2012-2013 Budget/Finances
description
Transcript of 2012-2013 Budget/Finances
Mott Community College
Finance/Personnel Committee Meetings
June 20, 2012
2012-2013 Budget/Finances
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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
• A balanced approach
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Trends in Funding Sources & Enrollment
Trends in Funding Sources & Enrollment, Fiscal Year Equated Students (FYES)
2001
-200
220
02-2
003
2003
-200
420
04-2
005
2005
-200
620
06-2
007
2007
-200
820
08-2
009
2009
-201
020
10-2
011
$3,500,000
$8,500,000
$13,500,000
$18,500,000
$23,500,000
$28,500,000
$33,500,000
$4,000
$4,500
$5,000
$5,500
$6,000
$6,500
State Aid Property Taxes Revenue per FYES
Fund
ing
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CURRENT YEAR BUDGET IMPACT
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FYE 2013 Impact in Dollars
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$5,795,000
Tuition Keeps Up with Lost Funding/Increase in Non-controllable costs for FYE 2013
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$40.87
$148.92
$61.15
$70.55$86.52
$103.37
$61.34
$99.88
$133.30
$168.82
$60.00
$70.00
$80.00
$90.00
$100.00
$110.00
$120.00
$130.00
$140.00
$150.00
$160.00
$170.00
2001-2002 2004-2005 2009-2010 2011-2012
Actual
Hypothetical
What if Tuition Covered State Aid Losses?
Current Year Budget Balancing Steps
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Current Year Budget Considerations• Decreased Hiring (Open Position Pool) $ 350,000• Health Insurance Savings $ 600,000• State Aid Increase $ 637,000• Cut Reserve Funding $ 620,000• Capital Funding Reduction $1,060,000• Cut Contingency $ 900,000
Total budgetary expenditure cuts $4,167,000
Beginning shortfall ($5,795,000)
Shortfall remaining ($1,628,000)
BUDGET SHORTFALL 2012-2013
Shortfall Remaining $ 1,628,000
Tuition To Cover $9.18/contact hour
Tuition and Financial Aid
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67%9.74%
23.26%
Federal Aid Other Aid Cash Paying
$9.3 mil
$26.7 mil
$3.9 mil
Total aid comprises 76.74% of MCC's total tuition rev-enue.
FEDERAL FINANCIAL ASSISTANCEPELL GRANTS
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5
10
15
20
25
30
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2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Mill
ions
Academic Year
Pell Awards
Increased Five-Fold in Ten Years
Pell Distribution – 10/11
Awarded Educational Tuition & Fees
EducationalBooks & Supplies
Charges
Non-Educational
Govt. Refund
$27,919,272 $18,729,369 $4,491,705 $4,698,199
Sample of Approx. 9,540 Students
Pell Distribution – 11/12
Awarded Educational Tuition & Fees
EducationalBooks & Supplies
Charges
Non-Educational
Govt. Refund
$31,013,885 $21,128,548 $4,493,632 $5,391,705
Sample of Approx. 9,700 Students
Pell Award & Cost of TuitionMott Community College
In-District(Published 12/13)
Saginaw ValleyState University
In-State
Pell Awarded $5,550 $5,550
Tuition & Fees(30 contact hours)
$3,644 $8,134
Books & Supplies $1,000 $1,000
Difference $906 -$3,584
Student Needs Unmet
Student Receives Remaining
Balance
THE AMERICAN OPPORTUNITY
TAX CREDIT (AOTC)
“PELL for Most EVERYONE ELSE ?”
Pell American Opportunity Tax Credit (AOTC)
“Pell for Most Everyone Else”
Maximum Award $5,550 $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
Available Financial Aid (Pell and American Opportunity Tax Credit)
Estimated - $14.3 Billion available annually for AOTC
EXPANDED BENEFIT OF A REFUNDABLE CREDIT
Tax Year 2011 Students Total Tax Liability equaled $1,658
They had Paid in (withheld from wages) $2,699 Refund without any credits would be $1,041
But Wait…… They were refunded with the AOTC $3,219
Only the Hope Credit?…… The refund would have been $2,348
Or a “Federal Financial Aid Award” of $871
Total tuition/fees increase Annual
Amount
$ Increase AOTC Refundable
Credit
Year: 2011-2012
12 Contact Hours (PT) 137.66 634.79
24 Contact Hours (FT) 256.60 895.78
30 Contact Hours (FT) 316.07 964.33
Tuition Increases and Amount Refunded from the AOTC
What Have We Done Regarding Controlling/Cutting Costs?
