board of trustees committee of the whole meeting june 22, 2015 budget resolutions

MOTT COMMUNITY COLLEGEBoard of Trustees

Committee of the Whole MeetingJune 22, 2015

Budget Resolutions

For Consideration and Vote

Final Amended 2014-2015 Budget

Initial 2015-2016 Budget

Millage Authorization (Operating, Debt)

Tuition and Fee Recommendation beginning Winter 2016

FINAL FY14-15 AMENDED BUDGET:

GENERAL FUND

Final FY14-15 General Fund Budget REVENUESOverall downward amendment to revenue is $137,000; (-0.18%) change from February 2015 amendment

Tuition and Fees Grants

and Other

$150 thousand due to lower than anticipated

enrollment & contact hour decrease

$13 thousand due to slightly higher activity

than expected

Final FY14-15 General Fund BudgetEXPENDITURESAmended downward by $233,000; (-0.31%)

Savings in contracted services, materials & supplies, and bad

debt expense

$170,529 due to course section management and release of open position

pool

$146 thousand net, increase of $150,000 to

capital outlay and a reduction of $3,500 in

designated scholarships.

Non-salary

related expenses Transfers

Salary & Fringe

Benefits

Final FY14-15 General Fund Budget SUMMARY 13-14 ACTUAL 14-15 AMEND

#114-15 AMEND

#2Revenues $ 74,945,931 $ 75,699,657 $ 75,562,182

Expenditures 75,239,218 75,538,814 75,305,519

Excess (Deficit) Revenues Over Expenditures $ (293,287)

$ 160,843

$ 256,663

Budgeted Increase in Net Assets 0.00 0.00 (250,000)

Final Surplus $ 0.00 $ 0.00 $ 6,663

Net Assets– Beginning $ 6,581,160 $ 6,287,877 $ 6,287,877

Net Assets – Ending $ 6,287,873 $ 6,448,720 $ 6,544,540

Net Asset Balance Percent* 8.36% 8.54% 8.69%* Target = 5% - 10% of expenditure budget

Final FY14-15 General Fund BudgetNET RESULTS OF AMENDMENT:

6/30/2015 projected to end with $256,663 increase in Net Assets

NET ASSETS: $95,820 higher than the February Amended Budget

MCC

MCC RECENT FINANCIAL/OPERATING TRENDS

8

Funding Sources2015 -2016State Aid

Tuition

Property Taxes

Debt Operating

THEN and NOW

Tuition32%

Taxes26%

State Aid37%

Other6%

1999-2000

Tuition49%

Taxes24%

State Aid21%

Other5%

2014-2015

State Funding$15,344,107

State Funding$15,813,494

Projected Property Tax Funding FYE 2010 through FYE 2016

($19.4 Million lost since 2009-2010)

2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 $12,000,000

$14,000,000

$16,000,000

$18,000,000

$20,000,000

$22,000,000

$24,000,000

$23,266,144.

0

$20,168,704.0

$18,940,451.

0 $17,652,500.

0

$17,228,840.

0

$17,228,840.

0

$17,663,093.

0

$3.1 M $1.3 M $1.3 M$500K

Percentage of Property Tax and State Aid of Total Funding

6/20

00

6/20

01

6/20

02

6/20

03

6/20

04

6/20

05

6/20

06

6/20

07

6/20

08

6/20

09

6/20

10

6/20

11

6/20

12

6/20

13

6/20

14

6/20

15

30%

35%

40%

45%

50%

55%

60%

65%

70%

63%60%

62% 60%59% 58% 57% 56% 56%

54%51%

47%44% 45% 45% 44%

Rise in Costs

2008 2009 2010 2011 2012 2013 2014$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000$70,832,466$72,489,551

$76,470,893$76,710,281$76,601,289$73,601,067$74,763,342

$61,093,002$65,088,368

$70,704,988$72,951,477$74,877,760$72,349,849$73,380,220

Total Revenue

MCC 13

% Budget to Cover Fixed/Variable Costs

2008 2009 2010 2011 2012 2013 201480.0%

82.0%

84.0%

86.0%

88.0%

90.0%

92.0%

94.0%

96.0%

98.0%

100.0%

86.3%

89.8%

92.5%

95.1%

97.8% 98.3% 98.2%

MCC 14

Salaries/Benefits as % of Budget

2008 2009 2010 2011 2012 2013 2014

67% 70% 70% 71% 73% 75% 76%

Salaries/Bene...

2008 2009 2010 2011 2012 2013 2014

69% 74% 76% 79% 81% 82% 83%

Salaries/Benefits/Temps/OT/Contra...

