Board of Trustees
Committee of the Whole Meeting
June 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
REVENUES
Overall downward amendment to revenue is $137,000;
(-0.18%) change from February 2015 amendment
Tuition
and Fees
$150 thousand due to
lower than anticipated
enrollment & contact hour
decrease
Grants
and
Other
$13 thousand due to
slightly higher activity
than expected
Final FY14-15 General Fund Budget
EXPENDITURES
Amended downward by $233,000; (-0.31%)
Salary &
Fringe
Benefits
$170,529 due to course
section management and
release of open position
pool
Nonsalary
related
expenses
Savings in contracted services,
materials & supplies, and bad
debt expense
Transfers
$146 thousand net,
increase of $150,000 to
capital outlay and a
reduction of $3,500 in
designated scholarships.
Final FY14-15 General Fund Budget
13-14 ACTUAL
SUMMARY
Revenues
$
Expenditures
Excess (Deficit) Revenues Over
Expenditures
$
Budgeted Increase in Net Assets
14-15 AMEND #1 14-15 AMEND #2
74,945,931 $
75,699,657 $
75,562,182
75,239,218
75,538,814
75,305,519
(293,287) $
160,843 $
256,663
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
8.36%
8.54%
Net Asset Balance Percent*
* Target = 5% - 10% of expenditure budget
8.69%
Final FY14-15 General Fund Budget
NET 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
8
Funding Sources
State Aid
2015 -2016
Tuition
Debt
Property
Taxes
Operating
THEN and NOW
1999-2000
Tuition
32%
2014-2015
Tuition
49%
Taxes
26%
State
Aid
37%
Other
5%
State Funding
$15,344,107
State
Aid
21%
Other
5%
State Funding
$15,813,494
Taxes
24%
Projected Property Tax Funding
FYE 2010 through FYE 2016
Millions
($19.4 Million lost since 2009-2010)
$24
$22
$20
$18
$16
$23.3
$20.2
$18.9
$17.7
$17.2
$17.2
$17.7
$14
$12
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
Percentage of Property Tax and State Aid of
Total Funding
70%
65%
60%
63%
55%
60%
62%
60%
59% 58%
57% 56% 56%
50%
54%
51%
45%
47%
40%
44% 45% 45% 44%
35%
6/2015
6/2014
6/2013
6/2012
6/2011
6/2010
6/2009
6/2008
6/2007
6/2006
6/2005
6/2004
6/2003
6/2002
6/2001
6/2000
30%
Rise in Costs
Millions
Total Revenue
$80
$70
$60
$72
$71
$77
$76
$71
$61
$73
$77
$75
Fixed/Variable Cost
$75
$74
$72
$73
$65
$50
$40
$30
$20
$10
$0
2008
MCC
2009
2010
2011
2012
2013
2014
13
% Budget to Cover Fixed/Variable Costs
100.0%
97.8%
98.0%
98.2%
2013
2014
95.1%
96.0%
94.0%
92.5%
92.0%
89.8%
90.0%
88.0%
98.3%
86.3%
86.0%
84.0%
82.0%
80.0%
2008
MCC
2009
2010
2011
2012
14
Salaries/Benefits as % of Budget
Salaries/Benefits
Salaries/Benefits/Temps/OT/Contracted…
+2% +4% +6% +8% +8% +7% +7%
67% 70%
70%
71%
73%
75%
76%
2008 2009 2010 2011 2012 2013 2014
MCC
69%
74%
76%
79%
81%
82%
83%
2008 2009 2010 2011 2012 2013 2014
15
Tuition & Financial Aid
Federal Aid
$28,206,000 ,
71%
Other Aid
Cash Paying
Total aid comprises 77% of
MCC’s total tuition revenue
$9,107,000
23%
$2,570,000
6%
Millions
Pell Awards
$35
$30
$25
$20
$15
$10
$5
$0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Academic Year
Pell Award & Cost of Tuition
MOTT COMMUNITY
COLLEGE IN-DISTRICT
(PUBLISHED FOR 14-15)
EASTERN MICHIGAN UNIVERSITY
Pell Awarded (14-15)
$5,730
$5,730
Tuitions & Fees
$4,402
$8,244
$1,000
$1,000
$328
- $3,514
(30 contact hours)
Books & Supplies
Difference
Student receives
remaining balance
Student needs unmet
Pell Distribution – 2014/2015
Approximately 6,500 Students
AWARDED
EDUCATIONAL
TUITION & FEES
EDUCATIONAL
BOOKS & SUPPLY
CHARGES
RETURNED TO STUDENTS
$ 20,033,668
$ 16,346,346
$ 2,179,537
$ 1,507,786
2015/1 to 2015/4 - Preliminary
REMAINING AWARD
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 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.”
