Mott Community College

Employee Open ForumMay 9, 2011

College Finances

2

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

_____________________________________________________________________

PRIOR YEAR BUDGET IMPACT

3

Prior year Impact in Dollars

Series1$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$2,585,000

$1,400,000

$871,353

$552,155

$464,851

Lost Property Taxes Debt ContributionHealth Insurance Increase MPSERS IncreaseLost State Aid 4

$5,873,359

Tuition Keeps Up with Lost Funding/Increase in Non-controllable costs for prior year

Series1$80.00

$85.00

$90.00

$95.00

$100.00

$105.00

$110.00

$115.00

$120.00

$125.00

$130.00

$88.34

$17.35

$9.40

$5.85

$3.71

Current Tuition Lost Property Taxes Debt Contribution

Health Insurance Increase MPSERS Increase Lost State Aid 5

$39.42

$127.76

Prior Year Budget Balancing Steps

6

Prior Year Budget Cuts• Decreased Hiring (Open Position Pool) $ 325,000• Cut funding to Reserves $ 620,000• Less Spending on Maintenance

and Replacement (72 fund) $1,250,000• Cut Contingency $ 250,000

Total current year cuts $2,445,000Set-aside cuts from last year $1,400,000Total budgetary expenditure cuts $3,845,000

7

Prior Year Budget Cuts (continued)

Total Budgetary Expenditure Cuts (from previous slide) $3,845,000

Current Year Shortfall ($5,900,000)

Shortfall Remaining ($2,055,000)

65% of current year shortfall is made up through budget cuts.

8

FUNDING SOURCES(2011-2012)

State Aid

Property Taxes-Operating

-Debt

Tuition9

Trends in Funding Sources & Enrollment

1999

-200

020

00-2

001

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

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

State Aid Property Taxes Headcount

Fund

ing

10

2011-12 FUNDING PROJECTIONS with flat State Aid

1999

-200

020

00-2

001

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

2011

-201

2

$3,500,000

$8,500,000

$13,500,000

$18,500,000

$23,500,000

$28,500,000

$33,500,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

State Aid Property Taxes Headcount

Fund

ing

11

2011-12 FUNDING PROJECTIONS with 3.5% Decrease in State Aid

1999

-200

020

00-2

001

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

2011

-201

2

$3,500,000

$8,500,000

$13,500,000

$18,500,000

$23,500,000

$28,500,000

$33,500,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

State Aid Property Taxes Headcount

Fund

ing

12

2011-12 FUNDING PROJECTIONS with a 15% Decrease in State Aid

1999

-200

020

00-2

001

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

2011

-201

2

$3,500,000

$8,500,000

$13,500,000

$18,500,000

$23,500,000

$28,500,000

$33,500,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

State Aid Property Taxes Headcount

Fund

ing

13

THEN and NOWTuition32%

Taxes

26%

State Aid36%

Other6%

1999-2000 Tu-ition

48%

Taxes28%State Aid

20%

Other

4%

2010-2011

14

State Aid Funding

$15,344,107State Aid Funding

$15,121,880

THEN and NOWProjected 2011-2012 with flat

State aidTuition32%

Taxes

26%

State Aid36%

Other6%

1999-2000 Tu-ition

49%

Taxes27%State Aid

21%

Other

4%

2011-2012

15

State Aid Funding

$15,344,107State Aid Funding

$15,121,880

THEN and NOWProjected 2011-2012 with -

3.5%State aidTuition32%

Taxes

26%

State Aid36%

Other6%

1999-2000Tu-ition

49%

Taxes27%State Aid

20%

Other

4%

2011-2012

16

State Aid Funding

$15,344,107State Aid Funding

$14,592,614

THEN and NOWProjected 2011-2012 with -

15%State aidTuition32%

Taxes

26%

State Aid36%

Other6%

1999-2000Tu-ition

50%

Taxes27%

State Aid18%

Other

4%

2011-2012

17

State Aid Funding

$15,344,107State Aid Funding

$12,853,598

Projected Property Tax Funding FYE 2010 through FYE 2016

$12

$14

$16

$18

$20

$22

$24

2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

$23.5

$20.9

$19.5$18.5

$18.8 $19.4$20.0

Million

s

18

$2.6 Million Decrease or $8.27 per contact hour

$1.5 Million Decrease or $4.95 per contact hour

$972 Thousand Decrease or $3.33 per contact hour

Percentage of Property Tax and State Aid of Total Funding

19

63%60%

62%60%

59% 58% 57% 56% 56%54%

51%

47%

40%

50%

60%

70%06

/30/

00

06/3

0/01

06/3

0/02

06/3

0/03

06/3

0/04

06/3

0/05

06/3

0/06

06/3

0/07

06/3

0/08

06/3

0/09

06/3

0/10

06/3

0/11

Percentage of Property Tax and State Aid of Total Funding projected for 2011-2012 with flat State aid

20

63%60%

62%60%

59% 58% 57% 56% 56%54%

51%

47% 47%

40%

50%

60%

70%06

/30/

00

06/3

0/01

06/3

0/02

06/3

0/03

06/3

0/04

06/3

0/05

06/3

0/06

06/3

0/07

06/3

0/08

06/3

0/09

06/3

0/10

06/3

0/11

06/3

0/12

Percentage of Property Tax and State Aid of Total Funding projected for 2011-2012 with -3.5% State aid

