comments?
Larry Gawthrop, CFO
(810) 762-0525
[email protected]
Details Provided with Board Resolutions 1.39 and 1.40