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MOTT COMMUNITY COLLEGE

MOTT COMMUNITY COLLEGE . Budget Resolutions. Board of Trustees Committee of the Whole Meeting June 18, 2014. For Consideration and Vote. FINAL FY13-14 AMENDED BUDGET :. General Fund. Final FY13-14 General Fund Budget. Revenues

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MOTT COMMUNITY COLLEGE

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  1. MOTT COMMUNITY COLLEGE Budget Resolutions Board of TrusteesCommittee of the Whole MeetingJune 18, 2014

  2. For Consideration and Vote

  3. FINAL FY13-14 AMENDED BUDGET: General Fund

  4. Final FY13-14 General Fund Budget Revenues Overall upward amendment to revenue is $2.0 Million; 2.28% change from January 2014 amendment Tuition, Grants, Property Taxes Transfers In State Aid $350,000 Decrease from Reserves Up $400k $1.6 Million for the UAAL Rate Stabilization Payments

  5. Final FY13-14 General Fund Budget Expenditures Amended upward by $1.3 Million; 1.73% Salaries & Fringe Benefits Non-salary related expenses $1.6 Million for the UAAL Rate Stabilization Payments Savings in contracted services, materials & supplies, and utilities, increase in bad debt expense, equipment

  6. Final FY13-14 General Fund Budget * Target = 5% - 10% of expenditure budget

  7. 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

  8. Reserves as Required by Board Policy #3930

  9. Funding Sources State Aid 2014 -2015 Tuition Property Taxes Debt Operating

  10. THEN and NOW State Funding $15,344,107 State Funding $15,306,817

  11. What if Tuition Covered State Aid Losses?

  12. Projected Property Tax Funding FYE 2010 through FYE 2016 ($19.4 Million lost since 2009-2010) $3.1 M $1.3 M $1.3 M $500K

  13. Enrollment and State and Local Funding per Fiscal Year Equated Students (FYES)

  14. Percentage of Property Tax and State Aid of Total Funding

  15. A Comparison to Seven Other Michigan Peer Community Colleges Based on 2012 – 2013 ACS Data

  16. Current Year Comparison of Millage Rates / Property Tax Declines with State Grouping MCC is 3rd Highest Millage Rate, and has the Largest Property Tax Decline

  17. Current Year Comparison of State of Michigan Peer Group Property Tax Revenue 8 7 6 5 4 3 2 1

  18. Comparison of State of Michigan Peer Group Revenue Percentages Based on 2012 - 2013 ACS Data

  19. What Have We Done Regarding Controlling/Reducing Costs?

  20. Expenditure Reductions

  21. More Expenditure Reductions

  22. Even More Expenditure Reductions

  23. Federal Student Financial Aid & MCC

  24. Tuition & Financial Aid Total aid comprises 78% of MCC’s total tuition revenue

  25. Pell Awards

  26. Pell Award & Cost of Tuition Student receives remaining balance Student needs unmet

  27. Pell Distribution – 2013/2014 Approximately 7,282 Students 2014/1 to 2014/4 - Preliminary

  28. Available Financial Aid (Pell & American Opportunity Tax Credit)

  29. Tuition & Fee Recommendation

  30. Tuition & Fees: Local Comparison MCC’s annual cost is approximately 48% of that of the next most affordable college/university in our area Cost is based on rates published from the Peterson’s Guide at www.petersons.com as of 6/11/2014.

  31. Proposed Fiscal Year 2014-2015 Budget

  32. Relevant Board Policies

  33. Strategic Plan

  34. Proposed FY14-15 General Fund Budget Revenues – Key Assumptions Tuition & State Aid Property Taxes Grants & Other $1.5 million in tuition & fees; $430,000 in State Aid unchanged ($100,000) decrease in transfers in

  35. Proposed FY14-15 General Fund Budget Expenditures – key assumptions Salaries & Fringe Benefits Other Expenses No across the board increases, minimal increase in health insurance (hard cap), and blended MPSERS rate Additional bad debt expense

  36. Initial FY14-15 General Fund Budget * Target = 5% - 10% of expenditure budget

  37. 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

  38. 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)

  39. Capital Funding Regional Technology Center

  40. 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.”

  41. 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

  42. 7 Year Forecast

  43. 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%

  44. 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

  45. 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

  46. 7 Year Forecast at June 2014 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.

  47. MOTT COMMUNITY COLLEGE Questions or Comments? Larry Gawthrop, CFO (810) 762-0525 larry.gawthrop@mcc.edu Board of TrusteesCommittee of the Whole MeetingJune 18, 2014 Details Provided with Board Resolutions 1.39 and 1.40

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