Mott Community College Board of Trustees Committee of the Whole Meeting

advertisement
Mott Community College
Board of Trustees
Committee of the Whole Meeting
June 23, 2008
BUDGET RESOLUTIONS
RELEVANT BOARD POLICIES:
™ 3100 Budget Adoption. “Budget revisions will be
brought forward for Board action as necessary, but
not less than twice per year in January and June.”
™ 3920,3930 Financial Stability, 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.”
2
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
3
FINAL FY07-08 AMENDED BUDGET:
General Fund
4
FINAL FY07-08 General Fund BUDGET
REVENUES:
•Tuition & Fees +$801 thousand, +3.2% adj. –credit-side
enrollment up for Winter and Spring 2008
•Property Taxes and State Aid
no change
Other Revenue
-$121 thousand (rental revenue and
indirect cost recovery revenue down slightly)
=Overall upward amendment to revenue is
+$.7 million
+.97% change from January 2008 amendment
5
FINAL FY07-08 General Fund BUDGET
EXPENDITURES:
• Amended upward by $700 thousand, .9% change:
•Salaries & Wages and Fringe Benefits --updated salary
projections and closer to actual figures on benefits
•Non-salary related expenses -- lower heating costs, release of
contracted services contingencies, offsetting adjustments between
categories
•Transfers -- additional contribution to Maintenance &
Replacement Fund to help 07-08
6
Transfers are comprised of….
„
Fund 02 Designated Scholarships
Grant Matching
Fund 78 Building & Site Reserve
Fund 02 Rainy Day
„
Fund 72 Maintenance & Replacement
„
Lapeer Site (Capital Outlay)
„
„
„
Total
$
423,297
5,500
250,000
200,000
4,955,000
65,000
$ 5,898,797
7
FINAL FY07-08 General Fund BUDGET
NET RESULTS OF AMENDMENT:
9 FUND BALANCE :
$46K or .71% better than
January Amended Budget
9 6/30/08 projected to end with $229,000 surplus, for
total of $6.5 million
8
FINAL FY07-08 General Fund BUDGET
Summary
Revenues
Expenditures
Excess Revenues Over
Expenditures
Fund Balance - Beginning
Fund Balance - Ending
Fund Balance Percent
$
06-07
07-08
07-08
Actual
Amend #1
Amend #2
64,191,247 $
70,455,169 $
71,135,526
63,952,477
70,271,468
70,906,155
$
238,770 $
183,701 $
$
6,050,801
6,289,571 $
9.83%
6,289,571
6,473,272 $
9.21%
229,371
6,289,571
6,518,942
9.19%
Target = 5% - 10% of Expenditure budget
9
Reserves as Required by Board
Policy #3930
„
General Operating (01) Reserve
„ Requires 5-10% of annual operating expenses.
„ 07-08 Amend Budget shows reserve of 9.2%
„
Maintenance & Replacement Fund (72)
„ Requires 1-3% of College depreciated assets or $3 M
„ 07-08 Amended Budget shows $1 M
„ Additional amount needed to fully fund $2 M
„
Building/Site Fund (78) 1-3% of depreciated assets
„ Requires 1-3% of College depreciated assets or $3 M
„ 07-08 Amended Budget shows $1.4 M
„ Additional amount needed to fully fund $1.6 M
10
PROPOSED FY08-09 BUDGET
11
PROPOSED FY08-09 BUDGET
No Change in Budget Principles, uncertainty still
remains.
1. Budget must support Strategic Plans
2. Minimize/Offset Impact on Students
3. Avoid Overall Reduction in Staffing
4. Maintain Fund Balance/Reserves
12
PROPOSED FY08-09 BUDGET
KEY ASSUMPTIONS - REVENUES
TUITION & FEES
•3.2% (inflation-level) rate increases on credit side
included in budget coupled with 2% enrollment
decrease netting a 1% overall increase in tuition and
fee revenue.
