FY 2015-2016
Budget
MUSKEGON COMMUNITY COLLEGE
FISCAL YEAR 2015-2016 BUDGET
Introduction
The mission of Muskegon Community College (MCC) to be a “center for lifelong learning which provides persons with
the opportunity to attain their educational goals by offering programs that respond to individual, community, and global
needs” continues to be the College’s primary objective. The ability to provide desired educational programs must be
continuously evaluated in conjunction with economic factors that affect the College’s funding sources and the cost to
provide those services. The condition of the national, state and local economy impacts the revenues that the College
receives to operate with such as federal financial aid (Pell grants and student loans), state aid and property tax revenues.
In FY2010-2011 Muskegon Community College’s contact hour enrollment peaked at 132,221 contact hours. During this
time period there were significant federal grant dollars available for unemployed workers to be able to attend college and
learn new skills. Those funds have declined since that time, which has contributed toward a decline in MCC’s enrollment.
Another factor affecting enrollment has been the improving economy with more people going back to work and therefore
taking fewer classes. However during the summer of FY 2014-2015, enrollment came in better than predicted. Pre
enrollment for FY 2015-2016 looks strong and we are predicting a 1% enrollment growth for next year’s budget.
In FY2009-2010, the College’s property tax revenues were at their highest level of $10.2 million with the subsequent
years in decline. This year we predict an increase of 1.78% or $158,059, but we have still to reach the pre-recession
numbers.
State Aid revenues had remained constant from 2008-2011 then declined slightly in FY2011-2012 and have since started
back on an upward trend. Fortunately the voters of Muskegon County signified by their approval of a capital millage
request that they were willing to make an investment in MCC’s aging and outdated infrastructure. With facility
improvements and expansion, it is the belief that more students will be attracted to MCC and make it their choice for
higher education. However, the capital millage only supports our infrastructural needs. To control and effectively manage
the College’s expenses, a moderate tuition rate increase is proposed. This moderate increase will ensure the College
operates efficiently and continues to offer our students a high-quality education at the lowest feasible cost. The FY20152016 Proposed Budget takes into consideration all of the economic challenges that will allow the College to continue to
achieve its mission of meeting the community’s educational needs as efficiently and effectively as possible.
FY2015-2016 Proposed Budget
The Proposed FY2015-2016 budget is shown on the last page. This budget is presented on an All Funds basis using
natural class categories for expenses (i.e. salaries, fringe benefits, supplies, repairs etc.). In addition, the presentation
separates operating revenues such as tuition and fees and grants from non-operating revenues such as state aid and
property taxes and includes depreciation expense in a separate column. This format complies with a full accrual basis of
accounting and follows the presentation of our annual audit report.
The College is striving to ensure that spending does not exceed available funding resources. Strategies include identifying
efficiencies, working with vendors to find cost savings and pursuing other energy savings options. This budget also includes
the revenues and expenses related to the new capital millage which are presented separately but are included in the All
Funds totals. The FY2015-2016 budget as presented shows a $ 6,928,156 restricted surplus on an All Funds basis. This
surplus is generated from the excess revenues in the capital millage budget over the interest and bond issuance expenses
related to the bonds issued for those new construction projects.
Revenues
Total operating and non-operating revenues for FY2015-2016 budget are projected to be $37,292,716 (including Pell) .
State Aid
For the FY2015-2016 budget, the state aid will assumes approximately a 1.3% increase in appropriation to $9,020,700.
This is an increase of $119,700 over the current year appropriation of $8,901,000. The graph below illustrates the
historical trend of this funding source.
State Aid
(in 000’s)
$10,000
$8,000
$8,369
$8,519
$8,519
$8,519
$8,257
$8,687
$8,595
$8,901
$9,020
$6,000
Property Taxes
During 2014-2015 the College will levy 2.2037 mills of ad valorem property taxes on property located in Muskegon
County for its operating millage. The total taxable value for Muskegon County according the Muskegon County
Equalization report is increasing from $4,257,442,624 to 4,329,837,793. After four straight years of declining revenue
from this funding source as depicted in the following graph, finally property values are beginning to rebound. There are
signs of new housing construction in the county as well as increasing residential sales. The FY2015-2016 property tax
revenue budget is projected to be $9,033,059 for the College’s operating millage. The College will levy an additional .34
mills for the new capital millage. The capital millage will generate an additional $1,322,182 in property tax revenues.
