Mott Community College
Employee Open Forum
May 9, 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
$6,000,000
Prior year Impact in Dollars
$464,851
$552,155
$5,000,000
$871,353
$4,000,000
$1,400,000
$3,000,000
$5,873,359
$2,000,000
$2,585,000
$1,000,000
$0
Lost Property Taxes
Debt Contribution
Health Insurance Increase
MPSERS Increase
Lost State Aid
4
Tuition Keeps Up with Lost Funding/Increase in
$130.00 Non-controllable costs for prior year
$3.11
$3.71
$125.00
$120.00
$5.85
$115.00
$9.40
$110.00
$39.42
$105.00
$127.76
$100.00
$17.35
$95.00
$90.00
$85.00
$80.00
$88.34
Current Tuition
Lost Property Taxes
Debt Contribution
Health Insurance Increase
MPSERS Increase
Lost State Aid
5
Prior Year
Budget Balancing Steps
6
Prior Year Budget Cuts
• Decreased Hiring (Open Position Pool)
• Cut funding to Reserves
• Less Spending on Maintenance
and Replacement (72 fund)
• Cut Contingency
Total current year cuts
Set-aside cuts from last year
Total budgetary expenditure cuts
$ 325,000
$ 620,000
$1,250,000
$ 250,000
$2,445,000
$1,400,000
$3,845,000
7
Prior Year Budget Cuts (continued)
Total Budgetary Expenditure Cuts
(from previous slide)
Current Year Shortfall
Shortfall Remaining
$3,845,000
($5,900,000)
($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
40,000
$33,500,000
35,000
Funding
$28,500,000
30,000
$23,500,000
25,000
$18,500,000
20,000
15,000
$13,500,000
10,000
$8,500,000
5,000
$3,500,000
0
State Aid
Property Taxes
Headcount
10
2011-12 FUNDING PROJECTIONS
with flat State Aid
$33,500,000
40,000
35,000
Funding
$28,500,000
30,000
$23,500,000
25,000
$18,500,000
20,000
15,000
$13,500,000
10,000
$8,500,000
5,000
$3,500,000
0
State Aid
Property Taxes
Headcount
11
2011-12 FUNDING PROJECTIONS
with 3.5% Decrease in State Aid
$33,500,000
40,000
35,000
Funding
$28,500,000
30,000
$23,500,000
25,000
$18,500,000
20,000
15,000
$13,500,000
10,000
$8,500,000
5,000
$3,500,000
0
State Aid
Property Taxes
Headcount
12
2011-12 FUNDING PROJECTIONS
with a 15% Decrease in State Aid
$33,500,000
40,000
35,000
Funding
$28,500,000
30,000
$23,500,000
25,000
$18,500,000
20,000
15,000
$13,500,000
10,000
$8,500,000
5,000
$3,500,000
0
State Aid
Property Taxes
Headcount
13
THEN and NOW
1999-2000
Tuition
48%
Taxes
26%
Tuition
32%
Other
6%
2010-2011
State
Aid
36%
State Aid Funding
$15,344,107
Other
4%
State
Aid
20%
Taxes
28%
State Aid Funding
$15,121,880
14
THEN and NOW
Projected 2011-2012 with flat State aid
2011-2012
1999-2000
Other
6%
Tuition
49%
Taxes
26%
Tuition
32%
State
Aid
36%
State Aid Funding
$15,344,107
Other
4%
State
Aid
21%
Taxes
26%
State Aid Funding
$15,121,880
15
THEN and NOW
Projected 2011-2012 with -3.5%State aid
2011-2012
1999-2000
Other
6%
Tuition
49%
Taxes
26%
Tuition
32%
State
Aid
36%
State Aid Funding
$15,344,107
Other
4%
State
Aid
20%
Taxes
27%
State Aid Funding
$14,592,614
16
THEN and NOW
Projected 2011-2012 with -15%State aid
2011-2012
1999-2000
Other
6%
Tuition
50%
Taxes
26%
Tuition
32%
State
Aid
36%
State Aid Funding
$15,344,107
Other
5%
State
Aid
18%
Taxes
27%
State Aid Funding
$12,853,598
17
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
18
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%
19
Percentage of Property Tax and State Aid of Total
Funding projected for 2011-2012 with flat State aid
70%
60%
63%
60%
62%
60%
59% 58%
57% 56% 56%
50%
54%
51%
47% 47%
06/30/12
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%
20
Percentage of Property Tax and State Aid of Total
Funding projected for 2011-2012 with -3.5% State aid
70%
60%
63%
60%
62%
60%
59% 58%
57% 56% 56%
50%
54%
51%
47% 47%
06/30/12
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%
21
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%
22
What’s Happening with Property Taxes?