13
In
20
08
7
9
20
08
00
-2
00
7-
06
-2
t2
00
et
ge
dg
ud
Bu
lB
i ti
al
Fi
na
20
05
20
06
-2
0
3
04
00
-2
0
5-
04
03
02
-2
20
0
20
20
20
Tuition and Fees
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$-
14
PROPOSED FY08-09 BUDGET
KEY ASSUMPTIONS - REVENUES
PROPERTY TAXES
• Down $60 thousand from 07-08 due to
property tax value decreases—this trend
is expected to worsen.
• Millage Rate is not rolled back by
Headlee this year and stays at 1.9896
15
Property Taxes
$26,000,000
$24,000,000
$22,000,000
$20,000,000
$18,000,000
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
9
00
8
lB
itia
In
Fi
na
lB
ud
ud
ge
ge
t2
t2
00
00
72
82
00
07
-2
0
06
20
520
0
-2
0
04
20
20
06
05
4
00
03
-2
20
20
02
-2
0
03
$-
16
PROPOSED FY08-09 BUDGET
KEY ASSUMPTIONS - REVENUES
•STATE APPROPRIATIONS –
• 2.9% increase approved by House & Senate
•State still faces budget uncertainties for FY08-09
• MCC budget assumes 2.9% increase from
adjusted prior year appropriation or $15.1 million
•Mid-year budget adjustments possible
17
MCC State Appropriation Revenue
17,000,000
16,500,000
16,278,400
16,000,000
15,848,900
15,500,000
14,894,743
15,000,000
15,159,600
14,429,785
14,500,000
14,000,000
14,183,727
13,500,000
13,000,000
12,497,749
Data as of June 2008; Source – MCC Audited
Financial Statements and Budgets
Initial Budget
2008-2009
Final Budg et
2007-2008
2006-2007
2005-2006
2004-2005
2003-2004
12,000,000
2002-2003
12,500,000
18
PROPOSED FY08-09 BUDGET
KEY ASSUMPTIONS - REVENUE
¾Total Revenues for 08-09 are projected to be
$70.3 million, a decrease of 1.2% from the final
07-08 budget
19
MCC Total General Fund Revenue
$75,000,000
$70,000,000
$65,000,000
$60,000,000
$55,000,000
9
Bu
i ti
al
In
Fi
na
lB
ud
dg
ge
et
20
t2
00
08
7-
-2
00
20
08
7
00
06
-2
20
20
0
5-
20
06
05
-2
0
20
04
-2
0
03
20
20
02
-2
00
04
3
$50,000,000
20
MCC General Fund Revenue Trends
$28,000,000
$26,000,000
$24,000,000
$22,000,000
$20,000,000
$18,000,000
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$2002-2003
2003-2004
2004-2005
Tuition and Fees
2005-2006
Property Taxes
2006-2007
State Appropriations
Final Budget
2007-2008
Initial Budget
2008-2009
Grants and Other
21
GENERAL FUND REVENUE SOURCES
General Fund Revenue Proportions
110%
100%
3%
5%
6%
6%
7%
6%
6%
27%
24%
24%
23%
19%
23%
21%
90%
80%
70%
Grants and Other
State Appropriations
60%
50%
33%
34%
34%
35%
36%
34%
35%
37%
37%
35%
37%
37%
37%
38%
Property Taxes
Tuition and Fees
40%
30%
20%
09
-2
0
08
20
ge
t
ud
iti
al
B
In
Fi
na
lB
ud
ge
t2
20
00
06
08
720
07
-2
0
06
20
05
-2
0
00
5
-2
20
04
-2
0
03
20
20
0
2-
20
03
04
10%
22
PROPOSED FY08-09 BUDGET
KEY ASSUMPTIONS-- EXPENDITURES:
Overall decrease of $.8 million or 1.1% over the final 07-08
budget.
• Salaries & Wages and Fringe Benefits: Only slight
increases (.2%) as 4 employee groups are in the process of
bargaining and costs are uncertain. Contingencies have
been built into the 08-09 budget to account for these
expenditures.