Property Taxes
(Operating Millage Only)
(in 000’s)
$12,000
$10,000
$8,000
$6,000
$9,277
$9,697
$9,963
$10,188
$9,809
$9,227
$9,098
$8,983
$8,958
$9,033
Tuition and Fees
As previously mentioned, tuition and fees have become an increasing portion of total revenues over the last decade. In
the proposed FY2015-2016 budget, this funding source represents approximately $16,510,161. An increase in the contact
hour tuition rate beginning with the fall semester of 2015 is proposed as follows:
In-district
Out-of -district
Out-of-state
Current Rate
$96.00
$178.00
$244.00
Proposed Rate
$99.00
$184.00
$256.00
This increase would generate approximately $435,024 in additional revenue for FY2015-2016.
The FY2015-2016 budget assumes that the registration fee will remain at $35.00 per student per semester and that the
technology fee will remain at $20.00 per contact hour. However, this budget includes a recommendation to include a
$5.00 per contact hour infrastructure fee. This fee will allow the College to enhance its services and quality of instruction
while keeping the College infrastructure at an acceptable level, and, at the same time, providing for the maintenance and
future support of new areas of the college. High School and Career Technology sponsors will be exempt from this fee.
In addition, various course fee increases are also being proposed to offset the rising costs of consumable supplies and
other expenses necessary to operate. These increases in the infrastructure fee and course fees are expected to generate
approximately $420,310 and $20,000 respectively in additional revenue for FY2015-2016.
The graph below illustrates the historical trend of tuition and fees since FY2006-2007.
Enrollment for FY2015-2016 is budgeted to increase 1% from the current year estimated actual to 11,430 students.
Tuition and Fees
$18,000
$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$9,857
$10,755
$11,605
$13,499
$14,531 $14,531 $14,583
$14,893
$15,436
$16,510
Headcount
14,000
13,333
13,150
12,000
12,142
12,647
12,247
11,548
11,435
10,000
$1,000
$900
$800
$700
$600
$500
$400
$300
$200
$100
$0
Tuition
Fees
11,317
11,430
In-District 2015 Tuition Rates
Cohort College Comparison
$117.00
$125
$100
$75
$90.90
NW MI
CC
$94.00
Lake MI
CC
$99.00
Muskegon
$99.50
Kellogg
CC
$102.00
Monroe
CC
$102.00
St. Clair
Jackson
CC
* Tuition rate represents the current summer (or proposed) 2015 rates
In-District 2015 Tuition Rates
Surrounding College Comparison
$110
$100
$90
$80
$70
.
$91.00
$94.00
$95.00
$99.00
$100.00
$104.00
$108.00
Contact Hours
150,000
130,787
132,221
122,766
125,000
110,068
115,106
118,089
110,666
108,452 109,536
100,000
Grant Revenues
This funding source includes federal, state and local grants that MCC has been awarded and uses for specific restricted
purposes. This category includes, Pell, Upward Bound, Perkins, TAA NOVA CAD/CNC, Michigan Incentive Tuition
Program, and the Michigan Economic Development Grant.to name a few.
All Other Revenues
The remaining revenues consist of commissions generated from book store sales, rent, investment income, and
miscellaneous departmental revenue. These revenues total $700,573.
Expenditures
Total FY2015-2016 operating expenditures are budgeted at $45,186,316. Expenditures consist of categories such as
wages, fringe benefits, contractual services, supplies, utilities, repairs and maintenance, rent, equipment, travel and
depreciation. Wage and fringe benefit costs comprise the largest portion of total expenditures at $26,592,529. Faculty
and staff are the “materials” needed to create our “product” of college educated students. Annual wages increase in
accordance with contractual agreements include wage and step increases. Retirement and medical costs, even with the
recent healthcare and retirement reform changes, continue to rise each year and have a significant impact on the ability to
balance the budget.
Salaries and Wages
The budget for salaries and wages is based on projected staffing levels and current contractual agreements. The FY20152016 budget includes the assumptions based on contract negotiations with our Faculty Association and our Clerical unit.
Fringe Benefits
The employer contribution to the state retirement system is an average of 25.96 % of wages in FY2015-2016. Medical,
dental and vision costs continue to rise and are projected to increase another 12 % next year. Other benefits such as life
insurance, unemployment and workers compensation insurance are projected to remain stable. Total fringe benefit costs
for the operating budget for FY2015-2016 are projected to be $8,566,401.
