Mott Community College
Special Committee of The Whole
May 18, 2011
College Finances
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
• A balanced approach 2
PRIOR YEAR BUDGET IMPACT 3
Prior year Impact in Dollars
$5,873,359
4
Tuition Keeps Up with Lost Funding/Increase in
Non-controllable costs for prior year
$39.42
$127.76
5
Prior Year Budget Balancing Steps
6
Prior Year Budget Cuts
• Decreased Hiring (Open Position Pool) $ 325,000
• Cut funding to Reserves
$ 620,000
• Less Spending on Maintenance
and Replacement (72 fund)
$1,250,000
• Cut Contingency $ 250,000
Total current year cuts
$2,445,000
Set‐aside cuts from last year
$1,400,000
Total budgetary expenditure cuts $3,845,000
7
Prior Year Budget Cuts (continued)
Total Budgetary Expenditure Cuts
(from previous slide)
$3,845,000
Current Year Shortfall
($5,900,000)
Shortfall Remaining
($2,055,000)
65% of current year shortfall is made up through budget cuts.
8
FUNDING SOURCES
(2011-2012)
State Aid
Property Taxes
-Operating
-Debt
Tuition
9
Trends in Funding Sources & Enrollment
10
2011‐12 FUNDING PROJECTIONS
with a 15% Decrease in State Aid
11
THEN and NOW
State Aid Funding
$15,344,107
State Aid Funding
$15,121,880
12
THEN and NOW
Projected 2011-2012 with -15%State aid
State Aid Funding
$15,344,107
State Aid Funding
$12,853,598
13
Trends in Funding Sources & Enrollment, Fiscal Year Equated Students (FYES)
14
State and Local Funding Does Not Keep Up With Enrollment 15
Projected Property Tax Funding
FYE 2010 through FYE 2016
$2.6 Million Decrease or $8.27 per contact hour
$24
$22
Millions
$20
$18
$1.5 Million Decrease or $4.95 per contact hour
$23.5
$972 Thousand Decrease or $3.33
per contact hour
$20.9
$19.5
$18.5
$18.8
$19.4
$20.0
$16
$14
$12
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
16
Percentage of Property Tax and State Aid of Total Funding
70%
60%
63%
60%
62%
60%
59% 58%
57% 56% 56%
50%
54%
51%
47%
06/30/11
06/30/10
06/30/09
06/30/08
06/30/07
06/30/06
06/30/05
06/30/04
06/30/03
06/30/02
06/30/01
06/30/00
40%
17
Percentage of Property Tax and State Aid of Total Funding projected for 2011‐2012 with ‐15% State aid
70%
63%
60%
62%
60%
59% 58%
57% 56% 56%
50%
54%
51%
47%
06/30/11
06/30/10
06/30/09
06/30/08
06/30/07
06/30/06
06/30/05
06/30/04
06/30/03
06/30/02
06/30/01
06/30/00
40%
45%
06/30/12
60%
18
What’s Happening with Property Taxes?
(Operating)
$32.2M
$20.0M
Total lost operating property tax funding over 7 year period is
$60.2 million. The average per year is $8.6 million.
19
What If Tuition Covered State Aid Losses?
Add in Property tax loss = $218.08
$143.70
$155.00
$135.00
$115.46
$99.61 $99.88
$115.00
$129.65
$120.92
$128.65
140.32
$95.00
$75.00
$55.00
$72.50
$61.34
$61.15 $62.85
$69.00 $70.55
Actual
$82.05 $84.70 $86.52
$79.50
$75.80
$93.51
Hypothetical
20
What’s Happening with Property Taxes?
(Bonds)
$10.4M
$7.0M
Total lost bond tax funding over 7 year period is $15.8 million.
The average per year is $2.3 million.
21
Bonded Debt Payments vs Tax Collections at .69 Mills
22
Bond Funds
1. County and City Taxable Values will decline by 7% for 2011‐2012
2. The Financial Impact (Shortfall) to the Bond Funds will be $ 850,000 in 11/12.
3. We are legally required to levy a millage rate that will be sufficient to collect enough dollars to make the current year required payments ‐OR‐
Have enough funds available from other sources to cover any shortfall from a lower millage rate.
4. Commitment made to voters in 2004 to keep millage at .69 through 2011. (GF contribution $1.4 million last 23
year)
What Have We Done Regarding Controlling/Cutting Costs?