•Total compensation = 74%, within Board Policy
•Non-Salary: decrease of 5.2% due to necessary spending
restraints to maintain a balanced budget
23
Initial General Fund Budget 2008-2009:
Expenditures by Activity
Utilities and
Insurance
4%
Operations/
Communications
8%
Facilities Rent
0%
Transfers
5%
Capital Outlay
0%
Materials and
Supplies
3%
Contracted
Services
6%
Salaries and
Wages
53%
Fringe Benefits
21%
24
PROPOSED FY08-09 BUDGET
BUDGET BALANCING STEPS=
COST CONTAINMENT
9 Continued holds on filling vacant positions
9Total non-salary related expenses reduced during
budgeting process by $1.0M (including transfers)
9Contingencies needed for employee group
bargaining cost uncertainty
25
PROPOSED FY08-09 BUDGET:
General Fund
SUMMARY
06-07
Actual
Revenues
$
Expenditures
Excess Revenues Over
Expenditures
Fund Balance - Beginning
Fund Balance - Ending
Fund Balance Percent
07-08
Amend #2
08-09
Initial
64,191,247 $
71,135,526 $
70,296,316
63,952,477
70,906,155
70,143,266
$
238,770 $
229,371 $
153,050
$
6,050,801
6,289,571 $
6,289,571
6,518,942 $
6,518,942
6,671,992
9.83%
9.19%
Target = 5% - 10% of Expenditure budget
9.51%
26
PROPOSED FY08-09 BUDGET
Planned Results:
¾ Balanced budget, with small surplus in general fund
¾ Continued commitment from General Fund to cover
capital needs in maintenance & replacement fund
¾ No Reduction in Force
¾ Short-term savings achieved through position
vacancies
¾ Intentional constraint on non-salary (discretionary)
spending base
¾ Strategic Goals (AQIP process) and 7-year impact
considered throughout process
27
PROPOSED “OTHER FUNDS” FY08-09
BUDGETS
Main Point is Impact on Operating Budget:
•Designated Fund—$2.4 million revenue budget
(Scholarships, Student Enrichment, Copy Machines,
Paid Parking, Designated Technology Fee)
•$423,000 funded with General Fund budget (expense)
•Auxiliary Enterprise Fund--$603,000 budget
(Catering, Vending, Bookstore, Computer Lab
Printing, Lapeer Campus Auxiliary)
•$312,000 net “profit” supplements General Fund (revenue)
28
PROPOSED “OTHER FUNDS” FY08-09
BUDGETS
Main Point is Impact on Operating Budget:
•Debt Retirement Fund—no General Fund impact
•Millage Rate stays same, at 0.69 mill; Property taxes restricted
•Capital Funds—repair, upgrade of buildings, equipment,
technology, vehicles ($100 million in net value)
•Instructional Technology Fee = $1.2 Million per year
•$1.6 million per year planned transfer from General
Fund.
•$15 million in Series 2008 Bond Proceeds will fund
projects through FY09-10
29
STRATEGIC INITIATIVES
FOR 08-09: LINKED TO
BUDGET PROCESS and to
AQIP METHODOLOGY
30
STRATEGIC INITIATIVES FOR 08-09
• Allocation for 08-09 is $200,000, including both
AQIP and department level projects
•Department/Division level planning produces
requests for annual funding
•Top Three AQIP Action Projects :
•1) Provide on-going, cross-functional training to
develop all employees' professional skills.
2) Cooperative education and experiential learning.
3) Advising for degree completion and transfer
students.