21

63%60%

62%60%

59% 58% 57% 56% 56%54%

51%

47% 47%

40%

50%

60%

70%06

/30/

00

06/3

0/01

06/3

0/02

06/3

0/03

06/3

0/04

06/3

0/05

06/3

0/06

06/3

0/07

06/3

0/08

06/3

0/09

06/3

0/10

06/3

0/11

06/3

0/12

Percentage of Property Tax and State Aid of Total Funding projected for 2011-2012 with -15% State aid

22

63%60%

62%60%

59% 58% 57% 56% 56%54%

51%

47%45%

40%

50%

60%

70%06

/30/

00

06/3

0/01

06/3

0/02

06/3

0/03

06/3

0/04

06/3

0/05

06/3

0/06

06/3

0/07

06/3

0/08

06/3

0/09

06/3

0/10

06/3

0/11

06/3

0/12

What’s Happening with Property Taxes?(Operating)

2009-2010

2010-2011

2011-2012

2012-2013

2013-2014

2014-2015

2015-2016

15,000,000

17,000,000

19,000,000

21,000,000

23,000,000

25,000,000

27,000,000

29,000,000

31,000,000

33,000,000

35,000,000 Historical Average Increase 7 Year Forecast

23

Total lost operating property tax funding over 7 year period is $60.2 million. The average per year is $8.6 million.

$32.2M

$20.0M

What If Tuition Covered State Aid Losses?

$61.15 $62.85$69.00 $70.55 $75.80 $79.50 $82.05 $84.70 $86.52

$93.51$61.34

$72.50

$99.61 $99.88$115.46

$120.92

$128.65

$129.65

140.32

$143.70

$55.00

$75.00

$95.00

$115.00

$135.00

$155.00

Actual Hypothetical

24

Add in Property tax loss = $218.08

What’s Happening with Property Taxes?(Bonds)

2009-2010

2010-2011

2011-2012

2012-2013

2013-2014

2014-2015

2015-2016

6,000,000

6,500,000

7,000,000

7,500,000

8,000,000

8,500,000

9,000,000

9,500,000

10,000,000

10,500,000

11,000,000

Historical Average Increase 7 Year Forecast

25

Total lost bond tax funding over 7 year period is $15.8 million. The average per year is $2.3 million.

$10.4M

$7.0M

Bond Funds1. County and City Taxable Values will decline by 7% for

2011-20122. The Financial Impact (Shortfall) to the Bond Funds will be

$ 850,000 in 11/12.3. We are legally required to levy a millage rate that will be

sufficient to collect enough dollars to make the current year required payments

-OR- Have enough funds available from other sources to cover any shortfall from a lower millage rate.

4. Commitment made to voters in 2004 to keep millage at .69 through 2011. (GF contribution $1.4 million last year) 26

What Have We Done Regarding Controlling/Cutting Costs?

27

Past Expenditure Reductions1) Energy Conservation Project

- Utility costs averaged 8.2% in 2003, Now they are 2.4%• Savings $520K

2) Hold on vacant positions• Average savings of $800K 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

28

Past 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

29

Past Expenditure Reductions9) Reduction of ORP (optional retirement plan) costs

• Average annual savings of $400K

10) Combining Deans position• Fine Arts and Social Science combined saving $168K per

year

12) Outsourcing custodial and grounds work at sites• Savings of approx. $350K per year

13) Changes to health insurance coverage and plans • Savings $500K

14) New print shop lease• Savings of $200,000 per year

30

A Comparisonto

7 Other MichiganPeer Community Colleges

Based on 2009 –2010 ACS Data

19%

16%

23%

22%

19%

15%

12%

13%

33%

30%

14%

37%

30% 35

%

50% 54

%

44%

50%

61%

37%

47%

46%

32%

31%

4% 4% 3% 3% 4% 3%

6%

2%

0%

10%

20%

30%

40%

50%

60%

70%

Delta Grand Rapids

Henry Ford Kalamazoo Valley

Mott Schoolcraft Washtenaw Wayne County

Comparison of State of Michigan Peer Group Revenue Percentages

Based on 2009 - 2010 ACS Data

State Aid Property Tax Tuition & Fees All Other

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

rand

Rap

ids

Scho

olcr

aft

Mott

Del

ta

Kala

maz

oo V

alle

y

Way

ne C

ount

y

Hen

ry F

ord

Was

hten

aw

Prior Year Comparison of Millage Rates/Property Tax Declines with

State Grouping

34

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

Current Year Comparison of State Aid

MCC is 3rd Lowest in Property Tax Revenue

010,000,00020,000,00030,000,00040,000,00050,000,00060,000,00070,000,00080,000,000

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 3,329 Saginaw Valley University 7,308 Eastern Michigan University 8,377Oakland University 9,285 Baker College - Flint 9,840 Ferris State University 9,930 University of Michigan - Flint 10,097 Central Michigan University 10,380 Michigan State University 11,722Davenport University 11,814University of Michigan - Ann Arbor 13,461 ITT Technical of Flint 25,064Kettering University 29,116