+4% +6% +8% +8% +7% +7%+2%

MCC 15

Tuition & Financial Aid

2820600071%

25700006%

910700023%

Federal AidOther AidCash Paying

Total aid comprises 77% of MCC’s total tuition revenue

Pell Awards

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

Academic Year

Pell Award & Cost of TuitionMOTT COMMUNITY

COLLEGE IN-DISTRICT

(PUBLISHED FOR 14-15)EASTERN MICHIGAN

UNIVERSITY Pell Awarded (14-15) $5,730 $5,730

Tuitions & Fees (30 contact hours)

$4,402 $8,244

Books & Supplies $1,000 $1,000

Difference $328 - $3,514

Student receives remaining balance

Student needs unmet

Pell Distribution – 2014/2015

AWARDED

EDUCATIONAL TUITION &

FEES

EDUCATIONAL BOOKS & SUPPLY

CHARGES

REMAINING AWARD RETURNED TO

STUDENTS$ 20,033,668 $ 16,346,346 $ 2,179,537 $ 1,507,786

2015/1 to 2015/4 - Preliminary

Approximately 6,500 Students

Deferred Maintenance

Planned maintenance not performed when scheduled

Usually lack of funding – liability to college Leads to earlier asset replacement due to

premature end of life

Link to Mission and Strategic PlansMCC’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

2015 2016 2017 2018 2019 2020 2021 2022$0.0

$10,000,000.0

$20,000,000.0

$30,000,000.0

$40,000,000.0

$50,000,000.0

$60,000,000.0

$70,000,000.0

$80,000,000.0

$90,000,000.0

83400000

$6,666,666.7

$43,400,000

Total Unfunded Deferred Bond

Deferred Maintenance w/o ITS (72)

22*Does not include maintenance issues that will accumulate annually

Reserve Savings Levels Mandated by Board Policy

MCC 23

Depreciated Assets 06/30/2014

Expenditures 06/30/15

$93,244,035

$72,500,000

$7,250,000General Fund

(01)5 – 10%

$725,000Rainy Day (02)

1%

$5,594,642Capital Reserve

(72 & 78)1 - 3% +

+= $13,569,642

$10,191,43506/30/2014

Actual Balance

Projected Reserve Balances

24

June 30, 2014Actual

$6,287,873 GF

$750,000 Rainy Day

$3,226,911Capital Reserve

Balance $10,264,7841Lapeer Installment Purchase Payment

MCC

Michigan Community College Fund Balances (Peer Group)

25

PEER GROUP

General (01) Plant (72 & 78) Total1 General (01) Total1

Delta 6,768,400$ 25,118,731$ 49,434,549$ 10.87% 79.37%Grand Rapids 11,121,515$ 8,593,822$ 29,936,555$ 10.65% 28.68%Henry Ford (2013) 11,855,466$ 20,661,699$ 39,951,101$ 16.85% 56.79%Kalamazoo Valley 13,002,709$ 32,009,908$ 49,730,317$ 25.13% 96.12%Mott 6,287,873$ 5,994,151$ 13,558,250$ 8.52% 18.37%Schoolcraft 11,855,466$ 20,661,699$ 39,967,151$ 16.81% 56.67%Wastenaw 16,241,960$ 7,464,108$ 24,017,933$ 18.03% 26.66%Total 77,133,389$ 120,504,118$ 246,595,856$ 14.74% 47.13%

Overall State Average - All CC's 22.21% 35.00%

Fund Balances Fund Balance %

1Total includes General Fund, Auxiliary Fund, Designated Funds and Plant Funds

Enrollment Trends 2008 – 2016

2010 2011 2012 2013 2014 2015 20160

50,000

100,000

150,000

200,000

250,000

300,000

350,000

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000 Contact Hours

16% -2%

-15%

-6%-10%

-7%projected

-4%

Und

uplic

ate

d H

ead C

ount

Conta

ct H

ou

rs

MCC 26

MCC

THE IMMEDIATE STRATEGIC PLAN

27

Recruiting & Branding/Mar

keting

Dual Enrollment

EC Strategy

Proposed Fiscal Year 2015-2016 Budget

Relevant Board Policies3100 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

Long Term 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

Current Year Budget PrioritiesPlanned Decrease in Hiring $ (452,000)

Reduction in Contracted Services $ (680,475)

Reduction in Federal Work Study $ (270,000)

Reduction in Bad Debts $ (215,000)

Reduction in Internal Food $ ( 25,000)

Transfer to Maintenance and Replacement $ 230,000

Transfer to Capital Reserves $ 100,000 Add to General Fund Fund Balance $ 250,000