31
7-YEAR FORECAST
32
7-YEAR FORECAST
„
Key Assumptions – Revenue
„
„
„
„
„
Tuition and fee revenue increases between 2.4% and
4% each year (impact of rates and enrollment)
Property tax revenue decreases for 3 years with slight
increases thereafter
0.6410 Mill Voted Operating Millage is renewed for 10
years starting with FY08-09
State appropriations increase by 1.5% each year Other
revenues increase by 2% each year
Total revenue increases by avg. of 1.7% each year
33
7-YEAR FORECAST
„
Key Assumptions - Expenses
Salaries and wages increase by avg. of
2.5% each year
„ Fringe benefits increase by avg. of 5.5%
each year
„ Other expenses increase by avg. of 4.5%
each year
„ Total expenses increase by avg. of 3.7%
each year
„
34
7-YEAR FORECAST
„
Summary
„
„
„
„
Projected General Fund Deficit would be $31 Million
at end of FY14-15, if current trends continued
(Revenue growth of 1.7% vs. expenditure growth of
3.7%)
Based on an average projected gap of $6.3 million
per year to be filled with budget-balancing solutions
Short-term savings and flexibility continues to be
key
Long-term strategy of reducing compensation costs
continues as focus has to be on controllables
35
7-YEAR OPERATING FORECAST
(in millions), as of June 2008
Forecasts>>>>>>>>>>>>>>>>>>>>>>>>>>
Amended Proposed
Budget 07- Budget
08
08-09
Revenues
Tuition and Fees
Property Taxes
State Appropriations
All Others
Total Revenue:
Revenue Increases:>>>
Expenditures
Salaries
Fringe Benefits
All Others
Total Expend.:
Expend. Increases:>>>
Surplus/(Deficit):
Fund Balance - End:
26.2
24.5
16.3
4.1
71.1
36.4
15.0
19.5
70.9
0.2
6.5
09-10
10-11
11-12
12-13
13-14
14-15
26.4
24.4
15.2
4.3
70.3
27.0
23.6
15.4
4.4
70.4
27.7
23.0
15.6
4.5
70.8
28.8
22.8
15.9
4.5
72.0
30.0
23.2
16.1
4.6
73.9
31.2
23.7
16.3
4.7
75.9
32.4
24.2
16.6
4.8
78.0
-1.2%
0.1%
0.5%
1.7%
2.7%
2.7%
2.7%
36.8
14.8
18.5
70.1
-1.1%
0.2
6.7
37.7
15.6
19.3
72.6
3.6%
(2.2)
4.2
38.7
16.5
20.1
75.3
3.7%
(4.5)
(0.4)
39.6
17.4
21.1
78.1
3.7%
(6.1)
(6.6)
40.6
18.4
22.0
81.0
3.7%
(7.1)
(13.7)
41.6
19.4
23.0
84.0
3.7%
(8.1)
(21.8)
42.7
20.4
24.1
87.2
3.7%
(9.2)
(31.0)
Note: the forecast illustrates pro forma data if current trends were to continue. The college is
obligated to balance its budget each year and will take necessary steps to do so.
36
CAPITAL FUNDING
Capital Funding
9
™
Funding Sources :
9 $45 M Voted Bond Authority Passed June 2004
9 -$15 M Series 2004 was spent from 2004-2006
9 -$15 M Series 2006 was spent by April 2008
9 $15 M Series 2008 to be spent by April 2010
9 +$18 M Commitment of Operating Funds
9 +$ 8 M projected from Student Tech. Fees
™ =$41M Secured from now through 2011
™ $4 M pending approval from State Capital Outlay
Future needs will require ongoing deferral and
continued requests for voted bond authority and state
capital outlay assistance
38
FUTURE OUTLOOK:
Next Steps and
Key Issues for
Consideration
39
FUTURE OUTLOOK:
Key Issues
1. Containing Compensation costs – Long-term
budget challenge remains to control rising
expenditure levels
2. Property Tax values have decreased and are
expected to decline over the next several years
3. Maintaining Sufficient reserves – Supporting the
Strategic Plan and ensuring financial health
4. State’s budget – continues to be uncertain at this
point
5. 2007-2012 Strategic Planning through AQIP
requires continuous improvement methods
40
FY08-09 BUDGET
Next Board
Actions…
„
FY07-08 Audit Acceptance:
„
„
Oct/Nov’08
FY08-09 Budget
Amendment:
„
Winter’09
41
MCC Board of Trustees
Committee of the Whole Meeting
June 23, 2008
Questions or Comments?
For More Information:
Details and Provided
with Board Resolutions 1.54 and 1.56
Larry Gawthrop, Interim Chief Financial Officer
810-762-0525, Larry [email protected]
Download
Related flashcards
Economic theories

19 Cards

Economic theories

23 Cards

Create flashcards