Capital Expenditures
Proposed expenditures for computer and equipment purchases and building renovations are included in the appendix
section of this document. Those items that meet the capitalization criteria will be depreciated over their useful life. (see
attached spreadsheet)
Budget Balancing Strategies
Given the challenges facing colleges today, along with increasing operating costs and fringe benefits, several budget
balancing strategies were incorporated into the FY2015-2016 budget. The highlights are listed below:
Implement a $3.00/$6.00/$12.00 tuition rate increase for in-district, out-of-district and out-of-state rates
respectively generates $435,024 in revenue
Implement a $5/contact hour facility fee generates $420,310 in revenue
Implement various course fee increases generates $20,000 in revenue
Inclusion of a new Medical Assistant program generates $28,122 in net revenues
Inclusion of new CNA program-generates $28,728
•
•
•
•
•
Each year the College must report to the Higher Learning Commission certain financial information that discloses the
financial condition of the college. Ratios are computed based on our reserves, net operating revenues, return on net
assets and debt in addition to an overall composite ratio. We have computed these ratios for the FY2013-2014 and
FY2014-2015
CFI Zone
Above
CFI
1.1 to 10
Outcome
No Review
FY2010-11
2.7
FY2011-12
1.3
FY2012-13
2.1
In
0 to 1.0
-
-
-
Below
-4.0 to -0.1
Financial Panel
Review if >= 2
consecutive
yrs
Financial Panel
Review in any
1 yr
-
-
-
FY2013-14
2.10
FY2014-15
1.5
-
The Higher Learning Commission and bond rating agencies take into consideration an organization’s plans to maintain
long-term financial stability. The budget balancing strategies that are included in the FY2015-2016 budget provides an
opportunity for the College to remain a financially sustainable institution into the future.
Conclusion
The FY2015-2016 All Funds budget is presented on the following page for your consideration. This budget represents a
coordination of efforts by all departments that have looked for ways to reduce costs and achieve efficiencies and continue
to allow the College to provide educational opportunities to its students.
2015-2016 Budget Assumptions
This year’s budget assumes…
•
a one percent enrollment increase.
•
filling three of the four vacant faculty positions from the 2014-2015 retirements ( one
•
the Dean and Mentor of the Muskegon Early College will be assumed by MCC.
position is vacant because it was moved from being outsourced by Ellucian).
•
one half of the Dean and Mentor’s salary and fringes will be reimbursed by the MAISD.
•
filling two replacement custodial unit positions.
•
hiring one utility position for the downtown center.
•
the vacant Manager of the Testing Center position will be filled.
•
the hiring of a Medical Assistant/Health lab parapro.
•
the Medical Assistant Program will be implemented in the winter semester.
•
a tuition increase of 3.00 per contact for in district (3.13%) 96/99, a 6.00 dollar increase
for out of district (3.37%) 178/184, and 12.00 per contact hour for out of state (4.93%)
244/256.
•
a five dollar per contact hour facility fee will be charged to all students except students
•
Blue Cross will increase by 12%.
sponsored by High Schools and Career Tech Centers.
•
faculty and clerical negotiations amounts are figured into the budget.
•
includes operating costs for the new science wing and the downtown centers.
•
state aid will increase 1.3% ($119,700).
•
property tax is projected to go up 1.78% ($158,059).
•
a 2% across the board salary increase for exempt APS and a step increase for hourly APS.
•
a 2.73 percent average salary increase for the custodial unit per the 2011 contract.
MUSKEGON COMMUNITY COLLEGE
2015 - 2016 CAPITAL
Control #
Dept #
Description of Equipment
31
10-20-73060-2823
5 year SSL Certificates
19
10-20-73060-2821
10GB Fiber Conditioning Cables
G01
10-20-73060-2821
13
10-20-73060-2836
Cisco 7942 Phones
P20
10-20-73060-2821
Physics Laptops
39
10-20-73060-2821
Geology Lab laptop replacements plus roll
around storage /charging cart.
Permanent Technology and Projector Life
Cycle Replacement
RT01
10-20-73060-2834
Polycom Setup (estimated 4/22/2015)
32
10-20-73060-2834
Replacement of MCCVMS07, 08, 09, and 10
Devices with mobility and ability to add
SC06
10-20-73060-2821
apps and software that are required as part
of the lecture/labs, then to be able to
wirelessly broadcast to the instructor or
classroom at $1,350 each.
X01
10-20-73060-2821
Added
$12,500 per classroom 11
SAN
Purpose / Comments
Increasing the duration of SSL certificates will
reduce overhead of IT Department for
implementation and will save 26%.
These cables will allow for bandwidth increases
to 10GB to the edge network closets with
newer Cisco 3750X switches in them.
15 Laptops and one roll around
storage/charging cart for laptops. Will be
stored in locked room between classes.
Life Cycle replacement of 7942 two line
phones.
Student use technology, won't be surface pro
3's.
The replacement of projectors, document
cameras, and related equipment for classroom
instruction
Dan Knue, Respiratory Therapy
Life Cycle Replacement of Physical Host
Servers.
Student use technology, won't be surface pro
3's.
Physical Plant
76010
Physical Plant
$
6,000.00
$
14,000.00
$
15,000.00
$
16,000.00
$
26,400.00
$
35,000.00
$
45,000.00
$
63,000.00
$
150,000.00
$
225,000.00
$
66,000.00
$
12,500.00
$
12,000.00
passenger, and is considered a safety issue by
$
36,000.00
Mixed Equipment & Remodel?