24
Past Expenditure Reductions
1) Energy Conservation Project
‐ Utility costs averaged 8.2% in 2003, Now they are 2.4%
• Savings $520K
2) Hold on vacant positions
• Average savings of $800K per year
3) Change in timing of custodial shift
• Savings of approximately $170K per year
4) Eliminating and restructuring food service
• Was losing approximately $100K per year
• Now generating $48K per year in revenues
25
Past Expenditure Reductions
5) Utility Reduction Analyst Project
•
Resulted in $720K savings between 2004‐2010 on Telecommunications/IT, Water, and Waste
6) Employee Contract Bargaining
•
•
Employees agreed to pay freezes with incremental increases over 9 years at 1.35%
Industry average is 2.8%
–
Savings of $460K per year
7) Course Section Efficiency
•
Maximizing section seat count before adding new sections
8) Discretionary budget cuts
•
Average savings of $400K per year
26
Past Expenditure Reductions
9) Reduction of ORP (optional retirement plan) costs
•
Average annual savings of $400K
10) Combining Deans position
•
Fine Arts and Social Science combined saving $168K per year
12) Outsourcing custodial and grounds work at sites
•
Savings of approx. $350K per year
13) Changes to health insurance coverage and plans •
Savings $500K
14) New print shop lease
• Savings of $200,000 per year
27
A Comparison
to 7 Other Michigan
Peer Community Colleges
Based on 2009 –2010 ACS Data
Comparison of State of Michigan Peer Group
Revenue Percentages
Based on 2009 - 2010 ACS Data
50%
46%
31%
32%
35%
2%
6%
3%
12%
15%
4%
13%
47%
30%
19%
3%
3%
14%
4%
4%
10%
22%
23%
30%
16%
19%
40%
20%
37%
37%
44%
33%
50%
30%
50%
60%
54%
61%
70%
0%
Delta
Grand
Rapids
State Aid
Henry Ford Kalamazoo
Valley
Property Tax
Mott
Schoolcraft Washtenaw
Tuition & Fees
All Other
Wayne
County
Prior Year Comparison of Millage
Rates/Property Tax Declines with
State Grouping
6.00
4.00
2.00
1.79
1.80
1.99
2.04
2.41
2.48
3.00
3.41
-12.00
-8.64
-3.14
-8.64
-8.64
Washtenaw
Henry Ford
-8.00
-10.00
Delta
Mott
-3.76
Wayne County
-6.00
-1.64
Kalamazoo Valley
-4.00
Schoolcraft
-2.00
Grand Rapids
0.00
-5.33
-10.98
MCC is 3rd Lowest in Millage Rate, and has the Largest Property Tax Decline
Current Year Comparison of State Aid
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
31
Current Year Comparison of State of
Michigan Peer Group Property Tax
Revenue
80,000,000
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
MCC is 3rd Lowest in Property Tax Revenue
Current Year Comparison of State Peer Group
Total Revenue
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
0
MCC is 4th lowest in Total Revenue
Tuition & Fees: Local Comparison
College
Mott CC Saginaw Valley University
Eastern Michigan University
Oakland University
Baker College ‐ Flint
Ferris State University University of Michigan ‐ Flint
Central Michigan University
Michigan State University
Davenport University
University of Michigan ‐ Ann Arbor
ITT Technical of Flint Kettering University
Yearly Tuition & Fees
3,329 7,308 8,377
9,285 9,840 9,930 10,097 10,380 11,722
11,814
13,461 25,064
29,116 Cost as based on in district/state rates from the College’s web sites
MCC’s annual cost is approximately 46% of that of the next
34
most affordable college/university in our area.
Tuition & Fees:
Community College Comparison
Yearly Tuition & Fees
College
Mott CC (In‐District)
Wayne County CC
Oakland CC
Macomb CC
Schoolcraft CC
Delta CC
Washtenaw CC
Lansing CC
Henry Ford CC
St. Clair CC
$3,229
$3,310
$3,457
$3,760
$3,910
$3,977
$4,140
$4,300
$4,402
$5,663
Costs based on published “out of district” rates for other
Community Colleges for 30 Credit/Contact hours
35
Comparison of MI Community Colleges and Universities
from 2005/06 to 2009/10
From 3/27/11 Free Press
36
CURRENT YEAR BUDGET IMPACT 37
FYE 2012 Impact in Dollars
$8,128,658
38
Tuition Keeps Up with Lost Funding/Increase in
Non-controllable costs for FYE 2012
$56.73
$155.41
39
COMPARISON PRIOR YEAR/CURRENT YEAR
2011
2012
40
Reserve Requirements
In millions
Still need $183K
Still need $950K
Still need $36K
Adequately funded
41
FEDERAL FINANCIAL ASSISTANCE
PELL GRANTS 42
Millions
Pell Awards
30 25 Increased Five-Fold in Ten Years
20 15 10 5 ‐
2001
2002
2003
2004
2005
2006
2007
Academic Year
2008
2009
2010
2011
Pell Award & Cost of Tuition
Mott Community College
In‐District
(Published 10/11)
Saginaw Valley
State University
In‐State
(Published 10/11)
Delta CC
Out of District Rate
Pell Awarded
$5,550
$5,550
$5,550
Tuition & Fees
$3,229
$7,308
$3,977
Books & Supplies
$1,000
$1,000
$1,000
Difference
$1,321
‐$2,758
$ 573
(30 contact hours)
Student Receives
Remaining
Balance
Student Needs
Unmet
Student Receives
Remaining
Balance
Pell Distribution – 09/10
Sample of Approx. 8,000
Students
Awarded
$24,787,898
Educational
Non‐
Educational Books & Supplies Educational
Tuition & Fees
Charges
Govt. Refund
$14,787,184
$2,896,345
$7,104,367
STATE INFLUENCES 46
PERCENTAGES CAN BE MISLEADING
Mott Community Saginaw Valley State University of Michigan ‐ College
University
Flint
In‐State
In‐State
In‐District
Current Tuition (30 contact hours)
$2,960
$6,870
$9,692
47
PERCENTAGES CAN BE MISLEADING
Mott Community College
In‐District
Current Tuition (30 contact hours)
5% increase
$2,960
Contact Hour Tuition Change
Change
$5
$148
Saginaw Valley State University of Michigan ‐ University
Flint
In‐State
In‐State
$6,870
Contact Hour Tuition Change Change
$11
$344
$9,692
Contact Hour Tuition Change
Change
$16
$485
48
PERCENTAGES CAN BE MISLEADING
Mott Community College
In‐District
Current Tuition (30 contact hours)
5% increase
7% increase
$2,960
Contact Hour Tuition Change
Change
$5
$148
$7
$207
Saginaw Valley State University of Michigan ‐ University
Flint
In‐State
In‐State
$6,870
Contact Hour Tuition Change Change
$11
$344
$16
$481
$9,692
Contact Hour Tuition Change
Change
$16
$485
$23
$678
49
The Inequality of any Percentage Increase
The impact of a 7% tuition increase for MCC compared with local 4 year Universities
50
Enrollment vs Appropriations
In percents
FY 06 – FY11
51
COMMENTS/QUESTIONS?
52