Tuition & Fee Recommendation2015 CY RATE

2016 CY RATE

INCREASE

Per: Contact Hour

In-District Rate $ 126.30 $ 130.34 $ 4.04

Out of District Rate $ 183.48 $ 183.48 $ 0.00

Out of State Rate $ 261.40 $ 261.40 $ 0.00

Institutional Technology Fee $ 7.24 $ 7.47 $ 0.23

Student Administrative Fee $ 8.76 $ 9.04 $ 0.28

Per: Semester

Student Services Fee $ 126.30 $130.34 $ 4.04

Tuition & Fees: Local ComparisonCollege

Yearly Tuition & Fees (14-15)

Mott Community College $ 4,402Eastern Michigan University $ 8,244Saginaw Valley University $ 8,253Baker College – Flint $ 8,460University of Michigan – Flint $ 9,720Oakland University $ 10,613Ferris State University $ 11,190Central Michigan University $ 11,550University of Michigan – Ann Arbor $ 13,158Michigan State University $ 13,200Davenport University – Grand Rapids $ 14,472Kettering University $ 36,980

MCC’s annual cost is approximately one half of the next lowest cost college/university in our area

Cost is based on rates published from the Peterson’s Guide at www.petersons.com as of 6/11/2015.

Proposed FY15-16 General Fund Budget

REVENUES – KEY ASSUMPTIONS

Grants & OtherProperty

Taxes & State Aid

$225,000 property taxes and $148,000 for State Aid

($1.2) million in tuition & fees; enrollment decline

Decrease in Grants & Other mostly due to a

decrease in transfers in; $51,000 increase in

Ballenger Trust

Tuition and Fees

Proposed FY15-16 General Fund BudgetEXPENDITURES – KEY ASSUMPTIONS

Increase of $490,000 with the majority of the increase in transfers to Maintenance & Replacement and capital

reserves

($453,000) No across the board increases, minimal

increase in health insurance (hard cap), and

blended MPSERS rate

Other Expenses

Salaries & Fringes

Contracted Services,

Materials & Supplies, & Equipment

($680,475) in contracted services; ($84,000) in

materials and ($76,000) for equipment

Initial FY15-16 General Fund Budget

14-15 AMEND #2 INITIAL 15-16

Revenues $ 75,562,182 $ 74,602,968

Expenditures 75,305,519 74,352,968

Excess (Deficit) Revenues Over Expenditures $ 256,663 $ 250,000

Budgeted Increase in Net Assets (250,000) (250,000)

Final Surplus $ 6,663 $ 0.00

Fund Balance – Beginning $ 6,287,877 $ 6,694,540

Fund Balance – Ending $ 6,544,540 $ 6,944,540

Fund Balance Percent* 8.69% 9.34%

* Target = 5% - 10% of expenditure budget

Proposed “Other Funds” FY15-16 Budgets

Designated Fund $2.5 Million Revenue Budget Scholarships, Student Enrichment, Copy Machines,

Paid Parking, Designated Technology Fee

Auxiliary Enterprise Fund $913,000 Budget $587,500 Net “Profit” Supplements General Fund Catering, Vending, Bookstore, Computer Lab Printing,

Lapeer Campus Auxiliary

Proposed “Other Funds” FY15-16 Budgets

Debt Retirement Fund Millage rate remains at 0.87 mill to meet debt

obligations

Capital Funds repair, upgrade of buildings, equipment, technology & vehicles Instructional Technology Fee = $1.47 Million per year $995,000 per year planned transfer from General Fund

(minimum required annual expenses plus reserves)

A Comparison to Seven Other Michigan Peer Community CollegesBased on 2013 – 2014 ACS Data

Current Year Comparison of State of Michigan Peer Group Property Tax Revenue

Hen

ry F

ord

Kala

maz

oo V

alle

y

Scho

olcr

aft

Del

ta

Mott

Gra

nd R

apid

s

Was

hten

aw

$- $5,000,000

$10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 $40,000,000 $45,000,000 $50,000,000

Current Year Comparison of State Aid

Scho

olcr

aft

Kala

maz

oo V

alle

y

Was

hten

aw

Del

ta

Mott

Way

ne C

ount

y

Gra

nd R

apid

s

Hen

ry F

ord

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

MOTT COMMUNITY COLLEGEBoard of Trustees

Committee of the Whole MeetingJune 22, 2015

Questions or Comments?

Larry Gawthrop, CFO (810) 762-0525

larry.gawthrop@mcc.edu

Details Provided with Board Resolutions 1.39 and 1.40