Millions
Deferred Maintenance w/o ITS (72)
$90.0
$80.0
Total
Unfunded Deferred
Bond
$83
$70.0
$60.0
$50.0
$40.0
$43
$30.0
$20.0
$10.0
$6.7
$0.0
2015
2016
2017
2018
2019
2020
2021
2022
*Does not include maintenance issues that will accumulate annually
MCC
22
Reserve Savings Levels Mandated by
Board Policy
$5,594,642
Capital Reserve
(72 & 78)
1 - 3%
+
$725,000
Rainy Day (02)
1%
+
$7,250,000
General Fund (01)
5 – 10%
= $13,569,642
$93,244,035
$72,500,000
$10,191,435
MCC
Depreciated Assets
06/30/2014
Expenditures
06/30/15
06/30/2014
Actual Balance
23
Projected Reserve Balances
June 30, 2014
June 30, 2015
June 30, 2016
June 30, 2017
Actual
Projected
Projected
Projected
$6,287,873 GF
$250,000 GF
$250,000 GF
$250,000 GF
$750,000 Rainy
Day
$0 Rainy Day
$0 Rainy Day
$0 Rainy Day
$3,226,911
Capital Reserve
($232,998)
Capital Reserve1
$100,000
Capital Reserve
$500,000
Capital Reserve
Balance
$10,264,784
Balance
$10,281,786
($232,998)
Capital Reserve1
($232,998)
Capital Reserve1
Balance
$10,398,788
Balance
$11,015,790
1Lapeer
Installment Purchase Payment
24
Michigan Community College Fund Balances (Peer Group)
PEER GROUP
General (01)
Delta
$ 6,768,400
Grand Rapids
$ 11,121,515
Henry Ford (2013) $ 11,855,466
Kalamazoo Valley $ 13,002,709
Mott
$ 6,287,873
Schoolcraft
$ 11,855,466
Wastenaw
$ 16,241,960
Total
$77,133,389
Fund Balances
Plant (72 & 78)
$
25,118,731
$
8,593,822
$
20,661,699
$
32,009,908
$
5,994,151
$
20,661,699
$
7,464,108
$ 120,504,118
Overall State Average - All CC's
1Total
MCC
Fund Balance %
1
Total
$ 49,434,549
$ 29,936,555
$ 39,951,101
$ 49,730,317
$ 13,558,250
$ 39,967,151
$ 24,017,933
$ 246,595,856
General (01) Total1
10.87%
79.37%
10.65%
28.68%
16.85%
56.79%
25.13%
96.12%
8.52%
18.37%
16.81%
56.67%
18.03%
26.66%
14.74%
47.13%
22.21%
35.00%
includes General Fund, Auxiliary Fund, Designated Funds and Plant Funds
25
350,000
Contact Hours
20,000
Unduplicated Head Count
18,000
300,000
Contact Hours
16,000
250,000
16%
-4%
14,000
-2%
12,000
-15%
200,000
-6%
10,000
-10%
150,000
-7%
projected
8,000
6,000
100,000
Unduplicated Head Count
Enrollment Trends 2008 – 2016
4,000
50,000
2,000
0
2010
MCC
2011
2012
2013
2014
2015
2016
26
THE IMMEDIATE STRATEGIC PLAN
Recruiting &
Branding/Marketing
MCC
Dual Enrollment
EC Strategy
27
Relevant Board Policies
3100 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
7-2
7-3
7-4
Focus on controllable
revenues and costs to
sustain our current
reputation and
facilities and provide
funding for strategic
priorities
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
Implement a
comprehensive
strategy to address
the long-term deficit
which enables us to
continue to provide
affordable high
quality education
Seek and cultivate
alternative resources
to supplement and/or
increase existing
revenue streams and
funding sources
Current Year Budget Priorities
Planned 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
$
Add to General Fund Fund Balance
$ 250,000
100,000
Tuition & Fee Recommendation
Per:
Contact
Hour
Per:
Semester
2015 CY RATE
2016 CY RATE
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
$ 126.30
$130.34
$ 4.04
Student Services Fee
INCREASE
Tuition & Fees: Local Comparison
College
Yearly Tuition
& Fees (14-15)
Mott Community College
$ 4,402
Eastern Michigan University
$ 8,244
Saginaw Valley University
$ 8,253
Baker College – Flint
$ 8,460
University of Michigan – Flint
$ 9,720
Oakland University
$ 10,613
Ferris State University
$ 11,190
Central Michigan University
$ 11,550
University of Michigan – Ann Arbor
$ 13,158
Michigan State University
$ 13,200
Davenport University – Grand Rapids
$ 14,472
Kettering 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
Tuition
and Fees
($1.2) million in tuition &
fees; enrollment decline
Property
Taxes &
State
Aid
$225,000 property taxes
and $148,000 for State Aid
Grants &
Other
Decrease in Grants &
Other mostly due to a
decrease in transfers in;
$51,000 increase in
Ballenger Trust
Proposed FY15-16 General Fund Budget
EXPENDITURES – KEY ASSUMPTIONS
Salaries
& Fringes
($453,000) No across the
board increases, minimal
increase in health
insurance (hard cap), and
blended MPSERS rate
Contracted
Services,
Materials &
Supplies, &
Equipment
($680,475) in contracted
services; ($84,000) in
materials and ($76,000) for
equipment
Other
Expenses
Increase of $490,000 with
the majority of the increase
in transfers to Maintenance
& Replacement and capital
reserves
Initial FY15-16 General Fund Budget
14-15 AMEND #2
Revenues
$
Expenditures
Excess (Deficit) Revenues Over Expenditures
$
75,562,182 $
74,602,968
75,305,519
74,352,968
256,663 $
(250,000)
Budgeted Increase in Net Assets
INITIAL 15-16
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*
* Target = 5% - 10% of expenditure budget
8.69%
9.34%
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)
Based on 2013 – 2014 ACS Data
Washtenaw
Grand Rapids
Mott
Delta
Schoolcraft
Kalamazoo Valley
$50
$45
$40
$35
$30
$25
$20
$15
$10
$5
$-
Henry Ford
Millions
Current Year Comparison of State of
Michigan Peer Group Property Tax Revenue
Henry Ford
Grand Rapids
Wayne County
Mott
Delta
Washtenaw
Kalamazoo Valley
Schoolcraft
Millions
Current Year Comparison of State Aid
$25
$20
$15
$10
$5
$-
Board of Trustees
Committee of the Whole Meeting
June 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