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