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Expenditure Reductions1) Energy Conservation Project
- Utility costs averaged 8.2% in 2003, Now they are 3.1%
2) Hold on vacant positions• Average savings of $750K per year
3) Change in timing of custodial shift• Savings of approximately $170K per year
4) Eliminating and restructuring food service• Was losing approximately $100K per year• Now generating $48K per year in revenues
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Expenditure Reductions5) Utility Reduction Analyst Project
• Resulted in $720K savings between 2004-2010 on Telecommunications/IT, Water, and Waste
6) 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
7) Course Section Efficiency• Maximizing section seat count before adding new
sections
8) Discretionary budget cuts• Average savings of $400K per year
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Expenditure Reductions9) Reduction of ORP (optional retirement plan) costs
• Average annual savings of $400K10) Combining Deans position
• Fine Arts and Social Science combined saving $168K per year12) Outsourcing custodial and grounds work at sites
• Savings of approx. $350K per year13) Health Insurance changes to coverage and plans
• Savings $550K14) New print shop lease
• Savings of $200,000 per year15) New Auditors
• Savings of $60,580 over five years
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Compensation as a Percentage of the General Fund Budget
74.00%
74.50%
75.00%
75.50%
76.00%
76.50%
77.00%
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%.
A Comparisonto
7 Other MichiganPeer Community Colleges
Based on 2010 –2011 ACS Data
MCC is 3rd Lowest in Millage Rate, and has the Largest Property Tax Decline
1.79 1.80 1.99 2.04 2.41 2.483.00 3.41
-3.76
-8.64
-10.98
-1.64
-3.14 -8.64 -8.64
-5.33
-12.00
-10.00
-8.00
-6.00
-4.00
-2.00
0.00
2.00
4.00
6.00G
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Prior Year Comparison of Millage Rates/Property Tax Declines with
State Grouping
MCC is 3rd Lowest in Millage Rate, and has the Largest Property Tax Decline
1.79 1.80 1.99 2.042.41 2.48
3.003.41
-2.39
-6.39 -6.76
-1.42
-0.65-6.39 -6.39
-2.85
-8.00
-6.00
-4.00
-2.00
0.00
2.00
4.00
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Current Year Comparison of Millage Rates/Property Tax Declines with
State Grouping
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0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
Current Year Comparison of State Aid
010,000,00020,000,00030,000,00040,000,00050,000,00060,000,00070,000,000
Current Year Comparison of State of Michigan Peer Group Property Tax
Revenue
MCC is 4th lowest in Total Revenue
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
Current Year Comparison of State Peer Group Total Revenue
Tuition & Fees: Local ComparisonCollege Yearly Tuition & Fees
Mott CC 3,644 Saginaw Valley University 8,134 Eastern Michigan University 8,637University of Michigan - Flint 9,182 Oakland University 9,938 Baker College - Flint 10,080 Ferris State University 10,440 Central Michigan University 10,950 University of Michigan – Ann Arbor 12,634Michigan State University 12,821Davenport University 15,150 ITT Technical of Flint 31,272Kettering University 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 most affordable college/university in our
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Key Assumptions – RevenueTuition and fee revenue increases at 3.9% each yearProperty tax revenue decreases for 1 year with flat and slight increases (1.5-2.5%) thereafter0.6410 Mill Voted Operating Millage is renewed for 10 years starting with FY08-09State appropriations increase at 3% for two years and 2% increases thereafterOther revenues increase by 2% each yearTotal revenue increases by avg. of 2.8%
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Key Assumptions - ExpensesSalaries and wages increase by an average of 3.35% Fringe benefits increases at a historical average rate of 4.5% each yearOther expenses increase by avg. of 3% each yearTotal expenses increase by avg. of 3.7% each year
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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 solutionsShort-term savings and flexibility continues to be keyLong-term strategy of managing total compensation costs
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7 Year Forecast at June 2012
Forecasts:>>>>>>>>>>>>>>>>>>>
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
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Revenues
Amended
Budget
2011-2012
Initial
Budget
2012-2013 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Tuition and Fees 39.0 40.6 42.2 43.9 45.6 47.4 49.2 51.1
Property Taxes 18.9 17.7 17.1 17.1 17.4 17.6 17.9 18.4
State Appropriations 14.4 15.0 15.5 15.9 16.3 16.6 16.9 17.2
All Others 3.7 3.5 3.6 3.7 3.7 3.8 3.9 4.0
Total Revenue 76.0 76.8 78.4 80.6 83.0 85.4 87.9 90.7
Revenue I ncrease (Decrease): 1.0% 2.1% 2.8% 2.9% 2.9% 3.0% 3.2%
Expenditures
Salaries 39.5 40.6 41.8 43.4 45.1 46.8 48.6 50.4
Fringe Benefi ts 17.6 17.0 17.8 18.6 19.4 20.3 21.2 22.2
All Others 19.7 19.2 20.4 20.9 21.4 21.9 22.4 23.0
Total Expenditures 76.8 76.8 80.0 82.9 85.9 89.0 92.2 95.6
Expenditure I ncrease (Decrease): -0.1% 4.1% 3.6% 3.6% 3.6% 3.6% 3.6%
Surplus/(Deficit): -0.80 0.01 (1.6) (2.3) (2.9) (3.6) (4.3) (4.9)
Fund Balance 6.7 6.7 5.1 2.8 (0.1) (3.7) (8.0) (12.9)
COMMENTS/QUESTIONS?
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