COLLEGE OF DuPAGE DRAFT FOR DISCUSSION ONLY FY2016 Pro Forma Budget Scenario Discussion Document 1 Dra2 – For Discussion Only FY2016 Budget Scenario Introduction
•  This document reflects the potenDal impact of various assumpDons on the FY2016 Budget which was proposed in May 2015 ( May Budget ) •  This document is for discussion purpose only. When reviewing this document all risks and supporDng informaDon from the May Budget should be considered •  Historically, actual performance has exceeded budget primarily resulDng from conservaDve assumpDons or Dming of construcDon projects •  This analysis sensiDzes the May Budget to various assumpDons to understand the impact on revenue and expenditures in the OperaDng Funds. The May Budget was assumed to remain the same for all other funds 2 Dra2 – For Discussion Only Operating Funds Actual vs. Budget Performance •  Historically, actual performance has exceeded budget •  FY2014 actuals results were $36.5MM be\er than budget •  FY2015 results are expected to be approximately $23.6mm be\er than budget •  Key Drivers of historical favorable performance: •  Revenues were budgeted very conservaDvely •  Began to budget more realisDc amounts beginning in FY2015 •  Salaries were budgeted assuming all posiDons are filled for the full year •  Vacant posiDons result in about a $4mm variance, annually •  Medical benefit premium rate increases were budgeted at about 13%-­‐14% annually •  Actual rate increases have not been that high, •  Benefit budget begins to trend down beginning in FY2015 •  Expense conDngency of $3.5mm budgeted but not used •  Used for the first Dme in FY2015 The FY2016 Budget analysis focuses on these key areas 3 Operating Funds Budget v Actual Dra2 – For Discussion Only (in thousands) FY2014
Actual
FY2014
Budget
Fav /
(Unfav)
FY2015
Actual*
FY2015
Budget
Fav /
(Unfav)
Initial ("May")
FY2016
Budget
Revenues
Local Property Taxes
Tuition a nd Fees
State Government
All Other
$ 82,314
83,162
14,194
4,580
$ 82,315
80,903
5,022
3,557
$ (1)
2,259
9,172
1,023
$ 82,581
86,301
12,949
2,415
$ 83,504
84,603
9,078
4,806
$ (923)
1,698
3,871
(2,390)
$ 84,072
84,646
13,227
4,812
Total Revenues
184,250
171,797
12,453
184,246
181,991
2,255
186,757
Expenditures
Salaries
Benefits
Contractual Services
Materials & Supplies
Capital Outlay
Scholarships/Waivers
All Other
Contingency
97,174
15,965
9,209
6,016
3,659
10,464
8,345
-­‐
104,707
23,365
12,042
7,387
4,009
9,054
10,775
3,500
7,533
7,401
2,832
1,372
350
(1,409)
2,429
3,500
102,605
15,474
8,351
7,364
5,264
12,500
8,821
-­‐
107,487
22,273
13,425
8,100
4,309
11,645
10,544
3,500
4,882
6,799
5,074
736
(955)
(854)
1,723
3,500
110,997
19,873
12,816
9,799
5,248
12,773
13,206
-­‐
Total Expenditures
150,832
174,839
24,007
160,380
181,284
20,904
184,713
Net Transfers
626
590
37
144
(262) 406
(2,044)
Surplus / (Deficit)
$ 34,044
$ (2,453) $ 36,497
$ 24,010
$ 446
$ 0
$ 23,565
*FY2015 actuals, as of 7/28/15, unaudited 4 Dra2 – For Discussion Only Operating Funds Expenditure History Millions (by Program) $180 $161 $160 $141 $147 $151 $151 $78 $80 $79 $36 $37 $147 $138 $140 $120 $100 $84 $80 $77 $84 $80 $60 $46 $37 $40 $34 $21 $27 $20 $-­‐ $33 $34 $41 $31 $45 $32 $21 FY2009 FY2010 FY2011 InstrucDon/Academic Support FY2012 FY2013 General AdministraDon/InsDtuDonal FY2014 All Other^ FY2015* Total *FY2015 actuals, as of 7/28/15, unaudited ^All Other includes Student Services, Public Service, O&M of Plant, Scholarships/Grants/Waivers, and Transfers Out 5 Dra2 – For Discussion Only Key Revenue Sensitivity Assumptions for FY2016 Budget Pro Forma Scenario Model •  Decrease the 2015 OperaDng Tax Levy by 5% resulDng in a decrease in FY2016 OperaDng Property Tax Revenue of $2.955mm. FY2016
Impact of 5% Levy Decrease
Impact of 3% Levy Decrease
FY2017
$ (2,955) $ (4,161)
(2,119) (2,509)
•  Decrease in TuiDon and Fees Rate -­‐ $5 per credit hour effecDve Spring 2016 term •  Would result in a decrease in revenues of approximately $1.39mm in FY2016 Initial