Cost as based on in district/state rates from the College’s web sites

MCC’s annual cost is approximately 46% of that of the next most affordable college/university in our

area.37

Tuition & Fees: Community College

ComparisonCollege Yearly Tuition & Fees

Mott CC (In-District) $3,229Wayne County CC $3,310Oakland CC $3,457Macomb CC $3,760Schoolcraft CC $3,910Delta CC $3,977Washtenaw CC $4,140Lansing CC $4,300Henry Ford CC $4,402St. Clair CC $5,663

Costs based on published “out of district” rates for other Community Colleges for 30

Credit/Contact hours

38

Comparison of MI Community Colleges and Universitiesfrom 2005/06 to 2009/10

Faculty Compensation

Administrator Compensation

In-district tu

ition Rate

Enrollment

State Funding-5%

0%

5%

10%

15%

20%

25%

30%

35%

16% 16%18%

31%

6%

22%

30%32%

2% 3%

Community College % Change

University % Change

39From 3/27/11 Free Press

CURRENT YEAR BUDGET IMPACT

40

FYE 2012 Impact in Dollars

Series1$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

$3,000,000

$1,500,000

$900,000

$850,000

$750,000

$675,000$453,656

Capital Funding Restoration Lost Property TaxesHealth Insurance Increase Debt ContributionContingency Restoration MPSERS IncreaseLost State Aid

41

$8,128,658

Tuition Keeps Up with Lost Funding/Increase in Non-controllable costs for FYE 2012

Series1$80$85$90$95

$100$105$110$115$120$125$130$135$140$145$150$155$160

$98.68

$20.94

$10.47

$6.28

$5.93

$4.71$3.17

Current Tuition Capital Funding RestorationLost Property Taxes Health Insurance IncreaseDebt Contribution2 Contingency RestorationMPSERS Increase Lost State Aid

42

$56.73

$155.41

COMPARISON PRIOR YEAR/CURRENT YEAR

43Series1$80$85$90$95

$100$105$110$115$120$125$130$135$140$145$150$155$160

$98.68

$20.94

$10.47

$6.28 $5.93

$4.71$3.17

$56.73

$155.41

Series1$80.00

$85.00

$90.00

$95.00

$100.00

$105.00

$110.00

$115.00

$120.00

$125.00

$130.00

$88.34

$17.35

$9.40

$5.85

$3.71

$39.42

$127.76

2011 2012

0

1

2

3

4

5

6

7

8

Current Reserve

Required Reserve

Reserve Requirements

44

In m

illio

ns

Still need $183K

Still need $950K Still need $36K

Adequately funded

FEDERAL FINANCIAL ASSISTANCEPELL GRANTS

45

-

5

10

15

20

25

30

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Mill

ions

Academic Year

Pell Awards

Increased Five-Fold in Ten Years

Pell Award & Cost of TuitionMott Community

CollegeIn-District

(Published 10/11)Saginaw ValleyState University

In-State

(Published 10/11)Delta CC

Out of District Rate

Pell Awarded $5,550 $5,550 $5,550

Tuition & Fees(30 contact hours)

$3,229 $7,308 $3,977

Books & Supplies $1,000 $1,000 $1,000

Difference $1,321 -$2,758 $ 573

Student Receives Remaining

Balance

Student Needs Unmet

Student Receives Remaining

Balance

Pell Distribution – 09/10

Awarded Educational Tuition & Fees

EducationalBooks & Supplies

Charges

Non-Educational

Govt. Refund

$24,787,898 $14,787,184 $2,896,345 $7,104,367

Sample of Approx. 8,000 Students

STATE INFLUENCES

49

PERCENTAGES CAN BE MISLEADING

50

Current Tuition (30 contact hours) $2,960 $6870 $9,692

Mott Community College

Saginaw Valley State University

University of Michigan - Flint

In-District In-State In-State

PERCENTAGES CAN BE MISLEADING

51

Current Tuition (30 contact hours)

Tuition Change

Contact Hour

ChangeTuition Change

Contact Hour

ChangeTuition Change

Contact Hour

Change5% increase 148 5 344 11 485 16

$2,960 $6870 $9,692

Mott Community College

Saginaw Valley State University

University of Michigan - Flint

In-District In-State In-State

PERCENTAGES CAN BE MISLEADING

52

Current Tuition (30 contact hours)

Tuition Change

Contact Hour

ChangeTuition Change

Contact Hour

ChangeTuition Change

Contact Hour

Change5% increase 148 5 344 11 485 16 7% increase 207 7 481 16 678 23

$2,960 $6870 $9,692

Mott Community College

Saginaw Valley State University

University of Michigan - Flint

In-District In-State In-State

K-12 Schools Universities Community Colleges-15

-10

-5

0

5

10

15

20

25

30

35

(8.8)

4.8

35

3.4 -

5

Enrollment

Appropriations

Enrollment vs AppropriationsFY 06 – FY11

53

In p

erce

nts

COMMENTS/QUESTIONS?

54