(Operating)
Historical Average Increase
35,000,000
7 Year Forecast
$32.2M
32,500,000
30,000,000
27,500,000
25,000,000
22,500,000
$20.0M
20,000,000
17,500,000
15,000,000
Total lost operating property tax funding over 7 year period is
$60.2 million. The average per year is $8.6 million.
23
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
$84.70 $86.52
$82.05
$75.80 $79.50
$93.51
Hypothetical
24
What’s Happening with Property Taxes?
Historical Average Increase
11,000,000
(Bonds)
7 Year Forecast
$10.4M
10,000,000
9,000,000
8,000,000
7,000,000
$7.0M
6,000,000
Total lost bond tax funding over 7 year period is $15.8 million.
The average per year is $2.3 million.
25
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
-ORHave 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 year)
26
What Have We Done Regarding
Controlling/Cutting Costs?
27
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
28
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
29
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
30
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
34
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
37
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
38
Comparison of MI Community Colleges and Universities
from 2005/06 to 2009/10
35%
30%
30%
25%
20%
32%
31%
Community
College %
Change
22%
16%
16%
18%
15%
University
% Change
10%
6%
5%
2%
3%
0%
From 3/27/11 Free Press
39
CURRENT YEAR BUDGET IMPACT
40
$9,000,000
FYE 2012 Impact in Dollars
$8,000,000
$453,656
$675,000
$7,000,000
$750,000
$6,000,000
$850,000
$5,000,000
$900,000
$4,000,000
$1,500,000
$8,128,658
$3,000,000
$2,000,000
$3,000,000
$1,000,000
$0
Capital Funding Restoration
Health Insurance Increase
Contingency Restoration
Lost State Aid
Lost Property Taxes
Debt Contribution
MPSERS Increase
41
Tuition Keeps Up with Lost Funding/Increase in
$160 Non-controllable costs for FYE 2012
$155
$150
$145
$140
$135
$130
$125
$120
$115
$110
$105
$100
$95
$90
$85
$80
$3.17
$4.71
$3.11
$5.93
$6.28
$10.47
$56.73
$155.41
$20.94
$98.68
Current Tuition
Lost Property Taxes
Debt Contribution2
MPSERS Increase
Capital Funding Restoration
Health Insurance Increase
Contingency Restoration
Lost State Aid
42
COMPARISON PRIOR YEAR/CURRENT YEAR
2011
2012
$130.00
$125.00
$120.00
$3.11
$3.71
$5.85
$115.00
$110.00
$9.40
$105.00
$127.76
$100.00
$95.00
$17.35
$90.00
$85.00
$80.00
$39.42
$88.34
$160
$155
$150
$145
$140
$135
$130
$125
$120
$115
$110
$105
$100
$95
$90
$85
$80
$3.17
$4.71
$3.11
$5.93
$6.28
$56.73
$10.47
$155.41
$20.94
$98.68
43
Reserve Requirements
8
Still need $183K
7
Current
Reserve
In millions
6
5
4
Still need $950K
Still need $36K
Required
Reserve
3
2
Adequately funded
1
0
General Fund
(01)
Rainy Day (02)
Maint &
Replacement
(72)
Building & Site
(78)
44
FEDERAL FINANCIAL ASSISTANCE
PELL GRANTS
45
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
NonEducational
Books & Supplies Educational
Tuition & Fees
Charges
Govt. Refund
$14,787,184
$2,896,345
$7,104,367
STATE INFLUENCES
49
PERCENTAGES CAN BE MISLEADING
Mott Community
College
In-District
Current Tuition
(30 contact hours)
$2,960
Saginaw Valley State University of Michigan University
Flint
In-State
In-State
$6870
$9,692
50
PERCENTAGES CAN BE MISLEADING
Mott Community
College
In-District
Current Tuition
(30 contact hours)
5% increase
$2,960
Contact
Tuition
Hour
Change
Change
148
5
Saginaw Valley State University of Michigan University
Flint
In-State
In-State
$6870
Contact
Tuition
Hour
Change Change
344
11
$9,692
Contact
Tuition
Hour
Change
Change
485
16
51
PERCENTAGES CAN BE MISLEADING
Mott Community
College
In-District
Current Tuition
(30 contact hours)
5% increase
7% increase
$2,960
Contact
Tuition
Hour
Change
Change
148
5
207
7
Saginaw Valley State University of Michigan University
Flint
In-State
In-State
$6870
Contact
Tuition
Hour
Change Change
344
11
481
16
$9,692
Contact
Tuition
Hour
Change
Change
485
16
678
23
52
Enrollment vs Appropriations
FY 06 – FY11
35
35
30
Enrollment
In percents
25
20
Appropriations
15
10
3.4
5
5
4.8
-
0
-5
-10
(8.8)
-15
K-12 Schools
Universities
Community Colleges
53
COMMENTS/QUESTIONS?
54