Part of switch replacement requirements to
get current network speeds.
Eliminated $270,000 so added back, added
$1,000 for cart.
Only replacing failing and needed phones, but
should expect higher failure rates.
Lab computers needed for Physics Instruction
Projectors are getting too old. Resolution is
too low, cost of bulbs for older model
projectors is high. Removed 6 from
remodeling additions.
Needed for distance education to Traverse
City.
Keeps server technology current and avoids
overloading next year's replacements.
Discussion about laptop vs. desktop.
The current SAN was purchased 5 years ago
(Colleague ERP, Blackboard, Email, etc.) that
rate. Prolonged use creates risk of outage and
technology suitable to teaching and learning
centralized storage and capacity for all services and individual drives are failing at an increased
snow blower attachment, and hydraulic system
upgrade for the Tool Cat.
22
1,700.00
The Storage Area Network (SAN) provides
bucket option, 68 inch angle broom, 60 inch
data loss.
This unit is to service the main campus and the
current older tool and attachments will be
stationed at the Downtown Center.
Replace rusted out dock lift for the old
Reduce maintenance costs for current lift and
the point that they could soon fail.
bookstore, kitchen, and custodial supplies.
receiving docks. Old lift arms are rusted to
OIT Est. Cost
$
stabilize systems after a cert change
Classrooms need to be outfitted with the
construction and renovation areas
Toolcat 5600 G-Series power unit, 62 inch
76010
Reduce labor and discount. Takes too long to
Classroom technology for Current new
run on equipment in the MCC Data Center.
19
OIT Comments
insure that we have a functional lift for the
Install an Oil Cooler System on the HEC
24
76010
Physical Plant
elevator. The elevator oil tank temp runs high
during heavy use times. This could shorten the Extend the life of the elevator pump system.
life of shaft seals and the elevator pump
system.
2015 Ford Transit Wagon 3.7L Ti-VCT engine,
27
76010
Physical Plant
automatic, 12 passenger low roof height van to MCC's current fleet van is a 2004, 15
replace the current 15 passenger van in the
fleet inventory and add one additional van for
college staff and team use.
New
76010
Physical Plant
Kitchen Remodel
our insurance carrier.
Chairs in Fund 10
MCC classrooms
$
160,000.00
Application/CRM and Catalog Software
account for applications. Add catalog software $
200,000.00
TOTAL
Update student application software to better
to help improve student success.
$
20,000.00
$ 1,103,600.00
Muskegon Community College
Statement of Revenues and Expenses
FY 2015-16 All Funds Budget
Operating Revenues
Tuition And Fees
Federal Grants
Local Grants And Donations
State Grants
Sales, Services & Rentals
Other Income
Total Operating Revenue
Operating
16,510,161
869,886
5,050
942,500
588,925
448,845
19,365,367
Depreciation
Fitness
Center
One Time
Grants
8,700,000
-
-
Operating Expenses
Salaries And Wages
Fringe Benefits
Advertising, Legal, And Other Professional Services
Material, Supplies, Postage, Books, Program Cost
Dues, Professional Development, Travel
Utilities, Energy Cost, Rent, Insurance
Repair And Maint. Capital And Capital Under $5,000
Financial Aid And Scholarships
Bad Debt
Other Expenses
Depreciation
Total Operating Expenses
18,026,128
8,566,401
3,105,344
1,939,778
657,318
1,469,949
1,396,050
1,666,177
400,000
65,571
37,292,716
2,020,816
2,020,816
297,245
Operating Income/(Loss)
(17,927,349)
(2,020,816)
(297,245)
Non-Operating Revenues/(Expenses)
State Aid
Property Taxes
Interest Income
Interest Expense
Capitalized Interest
Pell Revenue
Pell Disbursement
Transfers (Net)
Gains And Loss
Total Non-Operating Revenues/(Expenses)
Net Income /(Loss)
9,050,700
9,109,059
43,190
(240,600)
7,000,000
(7,000,000)
(35,000)
17,927,349
-
2013 & 14
Bonds
8,700,000
142,319
24,926
130,000
-
69,600
(69,600)
(11,615,010)
41,250
8,700,000
615,817
9,050,700
10,431,241
43,190
(1,126,965)
180,000
7,000,000
(7,000,000)
(35,000)
18,543,166
546,217
6,928,156
1,322,182
(886,365)
180,000
(2,020,816)
(297,245)
8,700,000
16,510,161
869,886
5,050
9,642,500
588,925
448,845
28,065,367
18,168,447
8,591,327
3,261,594
1,941,878
657,318
1,511,199
1,396,050
1,666,177
400,000
65,571
2,020,816
39,680,377
26,250
2,100
-
All Funds
Total