Budget
Revenues
With a
$5 Rate
Decrease
Difference
FY2016 $ 84,646 $ 83,252 $ (1,394)
FY2017 $ 84,646 $ 81,789 $ (2,857) *
*reflects full year i mpact, no e nrollment change i n FY2017
6 Dra2 – For Discussion Only Key Expense Sensitivity Assumptions for FY2016 Budget Pro Forma Scenario Model •  $6.6mm Salary & Benefit savings esDmate when factoring in vacant posiDons and reducDon of approved new posiDons. •  Due mainly to vacant posiDons as well as much lower than budgeted benefits costs (premium rate increases were lower than budgeted). •  ReclassificaDon or eliminaDon of Capital Outlay requests – two projects which should be funded from ConstrucDon Fund rather than OperaDng Funds – $950,000. •  Review of IT Plan – decrease by $500,000 (contractual services) •  Eliminate transfers from OperaDng Funds to Auxiliary and Bond & Interest Funds of $1.815mm •  $1.5mm reducDon in Bad Debt Expense budget. •  Reduce project and other conDngencies by $600k. •  One-­‐Time Adjustments: •  Increased Legal/ConsulDng Fees by $2.855mm •  Added $4.0mm ConDngency 7 Dra2 – For Discussion Only Operating Funds FY2016 Pro Forma Budget Scenario (in thousands) Revenues
Loca l Property Ta xes (5% l evy d ecrea s e)
Student Tui ti on a nd F ees
$5 credi t h r d ecrea s e for S pri ng
Al l Other
Ma y
FY2016 B udget
Pro F orma
Pro F orma
Adjus tments FY2016 B udget
$ 84,072
84,646
$ (2,955) $ 81,117
18,039
(1,394) 83,252
-­‐
18,039
Total R evenues
186,757
(4,349) 182,408
Expendi tures
Sa l a ry & B enefi ts
Ins ti tuti ona l Lega l F ees
Conti ngency
Al l Other
130,870
545
-­‐
53,298
(6,600)
2,855
4,000
(3,550)
Total Expendi tures
184,713
(3,295) 181,418
Surpl us / (Defi ci t)
2,044
(1,054) 990
Net Tra ns fers Out
(2,044) 1,815
(229)
Net S urpl us / (Defi ci t)
$ 0
$ 761
$ 761
124,270
3,400
4,000
49,748
The May FY2016 Opera>ng Fund Balance surplus of $2.0mm before transfers is modified to a net surplus of $761k aEer taking into considera>on the pro forma adjustments 8 FY2016 Pro Forma Budget by Fund Dra2 – For Discussion Only (in thousands) Operating Funds
Education
O&M
Fund
Fund
Total
Construction
Fund
Bond & Interest Fund
Auxiliary
Fund
Restricted
Purposes
Fund
Working Cash
Fund
TOTAL
Revenues
Local Property Taxes
Tuition a nd Fees
State Government
All Other
$ 69,313
80,509
13,227
4,649
$ 11,804
2,743
-­‐
163
$ 81,117
83,252
13,227
4,812
$ -­‐
2,400
-­‐
160
$ 25,364
6,856
-­‐
1,057
$ -­‐
6,404
-­‐
6,586
$ -­‐
94
42,166
29,530
$ -­‐
-­‐
-­‐
37
$ 106,481
99,006
55,394
42,183
Total Revenues
167,698
14,709
182,408
2,560
33,277
12,990
71,790
37
303,063
Expenditures
Salaries
Benefits
Contractual Services
Materials & Supplies
Capital Outlay
Scholarships/Waivers
All Other
Contingency
103,902
15,778
12,072
8,980
2,961
12,773
5,670
4,000
3,495
1,095
2,999
819
1,338
-­‐
5,536
-­‐
107,397
16,873
15,071
9,799
4,298
12,773
11,206
4,000
-­‐
-­‐
950
-­‐
9,723
-­‐
7,820
-­‐
-­‐
-­‐
-­‐
-­‐
-­‐
-­‐
34,264
-­‐
5,168
1,568
2,207
1,795
444
-­‐
2,074
-­‐
2,755
37,785
223
308
143
30,902
467
-­‐
-­‐
-­‐
7
-­‐
-­‐
-­‐
-­‐
-­‐
115,320
56,226
18,458
11,901
14,608
43,675
55,832
4,000
Total Expenditures
166,135
15,282
181,417
18,493
34,264
13,256
72,582
7
320,020
Net Transfers
(1,302) 1,073
(229) -­‐ -­‐ (563) 792
Surplus / Deficit
261
500
761
(15,933) (987) (828) (0) 30
(16,957)
Beginning Fund Balance
156,593
27,533
184,126
23,597
15,013
9,732
322
8,360
241,150
Ending Fund Balance
$ 156,854
$ 28,033
$ 184,887
$ 7,664
$ 14,026
$ 8,904
$ 322
$ 8,390
$ 224,193
Less Restricted Fund Balance
Total Unrestricted Fund Balance
91,250
65,604
-­‐ 91,250
28,033 93,637
7,664 14,026 -­‐ 322 -­‐ 113,262
-­‐ -­‐ 8,904 -­‐ 8,390 110,931
Total Ending Fund Balance
$ 156,854
$ 28,033
$ 7,664
$ 184,887
$ 14,026
$ 8,904
$ 322
-­‐ -­‐
$ 8,390
$ 224,193
Using the current FY2015 Actual, this es>mates a total ending fund balance of ~$224 million and an unrestricted ending fund balance of ~$111 million 9