FY2013-14 Budget OverviewOctober 4, 2012

CONFIDENTIAL – INTERNAL USE ONLY

Agenda

• Financial Context for FY2014 Budget– FY2012 Year End Review– FY2013 and beyond

• Preparing the FY2014 Budget– Timeline and Key Dates– Strategic initiatives– Budget Guidelines– Overview of Basic Forms

• Questions

FY2012 Year End Review

FY2012 – yet another successful year

Success due to entire Colby campus realizing the challenges ahead

(in $000s)

Total Revenues$140,176Total Expenses/Deductions$139,908Net $ 268

Endowment Returns• FY2012 Return in top quartile for college/university

endowments

FY2012 Year End Review

2008 2009 2010 2011 2012$0

$100

$200

$300

$400

$500

$600

$700

0.6%

(21.8%)

13.5%

24.0%

0.8%

Endowment Return

Mar

ket V

alue

in $

Mill

ions

FY2012 Year End Review

Gifts• Gift cash flows stable in FY2012

2007-08 2008-09 2009-10 2010-11 2011-12 $-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$23,149

$20,053 $20,663

$28,882

$20,719

FY2012 Year End Review

Debt• Colby issued bonds for the Biomass facility and new Science

building in FY2012

2008 2009 2010 2011 2012$0

$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000$90,000

$100,000

13.3%

17.2%

15.0%

12.0%

14.6%

Debt Debt-to-endowment

Out

stan

ding

Deb

t ($0

00s)

FY2012 Year End Review

BUD03 BUD04 BUD05 BUD06 BUD07 BUD08 BUD09 BUD10 BUD11 BUD12 BUD13$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Student Charges EndowmentGifts and Grants for Operations Auxiliaries and Other

Am

ounts

in $

000s

Revenues• Stable growth over the past decade• Increase in endowment utilized for operations

Year End 2012 Review

BUD03 BUD04 BUD05 BUD06 BUD07 BUD08 BUD09 BUD10 BUD11 BUD12 BUD13 $-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Compensation Financial Aid Reserve for Strategic InitiativesUtilities Debt Service Renovation AllocationOther Non-Compensation

Am

ounts

in $

000s

Expenses• Growth in compensation, financial aid and debt service• Non-compensation flat

Outlook: 2013 and 2014

Outlook: FY2013

Current Fiscal Year

• FY2011, FY2012 and now FY2013 each show steady state results.

• We are in the processing of adding 20 new FTEs as part of our strategic plan.

• Biomass plant on line. New storage facility, Museum and Science building under construction.

• Endowment has been at pre-2008 levels for two years now.

• Long-range financial model shows balanced to positive results.

Outlook 2013

Concerns:

• Local / State: local and state economies lag the nation’s economy, which is not strong either.

• National: looming “fiscal cliff” – expiration of tax cuts and implementation of mandatory budget cuts in January, 2013 unless Congress acts.

• International: no resolution to European euro crisis; “hot spots” throughout the Middle East

• Most will effect the endowment to some degree (positive or negative), but other effects may be evident as well.

Outlook 2014

Concerns:• Is the higher education market in this country still viable, and for

how long? • Is there a bubble looming?

Budget FY2013-14

BUDGET FY2014

• Timeline– September 28, 2012– “Budget Call” notice sent

– October 22, 2012 – Budgets due from all departments (sooner works, too)

– November 16, 2012 – Office of Financial Planning completes first draft of Preliminary Budget

– December, 2012 – Conference call with Budget and Finance and Compensation Committees

– February, 2013– Budget and Finance Committee approves the Preliminary Budget

– February - March, 2013 – Office of Financial Planning updates key assumptions and prepares final Proposed Budget

– April, 2013 – Board approves Proposed (Final) Budget

Budget FY2014

Strategic Initiatives:

• Staffing– 10 new faculty FTEs over the next three years– Academic support positions– Museum staffing– Benefits

• Financial aid– New aid awards and other support

• Capital projects– Operation costs for museum, science, and storage projects

• Other– On-going support for gift and grant-funded initiatives

BUDGET FY2014

• No more than 1% non-compensation increase

• No more than 2% student worker increase

• Web form will calculate the blended amount available

• Requests for deviations must be justified in writing and are not guaranteed

BUDGET FY2014

• How to Calculate FY2013-14 Budgets– Review budget-to-actual spending patterns

and strategic priorities for your area

– Not all items need to be kept at the same level - remember this is YOUR management document

– Consult with your vice president or dean as appropriate during the preparation process

– Consult with the Office of Financial Planning

– Budget request sent to PRIMARY Budget supervisor only; re-assignment to two additional supervisors possible

BUDGET FY2014

ACT 2012 BUD 2013BUD 2014

6100 Travel $30,000 $50,000 $40,000

6140 Postage $25,000 $30,000 $15,000

6340 Contract Svcs $20,000 $20,000 $46,000

Total $75,000 $100,000 $101,000

BUDGET FY2014

• Budget according to needs, but we do not subscribe to the “use it or lose it” approach

• We remain “bottom line” focused • across all object codes • across all VP areas

• If you think you need a capital project (Form E) you should have started in September, but if you have not, start ASAP by consulting with PPD

• If your budget includes cell phones you must consult with Ken Gagnon (x4239) on rates and equipment costs

Forms

BUDGET FY2014 - FORMS

• Operating Forms– Form A – Budget Request– Form B – Student Employment– Form D – Equipment, Furniture & Fixtures

• Form D is used for items costing more than $500 and having a useful life of more than 1 year.

• Other Forms (Use if necessary)– Form C – Temporary Summer Positions– Form F – Promotions, Re-classifications and/or Salary

Adjustments

• Separate Consideration– Form E – Facility Projects

• Refer to the web site for additional information and instructions

BUDGET FY2014 - FORMS

BUDGET FY2014 - FORMS

Status will change to SUBMITTED

Form A = Budget Request

Forms B and D = Backup Data for A

Forms C, E, F = Submit if necessary

BUDGET FY2014 - FORMS

BUDGET FY2014 – FORM A

BUDGET FY2014 – FORM A

BUDGET FY2014 – FORM B

BUDGET FY2014 – FORM C

• Remember – 4:30pm Monday, October 22

• Total non-compensation items limited to 1% increase over last year’s budget; 2% for student workers

• Instruction Overview on the web-site:

– Restricted Funds – Scott Smith x4123– Student Employment Form B – Bill Pottle x4130– Cell Service – Ken Gagnon x4239– Facility Projects – Form E – Kelly Doran x5031– Computer Hardware & Software Requests – Ray Phillips

x4209

BUDGET FY2014 - Reminders

• Remember – 4:30pm Monday, October 22

• Total non-compensation items limited to 1% increase over last year’s budget; 2% for student workers

• Instruction Overview on the web-site:

– Restricted Funds – Scott Smith x4123– Student Employment Form B – Bill Pottle x4130– Cell Service – Ken Gagnon x4239– Facility Projects – Form E – Kelly Doran x5031– Computer Hardware & Software Requests – Ray Phillips

x4209

BUDGET FY2014 - Reminders

• Office of Financial Planning will be consulting with areas as necessary

• Questions? call Scott Jones x5522 or Nora Dore x5521

• Web Site:

https://www.colby.edu/administration_cs/financialplanning/budgets/fy2014.cfm